Global server market grows to US$12.5bn

24 Nov 2005

The global server market grew at 8.1pc year over year to US$12.5bn, according to IDC’s Worldwide Quarterly Server Tracker. The growth was based on continuing end-user investment in robust server infrastructure.

Volume server revenue grew 14.8pc year over year and continues to represent the primary growth engine for the server market overall.

Revenue for mid-range enterprise servers grew 3.8pc year over year, marking the fourth consecutive quarterly increase in that segment. However, the high-end enterprise server market showed a 1.2pc decline year over year, making it the fourth consecutive quarter of declining revenue for high-end enterprise servers.

“Although there was continued IT investment across all three server classes, the volume and mid-range enterprise server segments are showing the strongest growth, speaking to IT purchasers’ continuing focus on cost containment, which is often achieved through strategic server consolidation and server virtualisation initiatives,” said Matt Eastwood, program vice-president of Worldwide Server Research at IDC.

“Both scale-out and scale-up models for adding computer capacity are in place at most customer sites, giving IT managers flexibility in the way they install, deploy and maintain server-hardware resources,” Eastwood added.

At two thirds the year-over-year unit shipment growth of the previous year, unit shipment growth of 11.3pc reflects a transition in the volume-server market segment as a growing number of users implement virtual servers requiring increasingly robust server resources, which effectively drives higher average selling values and lower unit growth.

Linux servers posted their 13th consecutive quarter of double-digit growth, with year-over-year revenue growth of 34.3pc and unit shipments up 20.5pc. Although, both factory revenue growth and unit growth have cooled from second-quarter levels, it is clear that customers continue to expand the role of Linux servers into a broader range of workloads in both the commercial and technical segments of the market.

Microsoft Windows servers continued to show strong growth, as revenues grew 17.7pc and unit shipments grew 15.3pc year over year. Significantly, quarterly factory revenue of US$4.6bn for Windows servers represented the largest single segment of the server market for the first time — increasing revenue share by 3pc over the third quarter of 2004 — as customers deploy more fully configured Windows servers in support of scalable workloads and consolidation projects.

Unix servers experienced a 0.4pc decline in factory revenue year over year, while unit shipments declined 13.7pc when compared with last year. Worldwide Unix revenues of more than US$3.9bn for the quarter represented 31.7pc of overall quarterly factory revenue. This contrasts with the second quarter — historically a strong quarter for Unix spending — which saw a strong seasonal surge of IT investment in mid-range enterprise Unix servers and high-end enterprise Unix servers.

In terms of the top equipment vendors, IBM remained in pole position with a 32.3pc share of the global market, followed by Hewlett-Packard with 27.8pc, Dell with 10.5pc, Sun Microsystems with 8.7pc, Fujitsu Siemens with 6.1pc and others with 14.7pc.

By John Kennedy