Server Market Posts Growth

Revenue for manufacturers of the computers used to run business applications increased by 11.4 percent to $13.7 billion in the fourth quarter, compared with the same period a year ago, IDC said Friday. Unit shipments for the quarter jumped 22 percent.

It was the third consecutive quarter of positive revenue growth and the first time since the economic downturn began in 2001 that sales were up in all major categories of servers, IDC said. A favorable currency exchange rate was a leading factor in the strong quarterly results. With that factor, however, the market still increased by 3 percent.

The major categories of servers include volume servers priced at less than $25,000, midrange enterprise servers, $25,000 to $499,999; and high-end enterprise servers, $500,000 or more.

Volume servers led the market in revenue and unit growth, showing how many companies are choosing to run clusters of the low-cost option to handle some of the most demanding applications.

"Volume server capabilities are driving into several tiers of the computing infrastructure," IDC's Vernon Turner said in a statement. "It shows that high-end server technology has cascaded to this market, and that infrastructure is being augmented by industry standards and IT is reaping the benefits."

For the full year, server revenue increased 3.2 percent to $45.7 billion, while unit shipments rose 18.3 percent to 5.3 million.

Servers running Linux, generated $960 million in quarterly revenue. Revenue from servers running the open-source operating system increased 63.1 percent year-over-year, while unit shipments jumped 52.5 percent.

But Windows servers also showed strong growth. Revenue from the servers running Microsoft's operating system rose 16.1% year-over-year and unit shipments were up 23.3 percent. Windows servers accounted for $3.9 billion in the fourth quarter, representing 31.7 percent of the server market revenue.

X86 servers, which run on processors built by Intel and Advanced Micro Devices Inc., generated the most revenue worldwide in the fourth quarter at $5.5 billion, 15 percent more than a year ago. Unit shipments increased 23 percent to 1.4 million.

AMD's traction in the first year shipping its Opteron processor, which supports 32-bit and 64-bit applications, as well as Intel's announcement of 64-bit extensions to its x86 architecture, show that the market is continuing to evolve, IDC said. As a result, the firm expected this year to be a "tipping point" for x86 server adoption.

Unix servers overall generated $5.1 billion in quarterly revenue, growing 0.8 percent. It was the first year-over-year growth in 11 quarters. Unit shipments increased by 12.1 percent, compared with the same period a year ago, and were sharply higher than the 4.7 percent growth recorded in the third quarter.

IBM led the Unix server market with a 32.9 percent share in terms of revenue, followed by Hewlett-Packard Co., 30.5 percent; and Sun Microsystems, 27.6 percent. Sun posted an 18.2 percent increase in unit shipments in the quarter, the strongest year-over-year showing among the top 5 vendors.

The top three vendors kept their positions in the overall server market in the quarter. IBM had 37.9 percent of market share in terms of revenue, increasing revenue by 17.7 percent from the year-ago quarter to $5.2 billion. HP was next at 25.8 percent, 9.4 percent more than a year ago, to $3.5 billion. Sun was third with 10.4% but posted a revenue decline of 1.7 percent to $1.4 billion.

No. 4 Dell posted a 19% increase in revenue for the quarter to $1.2 billion, an 8.6 percent market share; followed by Fujitsu/Fujitsu-Siemens, which posted the strongest revenue growth among the top five vendors at 31.3 percent. Fujitsu took in $734 million for a 5.4 percent share.

For the year, the standings remained the same. IBM, Dell, and Fujitsu increased market share to 31.6 percent, 9.1 percent, and 6.2 percent, respectively. HP and Sun dropped to 27.3 percent and 11.8 percent, respectively. Sun was the only top five vendor to post a revenue decline for the year, dropping 11.4 percent to $5.4 billion.

This story courtesy of TechWeb.