Modest Growth In Server Sales Reported For 4Q - InformationWeek

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Modest Growth In Server Sales Reported For 4Q

Volume systems, such as x86 Windows and Linux servers, were the catalyst for growth in the server market in the fourth quarter, as well as the full year, IDC said.

Worldwide sales of servers rose modestly in the fourth quarter of 2007, driven primarily by rising revenues from volume systems, which include x86 Windows and Linux servers, a market research firm said Wednesday.

The overall market grew by 2.4% from the same period in 2006 to $15.7 billion, marking the seventh consecutive quarter of positive growth, IDC said. In terms of shipments, the market increased by 9% over a year ago.

For the full year, server revenues rose 3.6% worldwide to $54.4 billion, while shipments grew 6.7% to 8 million units. This represented the highest in annual server revenues since the market peaked in 2000, when revenues hit $61.6 billion.

Volume systems were the catalyst for growth in the server market in the fourth quarter, as well as the full year, IDC said. Revenues increased 8.2% year over year in the quarter, as the low-cost systems found favor with large corporations and small and medium-sized businesses alike.

Mid-range server revenue, on the other hand, fell in the fourth quarter for the fourth consecutive quarter, declining 0.5% year over year. The high-end enterprise server market declined 5.7% in the quarter.

Nevertheless, IDC said there was a good chance for continued growth in the overall server market this year.

"As the market continues to look for signs of an economic slowdown, spending for new IT projects could be impacted," Matthew Eastwood, VP of IDC's Enterprise Platforms Group, said in a statement. "However, IDC believes that recent gains in both system performance and manageability will continue to drive consolidation, virtualization and other infrastructure refresh projects where changing datacenter economics help CIOs build defensible business cases necessary for continued strategic IT investment."

IBM held onto the top slot in the market with 36.7% of total market revenues in the quarter. The "solid performance" of IBM's System x and System p servers drove a year-over-year revenue increase of 0.5%, IDC said.

Hewlett-Packard continued as the No. 2 vendor with 27.7% of the market, growing revenue 6.3%. Dell and Sun Microsystems ended the fourth quarter in a statistical tie for third place, with revenue market share of 10.1% and 9.3%, respectively. Dell increased revenue growth by 6.8%, while Sun experienced a year-over-year decline of 2.4%.

IDC rival Gartner this month reported that worldwide server shipments climbed 11% in the fourth quarter, while revenues rose nearly 3%.

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