Report: Server Growth To Be Paced By Blades, Linux - InformationWeek

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Report: Server Growth To Be Paced By Blades, Linux

IDC says the worldwide server market is expected to grow 5% this year, but with much bigger sales gains in Linux servers and blades.

The worldwide server market is expected to grow 5% this year, with some segments--Linux and blade categories, in particular--about to break out, according to a new report.

IDC expects the overall enterprise server market to grow 5% in 2004 and to achieve a compound annual growth rate over the next five years of 3.8%, as the dollar value of the market moves from $53 billion this year to $60.8 billion in 2008.

"Unix is still the biggest dollar spent--$19.4 billion," IDC's Mark Melenovsky said in an interview Wednesday, as he outlined annual revenue figures for server operating systems. "Even so, Unix suffered a little bit of a decline last year--6%." Melenovsky, an IDC analyst who specializes in servers, predicts a turnaround for Unix this year, however; he figures sales of Unix servers will increase by about 3%.

The most dramatic growth is for Linux-based servers. IDC says they are growing at a 47% rate, although from a small base, and will reach $3.23 billion this year. Linux machines are expected to capture 29% of the server market by 2008, nearly tripling their current market share.

"There continues to be very strong growth in the x86 industry standard-server market--particularly for Windows and Linux-based solutions," Melenovsky said. "Growth has been strong for everything from standalone systems in small offices to several hundred node clusters in enterprise data centers."

IDC said the blade-server market is also a key growth category, with sales expected to hit $9 billion by 2008--and that's from a near-standing start in 2000. Melenovsky suggested that the advantages of blade servers are changing; the initial benefit was largely value, but today, server advantages are marked not just by value proposition, but also by tools and secondary advantages, such as ease of deployment and ease of management. He noted one Linux-based server application that is taking off: clustering configurations to carry out high-performance computational tasks.

Steve Josselyn, another IDC analyst also specializing in the server market, reported that a "good environment" for hardware and software replacement is helping to produce new enterprise spending for IT infrastructure, as users migrate to more robust systems. The major suppliers are IBM, Hewlett-Packard, and Sun Microsystems.

IDC expects the United States to hold on to its dominant share of the worldwide market, followed by Western Europe and Asia/Pacific (excluding Japan). The market-research firm anticipates the strongest growth--about 6.5%--will come from Central and Eastern Europe, as well as from the Asia/Pacific region.

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