Linux server sales top $1 billion in Q3

IDG News Service - Quarterly sales of servers running the Linux operating system have topped $1 billion for the first time, analyst company IDC reported today. With year-over-year revenue from Linux server sales up 42.6%, Linux accounted for more than 9% of the $11.5 billion in servers sold worldwide during the third quarter, which ended Sept. 30.
The server market as a whole grew by 5.5% over year-earlier figures, an indication that IT spending is rising from the conservative levels that IDC has tracked over the past few years, said Vernon Turner, group vice president and general manager of enterprise computing at IDC. "We see server spending continuing to be very strong, but more importantly, it's stronger than the rate of inflation. CEOs are finally saying, 'Let's get beyond normal replacement cycles.'"
Strong sales of both Linux and Microsoft Corp.'s Windows operating system fueled an 18.2% growth rate for "volume systems," which tend to be powered by Intel Corp. and Advanced Micro Devices Inc.'s x86 processors, IDC said. Windows server revenue grew by 13.3% year over year.
When measured by revenue, IBM remained the No. 1 server vendor with $3.66 billion in revenue, or 31.7% of the server market. Hewlett-Packard Co. was second with $3.09 billion in revenue.
Dell Inc. was the fastest-growing server vendor, with revenue jumping 14.1% from its year-earlier figures. The company finished the quarter with $1.17 billion in server sales, only slightly less than No. 3 server vendor, Sun Microsystems Inc., whose revenue for the quarter was $1.18 billion, up 0.1% from year-earlier figures.
Sales of midrange servers priced between $25,000 and $500,000 -- traditionally a strong area for Sun's Unix systems -- were down 10.2% for the quarter, reflecting a shift toward volume systems, according to Turner. "The ongoing concern is what happens in the midrange Unix market in the long run," he said.
Sales of blade servers hit $287 million during the quarter and now account for 2.5% of the market, IDC said. Shipments of blade servers were up 44% from last year, and IBM was the top blade vendor with 44.2% of the market.
When measured by number of units shipped, HP was the top vendor, with 471,000 units shipped during the quarter. Dell and IBM were in second and third place, respectively, with 347,000 and 259,000 units shipped. With 81,000 servers shipped, Sun actually saw the number of units it shipped decline by 0.9% from the year-earlier quarter.