Server market grows after years of stagnant sales

The server market is taking off again after three years of slowing growth, said research firm IDC.

According to IDC's quarterly report, the server market grew 6% year over year, to $13.1 billion U.S. for the second quarter of 2007. The firm attributed the growth to users refreshing servers used in their data centers and to expanded distributed-workload deployments.

Servers priced under $25,000 sustained the largest growth: 11% year over year. Meanwhile, growth of midrange enterprise servers (priced between $25,000 and $499,000) was less than 1%, and high-end enterprise servers (costing more than $500,000) showed an almost 2% increase.

IBM led the server market with a 31% revenue share, followed by Hewlett-Packard Co. with a market share of more than 28%. Sales of System x, System z and System p servers accounted for the majority of IBM's server revenue, while HP's growth could be attributed to ProLiant and BladeSystem servers, IDC said. IBM mainframes running the z/OS operating system accounted for 9.5% of all server revenue in the second quarter.

Sun's server revenue grew almost 6% year over year; the company is the No. 3 player with 13% of the market. Dell, which showed more than a 20% revenue growth in x86 servers, followed Sun.

On the operating system front, Linux servers represented almost 14% of server revenue. Microsoft Windows accounted for 38% of server revenue, and Unix system revenue tallied in at 32% of the market.

In x86-based servers, HP led the market with a share of more than 35%, followed by Dell with more than 22% and IBM with 17.5%.

The blade server market also soared, with revenue growing 37% year over year. Blade servers accounted for $875 million, or 6.5% of the server market. HP held more than 47% of the blade server market, followed by IBM with 32%.

This story, "Server market grows after years of stagnant sales" was originally published by Network World.

Copyright © 2007 IDG Communications, Inc.

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