February 28, 2005

In some respects, servers constitute the backbone of e-business, so it's critical to keep tracking the market at a high level.

Research group IDC's most recent shows that, worldwide, the server market grew 5.1 percent and topped out at $14.4 billion for Q4 2004. In 2004 overall, server revenue grew 6.2 percent and reached $49 billion.

IBM, long the overall sector leader, maintained its share lead, grabbing 33.3 percent in 2004. HP took 26.6 percent in the same timeframe.

A breakout area in the market is Linux, with Linux server share up a whopping 35.6 percent from 2003. Coming in at $1.3 billion in Q4 2004, Linux server market was led by HP (26 percent), which in this category beat both IBM (23.5 percent) and Dell (15.8 percent).

Recent server megatrends included the rise in popularity of the volume server (priced at under $25,000), which was the only segment to undergo revenue growth in Q4 2004. As IDC points out, this indicates "both a decline in unit shipments [and] continued price compression" for servers priced at $25,000 or above.

But the increase in volume server revenue growth has to do with positive qualities as well, particularly their greater ability ability "to take on a wider range of enterprise workloads," according to Matthew Eastwood of IDC.

This is made possible by "blade computing and both scale-out and scale-up server virtualization technologies," for example.

Source: Line 56