February 24, 2006

According to IDC's Server Tracker Research, last year, the global server market was pegged at $14.5 billion in the fourth quarter. These numbers represent a 0.2 percent decline when compared to 2004.

This is the first such decrease in revenue since the first quarter of 2003.

The was only one sector of the industry that is still increasing and thats low-cost (read: budget) servers, which grew 7.3 percent year-over-year. Midrange enterprise servers declined 11.5 percent over the same period and high-end enterprise servers declined 1.7 percent.

The growing trend of servers that can be mixed, matched and plugged into banks of virtual servers means an increased ability to do more with existing investments, noted analyst Matthew Eastwood of IDC.

He referred to "IT managers' increased desire to consolidate and virtualize their server infrastructures as they seek to maintain balanced and manageable IT growth in the future," driven not just by flexibility but cost.

For all of 2005, Windows servers took pole position with $17.7 billion in revenue, edging out Unix servers (which came in at $17.5 billion). Linux servers were in a distant third place with $5.7 billion in revenue but a whopping 20.8 percent year-over-year growth, nearly four and a half times greater than the Windows growth rate.

IBM achieved $16.8 billion in server revenues in 2005, capturing 32.9 percent of market share. That is a slight decline from the company's 33.2 percent market share in 2004, but a $573 million increase in overall revenue.

HP was in second place, doing $14.1 billion worth of server business in 2005 and capturing 27.7 percent of market share. That's up from $13 billion and 26.5 percent in 2004.

Dell came in third, with $5.2 billion in revenue and 10.3 percent of market share. Sun has $4.8 billion/9.5 percent, and Fujitsu/Fujitsu Siemens achieved $2.9 billion and 5.7 percent.

A look at Q4 2005 results shows some interesting dynamics. IBM grew revenue only .8 percent year-over-year, whereas HP came in at 3.8 percent and Dell registered 7.3 percent. Both Sun and Fujitsu/Fujitsu Siemens plummeted 10.9 percent each.

Even if one projects the current rates of growth and decline forward several years, the overall picture doesn't change much.

IBM remains in first, with HP a closing second, and Dell a distant third. Sun, Fujitsu/Fujitsu Siemens and other vendors fall further off the map.

Source: Line 56