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Server Market Grows For Second Consecutive Quarter

The worldwide server market grew by 2 percent in the third quarter, a higher-than-expected jump that was driven primarily by demand for low- and medium-priced systems, a market research firm

The worldwide server market grew by 2 percent in the third quarter, a higher-than-expected jump that was driven primarily by demand for low- and medium-priced systems, a market research firm said Wednesday. The factory revenue increase from the beefy computer systems used to run corporate data centers and business applications was the second consecutive, year-over-year quarterly jump, which followed nine straight quarters of decline, International Data Corp. said in releasing its Quarterly Server Tracker report.

The increase, which amounted to factory revenue of $10.8 billion, was one percentage point higher than IDC expected.

Overall, unit shipments grew a surprising 19.5 percent, reflecting solid demand for small servers priced less than $25,000. Revenues from those systems grew 9.5 percent, while sales of midrange systems, $25,000 to $499,999, increased by 7 percent. Revenue from servers priced more than $500,000 declined by 14 percent.

The drop in high-end server revenues was due to tight IT budgets and a shift in the market toward lower priced servers, IDC said in a statement.

"This shows that the IT community has embraced volume server deployments as a mainstream technology to meet a wide range of data-processing requirements and to support a wide variety of computing workloads," IDC analyst Vernon Turner said. "However, two quarters of positive growth do not necessarily mean that a long-lasting economic rebound is in place."

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