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IDC Reports on Q3 Growth

FRAMINGHAM, Mass. -- According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market grew 0.5% year over year to $13.1 billion in the third quarter of 2007 (3Q07). Although this is the sixth consecutive quarter of positive revenue growth and the highest Q3 server revenue since 2000, it was the slowest growth rate since the first quarter of 2006. Server unit shipment growth of 6.3% year over year in 3Q07 represented a slight decrease over the 7.8% year-over-year growth reported in 3Q06.

Volume systems revenue growth improved to 8.1% year over year in the third quarter, the second highest growth rate for this important segment over the past eight quarters. In the midrange, despite growth in Windows servers, Linux servers, and Unix servers, revenue for midrange enterprise servers declined 2.2% year over year, marking the second consecutive quarterly decrease in that segment. Revenue for high-end enterprise servers declined 14.5% year over year, the largest decline in year-over-year spending growth in more than 5 years.

"Although demand for x86, Blades, and Unix systems remained strong, other parts of the market cooled off in the third quarter," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Concerns about the economy, particularly in the U.S., are causing customers to re-think their infrastructure needs at the same time that new levels of compute and power densities are expanding power and cooling challenges and driving different IT infrastructure acquisition patterns in the market. IDC believes that we are in the early stages of a market-wide transition, which will require significant IT investment in a more flexible IT fabric; however, concerns among buyers about an economic slowdown could slow investment in new systems somewhat."