Servers Log Ninth Consecutive Growth Quarter

The worldwide server market continued its growth across virtually all platforms in the second quarter, fueled by 5.6 percent year over year growth, an IDC report said. The report marks the ninth consecutive quarter of revenue growth for servers, the high tech market research firm said.

Security features of Unix servers figured high in a 19.2 percent factory revenue growth. “Unix servers continue to support mission-critical workloads,” said Jean Bozman, vice president of IDC’s Enterprise Server Group, in a statement.

“IT people are reinvesting in their scalable Unix servers,” said Bozman in an interview. “If you’ve had Unix in the past, it helps. You have the (Unix) skill sets. Unix has been strong in servers right along.”

In spite of the traditional strength of Unix servers, Bozman said IDC is predicting that Microsoft Windows servers will gradually edge out Unix servers in the 2009 timeframe when Unix servers are forecast to account for around $19 billion in revenues and Windows about $22 to $23 billion.

High-end Unix servers have been demonstrating their resilience in corporate data centers as IT managers consolidate workloads and seek to secure their mission critical applications, the market research firm said in its report released Friday.The blade server market, still starting from a low installed base, jumped 67.1 percent year over year in shipments and 87.9 percent in factory revenue accounting for $440 million. IBM held the number one position in the category with 40.9 percent market share to Hewlett-Packard’s second place with 38.6 percent.

Linux servers continued their explosive growth, albeit from a relatively small base, jumping 45.1 percent in revenue and 32.1 percent in unit shipments.

Microsoft Windows servers continued strong growth, too, with revenues increasing 14.3 percent and shipments 10.9 percent. Noting interest in virtualization server initiatives, IDC said Windows servers represented 33.5 percent of overall quarterly revenue.

“Windows server growth outpaced the overall server market growth this quarter, increasing from 30.9 percent of quarterly server revenue in 2Q04 to 33.5 percent in 2Q05,” said Bozman.

Bozman noted that the three leading suppliers of servers – IBM, HP and Sun – account for about 90 percent of the server market.IBM maintained the top spot in worldwide server systems with a 31.9 percent market share in factory revenue as it grew its revenue in the category by 4.1 percent. HP held onto the second place position with 28.5 percent market share. In a sign that HP could be gaining momentum, it grew revenue 11.5 percent in the category as it continued to lead in unit shipments increasing its pacesetting margin by 6.4 percent to achieve a 29.6 percent share of market.

Dell Computer and Sun Microsystems were locked in a battle for third place in factory revenue with 11.3 percent and 10.5 percent, respectively. Dell appears to have the momentum edge as it recorded 22.3 percent revenue growth while Sun’s revenues slipped 5.3 percent.

While IDC observed that dual-core processor shipments are beginning to show up in its quarterly surveys, the high tech market research firm said aging x86 servers are experiencing strong growth that is actually accelerating. Factory revenue growth in the category increased to $5.7 billion – up 15.1 percent.

The reported also stated: “Overall, the volume ramp of x86-64 servers was extremely strong with 30.4 percent sequential quarterly revenue growth, as the transformation from a 32-bit-only x86 servers market to a 64-bit enabled market is well underway. However, IDC notes that 32-bit applications will continue to run on these x86-64 platforms for many years to come.”