Server Market Soars

Factory revenue in the worldwide server market has increased by 6.9% year over year, a recent report says.

August 30, 2004

2 Min Read
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Factory revenue in the worldwide server market increased by 6.9% year over year to $11.5 billion in the second quarter of 2004, marking the fifth consecutive quarter of positive overall revenue growth, according to IDC's Worldwide Quarterly Server Tracker.

Volume server revenue reported a huge growth spurt of 21.0% year over year. Volume servers are the primary growth engine for the overall server market; however, growth was reported by both ends of the server continuum: High-end enterprise servers, showed 6.1% year-over-year revenue growth. That growth stemmed from demand for powerful systems for server consolidation and mission-critical data-center processing, IDC noted.

Although this was the third consecutive quarter of year-over-year growth for high-end enterprise servers, midrange enterprise servers declined 11.7% year over year. However, Linux servers posted their eighth consecutive quarter of double-digit growth with year-over-year revenue growth of 48.9% and unit shipments up 38.2%. This was only slightly slower than first-quarter revenue growth of 57.0% and first quarter unit growth of 46.6%.
How Well Did Vendors Do?

IBM remains number in the worldwide server systems market with 32.5% market share in factory revenue while growing factory revenue by 11.7% compared with the second quarter of 2003. IBM's OS/390 servers continued to show very strong growth in the second quarter of 2004, with 40.6% revenue growth and 35.2% unit growth compared with the second quarter of 2003. However, in terms of unit shipments, Hewlett-Packard was the number 1 vendor worldwide. The vendor stayed in the number 2 spot for factory revenue with 27.1% share, improving revenue by 4.6% compared with the second quarter of 2003. In addition, Sun experienced strong unit shipment growth with 33.8% year-over-year growth, which was the largest increase for a top 5 server vendor in the second quarter. The server maker also experienced sequential and year-over-year revenue growth, regaining its number 1 position in the worldwide Unix server market. IDC reported that Unix servers experienced 20.2% unit year-over-year growth and sequential revenue growth of 1.8% over the first quarter of this year. However, Unix server revenue declined slightly in the quarter, dipping 3% year over year.

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