The worldwide server market was flat to lower in the first quarter of this year, according to Gartner and International Data Corporation (IDC).
Global server shipments and revenue are important for getting a handle on the state of the IT industry, say the research firms. While desktop shipments relate to the number of employees using technology, servers show the depth of network development in organisations.
Gartner says global server shipments during the first three months of 2006 increased 13.7% over the same quarter last year, while worldwide server revenue for the same period remained flat.
[TABLE]It says worldwide server revenue totalled $12.35 billion (R70 billion) in the first quarter of 2006, little changed from $12.34 billion in the first quarter of 2005. Worldwide server shipments totalled nearly two million units in the first quarter of 2006, up from 1.7 million units in the same period last year.
However, IDC says the market declined by 1.9% on an annual basis, to $11.9 billion during the first quarter of this year, following 10 successive quarters of year-on-year revenue growth.
It says worldwide server unit shipments growth slowed modestly to 9.5% in the first three months of this year when compared with the same period in 2005.
"Volume server revenue grew 6.3% year-over-year and, although this segment represents the primary growth engine for the overall server market, first quarter 2006 experienced the slowest growth in this segment in more than three years. Revenue for midrange enterprise servers declined 16.2% year-over-year for the second consecutive quarter and the high-end enterprise server market showed a 3.2% decline, making this the sixth consecutive quarter of declining revenue for high-end enterprise servers," IDC says.
"After three years of consistent growth, the server market began to show signs of deceleration in the first quarter," says Matt Eastwood, programme VP of worldwide server research at IDC. "Although customers continued to invest in new infrastructure in the quarter, IT spending patterns are evolving and these shifts are clearly having an impact on the server market."
"The x86 server portion of the market continues to be the strongest segment," says Jeffrey Hewitt, research director at Gartner. "The x86 servers remain as the leading server choice for meeting ongoing Web-related growth while other segments have started the year in a less positive mode."
According to Gartner, RISC-Itanium Unix servers fell 0.9% in shipments for the quarter, but dropped a more significant 5.1% in revenue.
[TABLE]"The decline at the high end and the replacement at the low end with Linux on x86 servers continue to put negative pressure on this portion of the market," Hewitt says. "The blade segment of the market displayed strong growth again, with volumes increasing 46% over the same period last year. IBM holds the leading market position in blade servers in volume and revenue terms."
IDC research shows Microsoft Windows servers continued to show strong growth as revenue grew 5.9% and unit shipments grew 12.9% year-over-year.
"Significantly, quarterly factory revenue of $4.4 billion for Windows servers represented the largest single segment of the server market - gaining 2.7 points of revenue share over the first quarter of 2005 and comprising 37.1% of all server revenue in the first three months of this year - as customers continue to deploy more fully configured Windows servers in support of scalable workloads and consolidation projects," IDC says.
Unix servers experienced a 7.1% decline in factory revenue year over year, it says, while unit shipments declined 8.7% when compared with 1Q05. Worldwide Unix revenue of more than $3.9 billion for the quarter represented 33.2% of overall quarterly factory revenue.
Linux servers posted their fifteenth consecutive quarter of double-digit growth, with year-over-year revenue growth of 17% and unit shipments up 14.4%.
"Although Linux servers now represent 12.2% of all server revenue, revenue growth for the quarter was approximately half the growth rate observed in 1Q05 as the market grows and year-over-year compares become more difficult," says the IDC report.
Share