The worldwide server market received mixed reports from research firms Gartner and International Data Corporation (IDC) yesterday, indicating that growth slowed in the last quarter of 2005.
The firms also report that for the first time Linux has replaced Unix as one of the top server operating systems, while Microsoft Windows operating systems continued to show steady to strong growth.
Gartner says worldwide server shipments in 2005 increased 12.7% from 2004, while worldwide server revenue grew 4.5% in 2005. It says RISC-Itanium Unix servers fell 5.3% in shipments for the year and remained relatively flat with a 0.5% increase in revenue. The replacement at the low end of this market with Linux servers and declines at the high end of the market are the reasons for these results.
"The most dynamic market remains the x86 server segment," says Jeffrey Hewitt, research director at Gartner. "These servers continue to be the choice in increasing numbers to meet the needs of more Web users accessing more file types from more access points than ever."
IDC says factory revenue in the worldwide server market declined 0.2% year-over-year to $14.5 billion in the fourth quarter of 2005 - the first year-over-year quarterly decline in revenue since the first quarter of 2003. Worldwide server unit shipments growth slowed modestly to 10.6% in 4Q05 when compared with the year-ago period.
IDC also says that after four consecutive quarterly increases, revenue for midrange enterprise servers declined 11.5% year-on-year in the last three months of 2005 and the high-end enterprise server market showed a 1.7% decline year-over-year, the fifth consecutive quarter of declining revenue for high-end enterprise servers.
Windows, Linux on the up
According to IDC, Windows servers accounted for $4.9 billion in 4Q05, representing 33.6% of quarterly server market revenue.
"For all of 2005, Windows server revenues were $17.7 billion, which means that for the first time, the Windows server segment modestly exceeded spending for Unix servers as customers deployed more fully configured Windows servers in support of scalable enterprise workloads and server virtualisation projects," the research firm says.
IDC says Linux servers generated $1.6 billion in quarterly revenue, the fourteenth consecutive quarter of double-digit growth, with year-over-year revenue growth of 20.8%. For the full year, Linux server revenues were $5.7 billion, placing it in third place for the first time from an operating system perspective as customers continued to expand the role of Linux servers into an increasingly wider array of commercial and technical workloads.
Finally, IDC says Unix servers experienced a 5.9% decline in factory revenue year-over-year to $5 billion for the quarter with worldwide Unix revenues for the quarter representing 34.3% of overall quarterly factory revenue. In 2005, Unix server revenues were $17.5 billion, moving it from sole possession of first place from an operating system perspective for the first time in more than a decade.
EMEA does well
Gartner says that in Europe, Middle East and Africa (EMEA), server shipments surpassed 2.3 million units in 2005, a 14.4% increase from 2004. Server revenue totalled $16.6 billion in 2005, a 5.4% increase from 2004.
"2005 was another positive year for the server market. Healthy levels of demand remained in the market even though the impact of the replacement cycle and positive exchange rates were less favourable than last year," says Adrian O`Connell, Gartner principal research analyst.
Top five corporate family, worldwide server systems factory revenue, full year 2005 (revenues are in millions)
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Source: IDC Worldwide Quarterly Server Tracker, February 2006
EMEA: Server vendor shipments estimates, 2005 (units)
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Source: Gartner Dataquest (February 2006)
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