Global server sales declined in the fourth calendar quarter, but revenues for 2005 were at their highest point for five years, says IDC.
The worldwide server market grew to USUS$51.3 Billion in 2005. Factory revenue declined marginally by 0.2 per cent over the prior year’s fourth quarter to US$14.5 billion, but this was the first sequential decline since the first quarter of 2003.
Unit shipment growth slowed modestly to 10.6 per cent in 4Q05 when compared with the year-ago period.
Volume server systems continue to grow strongly adding 7.3 per cent year on year with both
“The volume server market continues to evolve as richer server configurations driven by both scale-out cluster implementations and scale-up server virtualization initiatives continue to drive increased customer spending,” said Matthew Eastwood, program vice president of IDC’s Worldwide Server Group. “However, even in the volume segment, the quarterly unit shipment growth of 11.5 per cent was two-thirds the year-over-year unit growth rate observed in 4Q04, illustrating a transition towards more richly configured systems in the market.
“This evolution is driven by IT managers increased desire to consolidate and virtualise their server infrastructures as they seek to maintain balanced and manageable IT growth in the future.”
Factory Revenue By OS
Just better than a third of the market looks pretty healthy when you consider than Unix servers declined by 5.9 per cent in factory revenues in the final quarter. But the real star performer is the Linux segment which continued its fourteenth consecutive quarter of double-digit growth, with year-over-year revenue growth of 20.8 per cent.
Linux servers generated US$1.6 billion in quarterly revenue (US$5.7 billion for 2005) so have a long way to catch up, but looking like a promising bet.
This result placed Linux in the third spot for the first time ever, behind Windows and Unix in the first and second spot.
Unix server sales represented US$5.0 billion for Q405 at the factory level representing 34.3 per cent of the market by revenue. Totals for the year were US$17.5 billion shunting it out of first place for the first time in more than ten years.
“IDC continues to see end users utilizing a mix of operating systems in their infrastructures,” said Jean S. Bozman, vice president of Worldwide Server research at IDC. “Each platform offers its own advantages in terms of workloads and customer preferences, and there is substantial overlap in terms of ISV applications that run on many of these server platforms. Although the trend is towards volume systems, we do not believe that any one platform will be in a position to force another platform out of the marketplace for many years to come.”
Vendor Shares By Factory Revenue
From the vendor perspective, IBM retained the number 1 spot in system sales with a 38.4 per cent market share in factory revenue. This was only up slightly (0.8 per cent over the year ago quarter). But HP, despite growing faster at 3.8 per cent over 4Q04 it still trailed IBM significantly coming a distant second with 26.8 per cent share. HP picked up 1 point of market share overall, says IDC.
No prizes for guessing Dell is in second place, again a distant third with 9.6 per cent factory revenue market share. Another big gainer though, Dell leaped 7.3 per cent over the prior equivalent quarter leaving Sun in its dust with a major decline.
Exemplifying Sun’s problems the company’s factory revenues slumped 10.9 per cent compared to the last quarter of 2004. In fourth place though, with an 8.2 per cent market share, Sun is only slightly better off than Fujitsu/Siemens.
Starting to look like an ‘also ran’ Fujitsu/Fujitsu-Siemens in fifth with a 4.3 per cent market share suffered a 10.9 per cent factory revenue decline year over year.
Vendor Share By Unit Shipments
In terms of unit shipments, HP maintained the number 1 position worldwide with 30.2 per cent server shipment share, growing shipments 8.8 per cent year over year. Dell maintained the number 2 spot in terms of worldwide server shipments with 23.3 per cent share, up from 21.3 per cent.
x86 Industry Standard Server Market Dynamics
The x86 server market continued to experience strong growth, with revenue of US$6.8 billion worldwide for the fourth quarter of 2005. Factory revenue for x86 servers grew 6.7 per cent, while unit shipments grew 13.7 per cent to 1.8 million servers. HP led the market with 33.4 per cent revenue share due to strong revenue growth of 10.1 per cent year over year. The fierce competition between Dell and IBM for the second position in the x86 market ended in a statistical tie, with IBM and Dell each holding approximately 20 per cent revenue share for the fourth quarter.
Rackable Systems solidified its fourth place position in the
“The number of AMD and Intel-powered dual core systems each grew by more than double on a quarter-over-quarter basis,” said Jed Scaramella, research analyst, Worldwide Server research. “Given customers’ intense focus on performance as well as power, heat, and cooling issues in their datacenters, the move to incorporating dual core processors is a natural move as users look to lower costs and increase computing capacity.”
Blades Show Strong Growth
The server blade market showed continued growth in the quarter, with shipments increasing by 49.3 per cent year over year and factory revenue gaining 56.9 per cent year over year. Overall, blade servers, including x86, EPIC and RISC blades, accounted for US$667 million in the fourth quarter, representing 4.6 per cent of quarterly server market revenue. IBM maintained the number 1 spot in terms of server blade revenues, with 42.7 per cent market share, while HP maintained the number 2 position with 35.1 per cent share. Dell holds the number 3 position with 11.2 per cent share of factory blade revenues.
“Market momentum in the blade market continued in the quarter with blade volumes up 50 per cent year over year,” said Kelly Quinn, senior research analyst, Worldwide Server research. “Blade shipments increased more than 60 per cent year over year in 2005 as IT managers began to adopt blades as a standard building block in their virtual IT infrastructures.”
Worldwide Server Systems Factory Revenue, Q405 (Revenues in US Millions)
IDC Worldwide Quarterly Server Tracker, February 2006
Full Year 2005 Worldwide Server Systems Factory Revenue, (Revenues in US Millions)
IDC Worldwide Quarterly Server Tracker, February 2006