Server demand continues to grow

Demand for servers grew worldwide for the third consecutive quarter as businesses continue to increase spending in IT equipment after years of financial restraint, according to sales figures released last Friday by IDC.

Globally, factory sales of servers increased 11.4 percent in the fourth quarter of 2003 to US$13.7 billion from $12.3 billion in the same period the year before, according to IDC.

For the first time since the economic downturn in 2001, sales of servers grew in all major categories, ranging from volume servers (priced less than $25,000) to mid-range enterprise servers ($25,000 to $499,999) and high-end servers ($500,000 and more).

Sales of servers with the open source Linux operating system rose 63.1 percent to $960 million in the fourth quarter compared to the year-earlier period; unit shipments grew 52.5 percent year-on-year.

The market for servers equipped with Microsoft Corp.'s Windows operating system saw fourth-quarter sales increase 16.1 percent year-on-year to $3.9 billion, representing 31.7 percent of total server revenue in the quarter.

Unix-based server revenue was $5.1 billion in the fourth quarter, up 0.8 percent over the same quarter a year earlier, showing the first year-on-year growth in 11 quarters, according to IDC.

Total server revenue in 2003 was $45.7 billion, up 3.2 percent from $44.3 billion the year before, IDC said.

IBM Corp. maintained its position in the server market with a 37.9 percent share of factory revenue in the fourth quarter. Big Blue saw its fourth-quarter revenue climb 17.7 percent to $5.2 billion.

In second position was Hewlett-Packard Co. with a 25.8 percent share of market revenue, followed by Sun Microsystems Inc. with 10.4 percent (down 1.7 percent from a year ago).

With a market share of 8.6 percent, Dell Inc. claimed the number four spot for factory revenue. The company had fourth-quarter revenue of $1.2 billion, representing a year-on-year increase of 19 percent.

Europe's Fujitsu Siemens Computers (Holding) BV held the fifth position with a market share of 5.4 percent. Its revenue in the fourth quarter grew 31.3 percent to $734 million.

IDC is a division of International Data Group Inc., parent company of IDG News Service.

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