Server Market Posts Record Revenues in First Half 2000

The Asia-Pacific server market has posted record revenues for the first half of 2000 with Dell recording the strongest growth among the top five vendors.

Market revenues surged 27 per cent in the first quarter totalling $5.4 billion ($US2.9 billion) and this growth increased to 33 per cent in the second quarter.

According to market analysts IDC the server market almost hit the quarter of a million unit shipment mark as a result of telecommunication expansion, Internet infrastructure and e-commerce investments.

IDC's server research analyst Rajnish Arora said sustained economic recovery across the region contributed to increased demand for server hardware, improving the overall investment sentiment.

Arora said entry level servers (less than $US100,000) jumped a massive 41 per cent as vendors dropped prices to aggressively sustain their market share.

He said high-end servers (more than $US1 million) struggled with revenues contracting four per cent compared to 1999.

"The high-end servers segment was constrained by the sudden surge in demand for proprietary platforms in early 1999 for Y2K remediation projects," Arora said.

While posting the lowest growth in revenue terms, IBM maintained its top position in the server market, which was due to a 50 per cent surge in RS/6000 sales.

Hewlett-Packard regained its number two position after losing it to Compaq in 1999 as a result of its aggressive positioning of the new L class servers.

While Compaq revenue increased 28 per cent, its Alpha server experienced almost flat growth overall.

Despite having a single platform and single operating system strategy, Sun Microsystems defied market predictions closing the gap with Compaq.

This stemmed from the success of its campaign and partnerships with application vendors in the Internet space.

Dell posted the strongest growth of 74 per cent with its focus in key markets such as Australia, Korea and Singapore.

Although Dell is only a small player with eight per cent market share, Arora said it is still spectacular growth and can be attributed to the company's direct business model.

"This allows the company to shorten delivery time, offer competitive pricing and provide flexible configurations for large customers," he said.

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