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IDC: 2Q Sales Growth Up for Volume Servers

The good news for hardware vendors is that growth in revenues for so-called "volume servers" -- servers that cost $25,000 or less -- continued to grow in the second quarter. The bad news is that growth rate is moderating, according to market researcher IDC's latest quarterly tracking report.

Volume server revenue in the second quarter grew 6.2 percent year over year and continues to be the only growth segment for the server market overall, according to IDC. It was the third consecutive quarter of single-digit growth for the volume server market.

Helping to drive that continued growth are corporate IT initiatives to consolidate servers, partly via virtualization. That trend cuts both ways, however, as the advent of multi-core CPUs drives growth in single-socket and 32 + socket systems, rather ironically reducing the overall unit shipment growth, according to the report.

Still, the report is good news for both Windows and Linux server vendors.

"Windows servers showed positive growth as revenues grew 3.1 percent and unit shipments grew 11.0 percent year over year...quarterly revenue of $4.2 billion for Windows servers represented 34.2 percent of overall quarterly factory revenue, as customers deploy more fully configured Windows servers as part of server consolidation and virtualization initiatives," the report states.

Linux server revenues also continue to grow.

"After fifteen consecutive quarters of double-digit, year-over-year revenue growth, spending on Linux server moderated significantly, growing 6.1 percent to $1.5 billion when compared with 2Q05." Linux servers now represent 12 percent of all server revenue, up slightly from the same quarter last year.

Meanwhile, Unix servers continued their slow slippage, with a 1.6 percent decline in revenues year over year and a decline in unit shipments of 1.8 percent compared to the second quarter of 2005. Still, worldwide Unix revenues were $4.3 billion for the quarter, representing 35 percent of all quarterly server spending and reflecting continued IT investment. Again, a lot of that revenue came from the volume segment of the market.

Overall, IBM maintained the top spot in terms of server revenues with 31 percent market share. HP holds the No. 2 slot with a 28.7 percent share, while Sun pulls up in third place with 12.9 percent, a slight bump from 11.2 percent during the second quarter last year.

Dell brings up fourth place with 10.3 percent, followed by Fujitsu/Fujitsu-Siemens in fifth place with 4.5 percent. Worldwide second quarter revenues for all server segments tally up to nearly $12.3 billion, up from just over $12.2 billion last year.

About the Author

Stuart J. Johnston has covered technology, especially Microsoft, since February 1988 for InfoWorld, Computerworld, Information Week, and PC World, as well as for Enterprise Developer, XML & Web Services, and .NET magazines.

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