Report: Worldwide Server Market Earnings Finally on Upswing

Server market earnings grow on the back of strong sales in the bladed market sector.

Worldwide server market revenues have increased for the first time in seven quarters, according to the Worldwide Quarterly Server Tracker, presented by the International Data Corporation (IDC). The overall market saw an increase of 4.7 percent over 2009's Q1, generating  $10.4 billion for the industry in this year's first quarter.

There was also a 23.3 percent increase of physical server units shipped over this time last year.

"This is the third consecutive quarter that IDC reported improving market conditions for servers worldwide," said Matt Easwood, group vice president of enterprises platforms at IDC, in a released statement. "The market recovery has been led by sharply higher demand for x86 infrastructures."

The top three x86 vendors (Hewlett-Packard, Dell and IBM) benefited the most from the market's overall increase of 33.6 percent, with HP leading the pack with a 39.2 percent revenue share.

Jed Scaramella, IDC's senior analyst for enterprise servers also agreed with Eastwood's analysis of higher interest in x86 servers. "In the first quarter of 2009, we observer a lot of business in the mid-market as well as refresh activity of a more transactional nature; these factors have driven x86 rack-based revenue to just below 1Q08 value."

The entire bladed server market saw a revenue increase of 37.2 percent over this time last year and a shipment increase of 20.8 percent. This has translated to $1.4 billion in revenues, with the x86 servers accounting for more than 90 percent of the bladed servers sales.

Eastwood said he's confident the increased interest in these servers will spread to other sections of the market:

"IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010 as the technology refresh extends from volume- to value-oriented systems with somewhat longer planning horizons," said Eastwood. "It's also important to note we are in the middle of one of the sharpest periods of market inflection in a decade and we expect significant shifts in technology usage and parted shares to occur as the recovery continues."

The Worldwide Quarter Server Tracker analyzes both shipments and revenues for the global server market on a quarterly basis. The findings are then broken up by model, region, family, vendor, operating system price band, architecture and CPU type.

Additional quarter statistics and summaries can be found here.

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