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August 27, 2007
Distributed Workloads Drive Server Demand
According to IDC's Worldwide Quarterly Server Tracker, factory revenue
in the worldwide server market grew 6.3 percent year over year to $13.1
billion in the second quarter of 2007. This is the fifth consecutive
quarter of positive revenue growth and the highest Q2 server revenue
since the market peaked in 2000. After three years of slowing unit
shipments growth, server shipments grew 6.1 percent year over year in
2Q07 driven by an improved refresh cycle and an expansion of new
distributed computing workload deployments across the market.
Volume
systems represented the primary driver for market growth in 2Q07 with
revenue growth improving to 11 percent year over year in the second
quarter, which is the highest growth rate for this critical market
segment since 3Q05. Revenue for midrange enterprise servers increased
.2 percent year over year and the high-end enterprise server market
showed a 1.7 percent increase year over year. This is the third
consecutive quarter that all three server market segments have
experienced positive revenue growth.
"The server market not only
continues to experience solid growth, but revenue growth has
accelerated over the past seven quarters. Although x86-based systems
are once again the primary driver for overall market growth, continued
growth in other market segments demonstrates that a single standardized
infrastructure is not capable of meeting the full range of needs in
today's modern enterprise," said Matt Eastwood, group vice president of
Enterprise Platforms at IDC. "Enterprise customers of all types
continue to focus on driving business growth. This growth drives new
computing demands, which increasingly require both scale-up
consolidated systems and scale-out distributed configurations to meet
very different workload needs in today's enterprise."
Overall Server Market Standings, by Vendor
IBM
held onto its No. 1 spot in the worldwide server systems market with 31
percent market share in factory revenue for 2Q07, growing factory
revenue by 6.4 percent year over year. This growth was driven by solid
performance from its System x, System z and System p servers. HP
maintained the No. 2 spot with 28.2 percent share for the quarter,
growing revenue 8 percent compared to 2Q06. HP’s growth stemmed from
strong ProLiant server and BladeSystem performance. Sun grew server
revenue 5.6 percent year over year and maintains the No. 3 ranking with
13.1 percent factory revenue market share in the quarter. Sun continues
to experienced strong demand for its T1000 and T2000 Niagara-based
systems as well as its x86 offerings. Although it continues to hold the
No. 4 position in the market, Dell experienced the most robust growth
of any leading vendor growing factory revenue 20.2 percent year over
year as its new enterprise strategy shows business progress.
Top-level server market findings include:
- Linux servers posted the fifth consecutive quarter of accelerating revenue growth, with year-over-year revenue growth of 19 percent, for a total of $1.8 billion in the quarter. Linux servers now represent 13.6 percent of all server revenue, up from 12.1 percent a year ago.
- Microsoft Windows server revenue was $5 billion in 2Q07, showing 18.7 percent year-over-year growth and gaining 4 points of revenue market share over 2Q06 and comprising 38.2 percent of all server revenue in the quarter. Windows servers account for the single largest segment of spending, by operating system, in the worldwide server market.
- Unix servers experienced a modest 4 percent revenue decline when compared with 2Q06. The high-end enterprise segment of the Unix market was strongest of all three segments (volume, midrange enterprise and high-end enterprise), as worldwide Unix revenues totaled $4.2 billion in 2Q07, representing 31.7 percent of quarterly server spending. Unix servers account for the second-largest segment of spending, by operating system in the worldwide server market.
- IBM's
System z servers running z/OS experienced the fifth consecutive quarter
of positive revenue growth, with 4 percent year-over-year growth in
2Q07 to $1.2 billion. IBM mainframes running the z/OS operating system
Z/OS accounted for 9.5 percent of all server revenue in 2Q07, and IBM
System z was the only platform outside of Linux and Windows to
experience positive revenue growth in the quarter.
- The market for non-x86 servers, including servers based on RISC, EPIC and CISC processors, declined 2.3 percent year over year in 2Q07, from $6.4 billion in 2Q06 to $6.3 billion in 2Q07. IBM maintained its leadership position, posting 45.8 percent share, in this segment over Sun Microsystems (23.9 percent), Hewlett Packard (20.7 percent), and Fujitsu/Fujitsu Siemens (4.8 percent) respectively, based on factory revenue. IBM grew revenue 2.8 percent during the quarter on the strength of sales for System z mainframes (4.0 percent growth) and RISC-based System p machines (7.2 percent growth). HP lost about .9 points of share in this segment as revenues declined 6.2 percent, while Sun gained 0.9 points of share with a 1.3 percent increase in revenue for the quarter.
"Sun maintained its leadership position in
the Unix market posting slight growth, but gaining 1.6 percent points
of share, while IBM remained in second position by growing 6.7 percent
and gaining 3.1 percent points in year-over-year comparisons," said
Steve Josselyn, research director for Enterprise Platforms at IDC. "Sun
remains committed to expanding the Unix ecosystem as evidenced by the
recent agreement with IBM to support Solaris on System x. While we
still believe that spending for Unix-based servers will decline over
time, the competition for leadership between the top suppliers for the
largest share of this $4 billion in quarterly spending is expected to
remain heated for some time."
x86 Server Market Dynamics
x86-based
systems experienced their fastest growth rate in seven quarters, as x86
server market growth accelerated in 2Q07, growing 15.5 percent year
over year to $6.9 billion worldwide. Unit shipment growth also
continued with a healthy gain of 7.8 percent to 1.8 million servers as
x86 systems were deployed for an increasing array of enterprise
workloads in both datacenter and distributed environments. HP led the
market with 35.1 percent x86 revenue share, as Dell held second place
with 22.2 percent revenue share and IBM was in the third position with
17.5 percent revenue share.
Blade Server Market Shows Strong Shipment and Revenue Growth
For
the third consecutive quarter, the server blade market showed signs of
acceleration, with factory revenue growing 36.7 percent year over year.
Overall, bladed servers, including x86, EPIC and RISC blades, accounted
for $875 million in the second quarter, representing 6.7 percent of
quarterly server market revenue. While HP held the No. 1 spot in the
blade market with 47.2 percent market share and IBM held the No. 2
position with 32.3 percent share, HP grew 71.9 percent year over year,
gaining 9.7 points of revenue market share over 2Q06.
"Blade
servers continue to be the fastest growing segment of the worldwide
server market. Customers are increasing their blade deployments and
vendors are broadening the blades product portfolio," said Jed
Scaramella, research analyst in IDC's Enterprise Computing group. "IDC
believes blades are in the next wave of product evolution and customer
adoption. As IT organizations become more familiar with the platform,
they are able to deploy blades in IT environments that are suited to
take advantage the management capabilities, as well as the cost and
serviceability benefits."
IDC's Server Taxonomy
IDC's
Server Taxonomy maps the eleven price bands within the server market
into three price ranges: volume servers (servers priced less than
$25,000), midrange enterprise servers ($25,000 to $499,999), and
high-end enterprise servers ($500,000 or more). The revenue data
presented in this release is stated as factory revenue for a server
system. IDC presents data in factory revenue to determine market-share
position. Factory revenue represents those dollars recognized by
multi-user system and server vendors for ISS and upgrade units sold
through direct and indirect channels and includes the following
embedded server components: Frame or cabinet and all cables,
processors, memory, communications boards, operating system software,
other bundled software and initial internal and external disk shipments.
IDC's
Worldwide Quarterly Server Tracker is a quantitative tool for analyzing
the global server market on a quarterly basis. The Tracker includes
quarterly shipments (both ISS and upgrades) and revenues (both customer
and factory), segmented by vendor, family, model, region, operating
system, price band, CPU type and architecture.
About IDC
IDC
is the premier global provider of market intelligence, advisory
services and events for the information technology, telecommunications
and consumer technology markets. IDC helps IT professionals, business
executives, and the investment community make fact-based decisions on
technology purchases and business strategy. More than 900 IDC analysts
provide global, regional, and local expertise on technology and
industry opportunities and trends in over 90 countries worldwide. For
more than 43 years, IDC has provided strategic insights to help our
clients achieve their key business objectives. IDC is a subsidiary of
IDG, the world's leading technology media, research and events company.
You can learn more about IDC by visiting www.idc.com.
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Source: IDC
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