A nine-quarter decline in year-on-year growth finally halted in the second quarter of 2003, according to market intelligence and advisory firm IDC. IDC's Worldwide Quarterly Server Tracker showed a 0.2 percent increase in quarterly server factory revenues from the second quarter one year ago.

The worldwide server revenue of $10.6B was composed, by platform, of $4.3B for UNIXR systems, $3.1B for Windows, $0.6B for Linux, and $2.6B for other operating systems.

"The fact that this nine-quarter decline in worldwide server revenues has finally come to a halt could signal that IT managers are once again investing in IT infrastructure build-out on a worldwide basis," said Jean S. Bozman, research vice president of Global Enterprise Server Solutions at IDC. "Although it's too soon to declare a rebound in the server market, it looks like new IT buying patterns are overtaking old ones."

Server unit shipments rose in the quarter by 17.5 percent, a phenomenon explained by the decline in average sales prices in the worldwide server market. IBM captured the number one spot in the overall market with a 30.4 percent market share. HP slipped to the number two spot with a 27.3 percent share of the market. Sun took the number three position with a 13.5 percent market share.

"Rack-optimized servers and server blades used in clusters and server farms are increasingly being deployed in the datacenter as effective alternatives to larger, RISC-based solutions", said Mark Melenovsky, research director of Global Enterprise Server Solutions at IDC. "This trend is especially true for Internet infrastructure workloads, for highly parallelized technical applications and for custom applications in the high performance technical computing market, as well as in some select vertical markets, such as financial services."

The decline in sales in the worldwide UNIXR server market slowed from the previous year (2Q02), showing a 5.2 percent decline. Sun, who traditionally has performed well in the second quarter (its fiscal fourth quarter), again pushed ahead to regain the number one position with a 33 percent market share.

"The UNIX server segment is the single largest 'slice' of the entire worldwide server market, with more than 40 percent of the revenue share in 2Q03," said Lloyd Cohen, research director of Global Enterprise Server Solutions at IDC. "UNIX systems, along with the associated software and services tied to these solutions, continue to drive much of the overall enterprise IT spending."

"With these share gains customers have sent a clear signal that the innovation, choice and value Sun delivers matters to them," said Mark Tolliver, chief strategy officer and executive vice president for marketing & strategy, Sun Microsystems, Inc. "In the last quarter we continued to deliver servers with superior price/performance based on industry-leading SPARCR and Solaris (OS). We also offered more choice to our customers with systems based on Solaris (OS) for x86, Linux and x86. This strategy is clearly the one customers want as Sun increased share in the UNIX market and across all servers running all types of operating systems."

"At Sun Network, Sept 16 through Sept 18, 2003, you will see us make a series of breakthrough announcements that will further our competitive edge while dramatically reducing our customers' cost and complexity," added Tolliver. [...read more...]

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