China is AP's largest consumer of servers

China was Asia-Pacific's biggest purchaser of servers in the second quarter of 2005, contributing US$601 million of the region's total server revenue, according to latest market figures from Gartner.

The research firm revealed that server revenue in the Asia-Pacific region grew 12.9 percent to US$2.9 billion in the first half of 2005, compared to the corresponding period in 2004. In the second quarter alone, revenues grew 15.8 percent to US$1.6 billion over the same period last year.

"China, Korea and Australia continue to be the largest server markets in terms of revenue," said Annie Chung, Gartner's principal analyst of enterprise systems, in a media statement. "Together, they contributed 67 percent of total Asia-Pacific server revenue in this second quarter."

China grew 22.1 percent to US$601 million in that quarter, contributing 37.7 percent to the overall regional revenue. This increase, according to Gartner, is largely due to demand from the telecommunications, government and education sectors.

Strong growth in the country's gross domestic product (GDP) is another factor driving its server market, while rising oil prices and revaluation of the RMB currency have had minimal impact on IT spending in the quarter, Gartner noted.

South Korea and Australia trails China in server revenue, stealing 14.9 percent and 14.4 percent in market share, respectively. Chung noted that demand from manufacturers and small and midsized businesses is contributing to the healthy growth of the x86-platform segment in South Korea. The Australian market is also thriving due to strong demand in the enterprise market and government, as well as in the manufacturing, energy and education sectors.

India was the largest server consumer in the Asean region, growing its year-on-year revenues by 30 percent in the second quarter. The country's growth was boosted by healthy economic conditions and increased foreign investment.

Singapore also enjoyed a good second quarter due to strong GDP growth, particularly in electronics and pharmaceutical manufacturing. Revenue in the island-state increased 14.7 percent, bolstered by strong demand in the government, telecommunication and financial services sectors.

Indonesia and the Philippines were the only two countries to report revenue declines in their server market, dipping by 0.2 percent and 31.9 percent respectively, over the same period last year.

Delayed IT spending by government-owned banks, financial institutions and other government-owned businesses was a major factor in Indonesia's decline, according to Gartner. Large enterprises in the Philippines deferred long-term investments due to political instability in that country, the research firm noted.

Servers running on Linux continue to gain ground in the region, contributing 7.2 percent of the total server revenue in the region, compared to 5.1 percent a year ago. An increasing share of non-x86 servers was installed with the open source platform, indicating that the adoption of Linux on mid- to high-end servers is increasing, Gartner said.

IBM led the pack as the top server vendor, grabbing 38 percent of the total market share, and was followed by HP and Sun Microsystems with 29.3 and 11.3 percent share, respectively.

"The outstanding performance of the IBM pSeries was a major growth factor for the quarter," said Chung. "Hewlett-Packard continues to be the leader in the x86 market, with particularly strong demand from China and Australia. Sun's Asia-Pacific server revenue was reduced by its performance in South Korea, but the company performed well in China and Australia."