IDC: Windows still leading server market, but revenues down 29 percent

By | May 28, 2009, 12:35pm PDT

Summary: It’s not just PC client sales that have to be worrying Microsoft and its partners. Server sales are pretty abysmal, too, as new International Data Corp. server breakdown for the first quarter of 2009 make plain.

It’s not just PC client sales that have to be worrying Microsoft and its partners. Server sales are pretty abysmal, too, as new International Data Corp. numbers make plain.

The Register has IDC’s server breakdown for the first quarter of 2009. There’s seemingly no silver lining: Revenues for all server types were down 24.5 percent, compared with the year-ago quarter, to $9.9 billion. Unit shipments were down 26.5 percent compared to Q1 1008, to 1,485,490 units.

The breakdown (in terms of dollars): Windows servers held onto their lead, with $3.7 billion in sales, a 28.9 percent decline. Unix servers dropped 17.5 percent, to $3.3 billion. Linux servers dropped 24.8 percent, to $1.4 billion.

The softest segment of the server market was low-cost “volume” servers, the Reg reported, meaning machines costing under $25,000. Revenues for that class of systems dropped 30.5 percent compared to the comparable year-ago quarter. Midrange servers fared a bit better, with revenues down 13.6 percent. High-end server revenues were down 19.5 percent.

The Reg’s conclusion: “If you do the math, companies are buying fewer but more expensive non-x64 boxes, which suggests virtualisation and consolidation projects.”

In spite of the downward server spiral, as TechFlash’s Todd Bishop noted recently, Microsoft’s Server and Tools unit was, as of Microsoft’s third quarter of fiscal 2009, one of the company’s top two cash cows. The Office unit and Server and Tools generated the most revenue, with Windows client now No. 3.

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Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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RE: IDC: Windows still leading server market, but revenues down 29 percent
dfwekrwe4601-24353682600127612526006987982220 Updated - 11th Nov
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0 Votes
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I'm willing to bet....
storm14k 28th May 2009
...that while those sales figures dropped across the board the actual installation of new servers didn't drop nearly as much.
0 Votes
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MSFT vs. RHT
n0neXn0ne Updated - 28th May 2009
"...the actual installation of ( CentOS | RHT ) new servers didn't drop..."

MSFT vs RHT


^o^


0 Votes
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nt
0 Votes
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How is it measured ?
magcomment 28th May 2009
Estimated sales blah blah blah. How do they estimate ? My company buys servers from Dell, after they arrive some get Windows and some get Red Hat Linux. We don't tell Dell what they are being used for.

All of them come with a Windows image preloaded, which is erased no matter what OS we put on top. Is that counted as a Windows sale ?

If the answer to that question is "yes", then the estimate (for us) is out by about 75%, since of the ones coming in about 75% are used for linux. What if everyone does that ? What if no one does that ? What is some people do that ?
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Doesn't matter
Richard Flude 28th May 2009
Linux selling enough to be around for a while. Unix-style OS account
for the majority of server sales, and all of the real work.

I've another client jumping to replace their windows server with Linux,
sick of continued failures (blame the MSCE if you like). What once was
a challenging recommendation is now greet with "thank goodness".
People are sick of the MSCE lies and continued under performance.

Only win apps holding anyone back, and exchange/outlook for the
SME.

Those with foresight have been using Java EE infrastructure and have
freedom of OS. No prize for guessing which they choose;-)
0 Votes
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Bwa-ha-ha-ha-ha....Sour grapes
transposeIT 28th May 2009
nt
because you'll need to keep some money aside for buying yet another Windows OS.
0 Votes
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He doesn't need to keep money aside.
InAction Man Updated - 29th May 2009
When he runs out of money he only needs to ask mom for more.
and see beyond the MCSE lies, and start demanding value for money and scrap contracts with OEM's that are bound and gagged by Microsoft.

Why pay more today just to pay again tomorrow?
0 Votes
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What rant?
storm14k 28th May 2009
Windows has always and will probably always lead in SALES. Linux is not sold to begin with. They are comparing support contracts to Windows sales. Those that know what they are doing are downloading CentOS or Fedora for free and installing it everywhere. A quick glance at Netcraft or the landscape of hosting services shows you the obvious. No need to rant. Everybody knows *nix is the dominant server platform.
I agree packaged Linux comprises a small portion of the market.
The amazing thing is how close Unix server revenue is Windows. A lot of companies have moved away from Solaris and AIX.
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Hold on there
Roger Ramjet 29th May 2009
If you start out with too much capacity in underutilized servers - and you go with virtualization and consolidation, doesn't that mean that you could add VMs without buying new hardware? That would account for ALL of the drop in sales (and then some).
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it sells software.
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RE: IDC: Windows still leading server market, but revenues down 29 percent
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RE: IDC: Windows still leading server market, but revenues down 29 percent
dfwekrwe4601-24353682600127612526006987982220 Updated - 11th Nov
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