Server sales see sustained yet modest growth

Latest analyst figures show that server sales are maintaining steady growth while the top five vendors increase their market domination
Written by Colin Barker, Contributor

Worldwide server sales are continuing to show solid growth, according to the latest figures from analyst group IDC. And the market is further consolidating around the five main suppliers: IBM, HP, Dell, Sun and Fujitsu Siemens.

But there are disparities between the growth in revenue and the growth in volume. In the fourth calendar quarter of 2006 — the last quarter for which figures are available — server volumes were flat compared with the same quarter a year before. But the market grew in revenue during the quarter by 5.2 percent to $15.2bn.  According to IDC, this marked the third consecutive quarter of positive growth.

For the full year 2006, worldwide server revenue grew 2 percent to $52.3bn and volume grew 5.9 percent to 7.5 million units. This marked the highest annual server revenue since the market peaked in 2000.

IBM remains in number-one position in the server market, the key battleground for the main IT vendors, with market share at 37 percent, compared to 38 percent in the same quarter in the previous year. Its server revenue grew modestly by 3.8 percent over the period.

HP showed better growth in revenue at 5.1 percent but its market share remained flat at just under 27 percent.

Sun saw exceptionally strong revenue growth of 24.4 percent, which saw it pass Dell and go into third place. Its market share by revenue is now 9.7 percent, compared with 8.2 percent in the fourth quarter of 2005. The good news for Sun mirrored similar findings from analysts Gartner that were released last week.

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