Volume Servers, Dual Core Ruled in Third Quarter

By Clint Boulton (Send Email)
Posted Nov 23, 2005


Volume servers based on 64-bit, x86 platforms and dual-core chips carried the server market for the third quarter, with those machines totaling a quarter of spending. Low-cost, 64-bit machines with dual-core chips made quite a splash in third-quarter 2005, IDC found.

Research firm IDC also said revenue ballooned 8.1 percent from the year-ago quarter to total $12.5 billion. Server revenue leader IBM posted a share of 32.3 percent for third quarter, growing sales 10.3 percent from third-quarter 2004. 

HP again held the second revenue spot with 27.8 percent but grew revenue 12.4 percent from third quarter 2004 under the leadership of new CEO Mark Hurd. HP also sold the most shipments, at 28.8 percent.

Dell maintained the No. 2 spot in terms of worldwide server shipments with 23.9 percent share, and saw 11.8 percent revenue growth from the year-ago quarter.

Sun, which is betting on its multicore Niagara chips to buoy its lagging server sales, continued to drop, with revenue falling 7.6 percent in the quarter.

IDC analysts said the strongest growth lies in volume servers, where revenue grew 14.8 percent "and continues to represent the primary growth engine for the server market overall." These machines typically sell for under $25,000.

Customers continue to be lukewarm about the most expensive machines. The high-end enterprise server market dipped 1.2 percent, the fourth consecutive quarter of declining revenue for high-end enterprise servers.

IDC analyst Matt Eastwood attributed the pick up in smaller, 1- to 2- processor machines over bigger servers to basic cost containment. Customers are consolidating multiple servers onto small boxes with virtualization technologies.

Linux servers continue to sell strong, with year-over-year revenue growth of 34.3 percent and unit shipments up 20.5 percent. In the parallel universe, Microsoft Windows servers also sold well, as revenue grew 17.7 percent, and unit shipments grew 15.3 percent.

In fact, Windows' quarterly factory revenue of $4.6 billion was the largest single segment of the server market for the first time, increasing revenue share by 3 percent from 2004.

Chalk up this growth up to customers running a combination of Windows and virtualization software on volume servers to maximize the bang of their IT buck.

On the flip side, sales of Unix machines fell .4 percent year over year to $3.9 billion, while unit shipments declined 13.7 percent from third-quarter 2004.

In other key metrics, enterprises are quickly buying into the 64-bit computing, which allows computers to run with more throughput, storage and memory.

Sales of x86 64-bit machines grew by a factor of seven to total 69 percent of all x86 server spending. IDC analysts expect this trend to continue, thanks to vendors' successful infusion of dual-core and multicore chips in the boxes.

In fact, dual-core machines haven't even been on the market for a full year but already represent nearly a quarter of all server spending today, IDC said. Moreover, blade servers are leading the move to dual core in the x86 space.

In third-quarter 2005, dual core represented nearly 10 percent of blade factory revenue, which gained 96.8 percent from a year ago. Blade servers, including x86, EPIC, and RISC blades, accounted for $569 million in the third quarter.

IBM continued to be the top seller of blade servers, with 42 market share, followed by HP at 31.6 percent.

This article was originally published on internetnews.com.

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