Worldwide Server Market Slows in Q4 But Grows to USD 51.3 Bln in 2005
Factory revenue in the worldwide server market declined 0.2% year over year to USD 14.5 billion in the fourth quarter of 2005, according to IDC's Worldwide Quarterly Server Tracker. This was the first year-over-year quarterly decline in revenue since the first quarter of 2003, as year-over-year quarterly compares become more difficult. Worldwide server unit shipments growth slowed modestly to 10.6% in 4Q05 when compared with the year-ago period.
Volume systems grew 7.3% year over year and the segment continue to be the catalyst for growth for the server market overall, gaining favor with SMB and enterprise customers alike. After four consecutive quarterly increases, revenue for midrange enterprise servers declined 11.5% year over year and the high-end enterprise server market showed a 1.7% decline year over year, the fifth consecutive quarter of declining revenue for high-end enterprise servers.
"The volume server market continues to evolve as richer server configurations driven by both scale-out cluster implementations and scale-up server virtualization initiatives continue to drive increased customer spending," said Matthew Eastwood, program vice president of IDC's Worldwide Server Group. "However, even in the volume segment, the quarterly unit shipment growth of 11.5% was two-thirds the year-over-year unit growth rate observed in 4Q04, illustrating a transition towards more richly configured systems in the market. This evolution is driven by IT managers increased desire to consolidate and virtualize their server infrastructures as they seek to maintain balanced and manageable IT growth in the future." Top-Level Server Market Findings
The Windows server market continued to show solid growth, with factory revenues increasing by 4.7% year over year. Overall, Windows servers accounted for USD 4.9 billion in 4Q05, representing 33.6% of quarterly server market revenue. For all of 2005, Windows server revenues were USD 17.7 billion, which means that for the first time the Windows server segment modestly exceeded spending for Unix servers as customers deployed more fully configured Windows servers in support of scalable enterprise workloads and server virtualization projects.
Linux servers generated USD 1.6 billion in quarterly revenue, the fourteenth consecutive quarter of double-digit growth, with year-over-year revenue growth of 20.8%. For the full year, Linux server revenues were USD 5.7 billion, placing it in third place for the first time from an operating system perspective as customers continued to expand the role of Linux servers into an increasingly wider array of commercial and technical workloads.
Unix servers experienced a 5.9% decline in factory revenue year over year to USD 5.0 billion for the quarter with worldwide Unix revenues for the quarter representing 34.3% of overall quarterly factory revenue. For all of 2005, Unix server revenues were USD 17.5 billion, moving the platform from sole possession of first place from an operating system perspective for the first time in more than a decade.
"IDC continues to see end users utilizing a mix of operating systems in their infrastructures," said Jean S. Bozman, vice president of Worldwide Server research at IDC. "Each platform offers its own advantages in terms of workloads and customer preferences, and there is substantial overlap in terms of ISV applications that run on many of these server platforms. Although the trend is towards volume systems, we do not believe that any one platform will be in a position to force another platform out of the marketplace for many years to come."
