Server market slowing down

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Server market slowing down

Though the worldwide server market saw continued growth in 2001, the annual growth rate in unit shipments for the year was at its lowest since 1996, according to statistics released by Gartner Dataquest.

Worldwide server shipments totalled 4.4 million in 2001, an increase of 1.8% from 2000, Gartner Dataquest said.

Gartner Dataquest pointed to the general global economic slowdown along with the aftermath of the 11 September terrorist attacks in the US as reasons for the decline in growth.

In the US alone, the server market dropped by 9.5% in 2001, with shipments of 1.7 million units as compared to 1.9 million units in 2000.

While Compaq held on to its top spot as the worldwide leader with 23.3% of the worldwide server market (followed by Dell, IBM, Hewlett-Packard and Sun), Dell led in the US market with 23.4%, followed closely by Compaq with 22.6%.

Dell was singled out by Gartner Dataquest for being the only company in the top five to see growth in both the US and worldwide server markets. This, said the analyst company, was due to its direct business and build-to-order models, which encouraged low inventory levels, as well as the company's focus on one-, two- and four-way servers.

The preliminary numbers are in line with a previous Gartner Dataquest report in November, which indicated that businesses in Western Europe are opting to upgrade old servers or buy low-end systems rather than the high-end products they would have bought a year ago. Gartner Dataquest observed that intense price competition between server makers was also taking its toll on the market.

Gartner Dataquest's full report on the server market is due for release in February.

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