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Server market could pick up this year

The server market took a dip in the fourth quarter of 2002 as overall revenue declined, but there are signs that it could rebound through the rest of the year, research by IDC claimed.

The server market declined 5.2% overall compared with the fourth quarter a year ago, to hit $12.3bn (£7.8bn) in revenue. Sales of low-end servers offered some relief for suppliers. The positive low-end sales led a 15.2% rise in revenue compared with the previous quarter.

Servers suppliers have been hit hard by the slowdown in technology spending as companies shy away from large purchases. Many of the suppliers have responded by pushing features normally found on their high end, pricy systems down to mid-range and low-end hardware. IDC expects the low-end market to continue its success because of this trend.

IBM appeared to fare relatively well, adding to its market share lead and taking 36.2% of total revenue. This was a gain of more than two percentage points year on year, IDC said.

Dell Computer and Sun Microsystems also showed positive growth in the fourth quarter, gaining 1.5 points and 0.2 points of market share, to end the quarter at 8% and 11.7%, respectively. Hewlett-Packard lost close to four points of share year on year, ending the quarter with 25.9% of revenue.

IBM and Dell were the only two big suppliers to increase their server revenue totals from the same quarter the year before. IBM's revenue rose 0.9%, to $4.4bn (£2.8bn), while Dell's rose 16.1%, to $981m.

HP saw its revenue slip 17.6% compared with last year, while Sun's dropped 3.9% and Fujitsu declined 19%.

The Linux server market did well in the fourth quarter with a 41% increase in revenue, to $607m (£385m) compared with the same quarter a year ago .

For all of 2002, worldwide server revenue tumbled 11.6% year on year to $44.3bn (£28.1bn). Unit shipments rose 5% in the same period, to 4.5 million systems.


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