The number of servers sold worldwide increased by 27.1% in the first quarter of 2004 to 1.57 million units, with a clear move by users towards low-end servers and the Linux operating system, said research company Gartner.
The growth in the low-end market meant that server hardware revenues only rose by 9.3% compared with the same period last year, to $11.8bn.
Revenue of Linux-based server hardware rose 57.3% over the period, while commercial Unix server revenues fell 2.3%, Gartner said.
IBM remains the leader in terms of server hardware revenues, with an estimated 30.7% of the market. In terms of unit shipments, Hewlett-Packard led IBM, posting a 28.5% share.
Dell has now become the third-largest seller of server hardware by units sold, and is the fastest-growing of the leading suppliers, increasing unit sales by 38.4% and revenue by 24.8% over the period.
Sun Microsystems felt the impact of the move to lower-priced servers - its unit shipments rose 26.5% to 76,800 units while its revenues from those sales fell 12.5% to $1.22bn.
Thus, over the past year, the average selling price of a Sun server has fallen 31% from $22,920 to $15,860.
David Legard writes for IDG News Service