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Mon 3 Mar 2003 04:00 AM

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Server market experiences strongest growth for three years

The global server market has experienced its strongest sequential growth for the past three years. According to IDC, the overall server market grew 15.2% from Q3 2002.

The global server market has experienced its strongest sequential growth for the past three years, despite factory revenue declining 5.2% in Q4 2002 to $12.3 billion. According to IDC, the overall server market grew 15.2% from Q3 2002, fueled by strong growth in the entry server market. In fact, the US$100,000 and less server market grew nearly 18% sequentially and nearly 14% year-over-year. “As customers demand richer technology configurations at lower price points, the entry market will continue to lead market growth as vendors focus on entry products to meet those demands,” comments Jean Bozman, vice president of Global Enterprise Server Solutions at IDC.Also during the fourth quarter, IBM extended its lead in the overall server market with a 36.2% share, gaining more than two points of share from a year ago. Dell and Sun Microsystems also posted slight year-over-year market share gains, with 1.5 points and 0.2 points respectively. For all of 2002, worldwide server factory revenues declined 11.6% year-over-year to $44.3 billion, while unit shipments increased 5% to 4.481 million. IBM remains number one in the market with 29.4% share. Big Blue is followed by HP with 23.8% share.The analyst house also reports that competition continues to be fierce in the highly consolidated Unix server market. HP and IBM were tied for the top spot in Q4 2002, each with 30% revenue market share. Sun was close behind with a 28% share. “As we indicated last quarter, the number one position in the Unix market is very unpredictable,” says Steve Josselyn, research director at IDC’s enterprise server fundamentals program. “This quarter there was no clear leader as the top three vendors fought head-to-head, resulting in ties in multiple segments of the Unix market,” he adds.The Linux server market was the brightest spot during the fourth quarter, posting a 41% increase to US$607 million from a year ago quarter. Mark Melenovsky, research director, IDC’s internet infrastructure program attribute this growth to the more Linux friendly product strategies of the leading vendors.“As vendors continue to offer more compelling business and product strategies to support the Linux market, the competition has definitely increased,” he says. “While HP continues to lead the Linux market, the number two and three spots are one share point apart as IBM, with a 20.5% share, edged out Dell by one point for the number two spot.”

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