Server market down 11 per cent, Dataquest says

Server market down 11 per cent, Dataquest says

The Asian economic crisis is having an effect on revenues in the server segment of the computer industry: the $US9.9 billion in revenues earned worldwide in the second quarter of 1998 represents an 11.2 per cent decline compared to the same quarter in 1997, according to market research released this week.

Research company Dataquest, a unit of Gartner Group, reported a 33 per cent decline in Asia-Pacific server revenue and a 31.6 per cent decrease in Japan, quarter over quarter.

Falloff in second-quarter revenues hurt most server vendors, said Kimball Brown, vice president and chief analyst for Dataquest's Emerging Server Technologies Worldwide program, adding that anyone with exposure in Asia was affected.

According to Brown, IBM maintained its lead in the server market in the second quarter, while Hewlett-Packard edged out Compaq for second place. Although in the No. 1 position, IBM's market share declined slightly by just under two percentage points. Compaq, including its Digital Equipment subsidiary, gained market share, though not as much as Hewlett-Packard quarter on quarter.

Weakness in Asian markets mingled with Pentium Pro-to-Pentium II product transition made market conditions tough for entry level servers, Brown said, adding that the introduction of Intel's Xeon chip may also have been a factor.

Factors contributing to the decline in the mainframe segment of the server market included the decision by some IBM customers to wait for new systems due out late in the third quarter as the company moves its product line to the G5 processor, according to Brown. Economic problems in Japan also hurt the mainframe segment.

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