Windows leads as server market booms

Windows leads as server market booms

SAN FRANCISCO: Microsoft Windows was the leading OS in new servers in the third quarter, as the overall worldwide server market grew a robust 8.1 per cent, according to market research company, IDC.

After a long period focused on cutting costs and buying servers just to run current applications, enterprises were once again investing strategically in systems to handle future workloads, IDC analyst, Matt Eastwood, said.

Sales of Windows systems accounted for 36.9 per cent of all server revenue in the quarter, compared with 31.7 per cent for Unix and 11.5 per cent for Linux, Eastwood said.

Enterprises increasingly are using Windows-based servers for applications such as ERP in addition to traditional uses such as email and Web hosting.

Migration from Windows NT to newer versions of Windows was also driving sales, he said.

How much of Windows' gain would be permanent was hard to say, Eastwood said. However, just two years ago, Windows servers were only 31.5 per cent of the market, according to IDC.

Gartner's figures showed Windows servers with more than 37 per cent of the market, also in first place, according to analyst, Joseph Gonzalez.

Dell's gains pushed it firmly into third place ahead of Sun Microsystems, after several quarters of virtual ties between the two contenders, Eastwood said. Dell servers brought in factory revenue of $US1.3 billion, giving it 10.5 per cent market share, whereas Sun's roughly $US1.1 billion gave it a market share of 8.7 per cent. Sun's revenue was down 7.6 per cent from a year earlier, while Dell's grew 11.8 per cent.

Eastwood pointed out the types of servers Dell specialises in - x86-based Windows and Linux systems - were on a roll.

"Sun was slow to react to momentum around the x86 servers," he said. "They're reacting now ... but it's going to take them a few quarters to get their story out."

IBM remained the top vendor in revenue terms, with a gain of 10.3 per cent to more than $US4 billion, and a 32.3 per cent slice of the market. HP stayed in second place as its revenue grew 12.4 per cent to reach nearly $US3.5 billion. Its marketshare hit 27.8 per cent.

Volume servers, which sell for less than $US25,000, showed 14.8 per cent revenue growth year-over-year and were the main growth engine for the industry, IDC said. Midrange enterprise servers selling for between $US25,000 and $US499,000 grew 3.8 per cent, while high-end enterprise servers priced over $US500,000 declined 1.2 per cent.

Processors with 64-bit capability are leaping to the forefront of the x86 server market, according to IDC.

In the third quarter, 69 per cent of all x86 servers sold had 64-bit-capable processors, compared with just 9 per cent a year earlier, Eastwood said.

AMD, which pioneered both 64-bit and dual-core processors for the x86 market, continued to gain on Intel, according to Gartner.

In terms of revenue, AMD-based servers made up 10.7 per cent of the x86 server market, compared with just 4.3 per cent a year earlier, Gonzalez said.

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