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Asia-Pacific server market reaches record $2.9B in first half of year

Asia-Pacific server market reaches record $2.9B in first half of year

The Asia-Pacific (excluding Japan) server market grew by 27 per cent in the first half of 2000, compared with the previous year, to reach a sales value of $US2.9 billion, according to researcher International Data Corp (IDC).

Telecommunication expansion, Internet infrastructure expansion and electronic commerce investments were primarily responsible for spearheading the server market growth, IDC said in a report issued Thursday. The region's sustained economic recovery also helped sales, IDC said.

The entry level (under $100,000) server market showed strong revenue growth of 41 per cent in the period, with demand coming from Government-led infrastructure projects, the telecommunications sector and Internet startups, according to IDC.

But the high-end (over $1 million) server market contracted 4 per cent, following a surge of sales in this market in 1999 as part of year-2000 remediation efforts, IDC said.

The server market offers good margins for vendors, and the already strong competition will get fiercer later this year when 64-bit Intel Itanium-based servers arrive on the market, according to Rajnish Arora, senior analyst for the server market at IDC Asia-Pacific.

South Korea was the largest single market for servers, with a 30 per cent share, followed by China (21.3 per cent) and Australia (13.2 per cent). The South Korean market grew 92 per cent over the previous year, driven by a booming economy, rapid expansion of the Internet market, and healthy government investments in IT, according to IDC.

IBM retained its market leadership, with strong sales of its RS/6000 systems offsetting slow growth for systems running IBM proprietary operating systems. Hewlett-Packard (HP) maintained second position ahead of Compaq Computer, due to the aggressive positioning of HP's L-class servers, IDC said.

Sun Microsystems defied gloomy market predictions for its strategy of selling only Sparc-based servers running the Solaris operating system, largely due to the success of its "dot.com" marketing campaign, IDC said.


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