IDC: replacement cycles spur server growth

IDC: replacement cycles spur server growth

Server sales are expected to get a much-needed boost in the second half of this year, says research analyst IDC.

It is good news for the channel, which has seen a slowdown in server sales over the past 18 months. Last year's downturn forced businesses to rethink their server requirements and this continued into the first half of 2002, with revenue down 3 per cent year on year, according to IDC figures.

However the analyst predicts growth of 2 per cent year on year for the next two quarters. High-end Unix servers and mid-range systems will most likely benefit as business confidence increases, said IDC senior analyst for servers and workstations, Tom Minarik.

"Replacement cycles have come to fruition and there is a lot of interest in high-performance computing systems," he said.

Spending in the telecom and government sector is expected to grow and the market should return to healthy growth early next year, he said.

The second half of 2002 will also mark the entry of Intel's Itanium 2 processor into the market. However Minarik believes economic conditions will need to improve markedly before the processor will have an impact on the server landscape.

"We are seeing the likes of HP and IBM ramping their Itanium 2 server strategies far more than for the original Itanium chip," he said. "That will raise awareness in the market, but given the current economic situation not many companies are leaning towards Itanium 2 adoption as yet."

White-box assemblers, which have been clawing back market share in the first half of the year, are also unlikely to reap the spoils of the growing market.

"It goes in stages," Minarik said. "The white-box market had relatively strong growth in the first and second quarters. But the growth is more likely to be in the tier-servicing data centres rather than shipping Intel systems."

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