Low-end servers bring relief in soft Q4

Low-end servers bring relief in soft Q4

The server market took a dip in the fourth quarter of 2002 as overall revenue declined, but there are signs of hope that it could rebound through the rest of the year, according to research published by IDC.

The server market declined 5.2 per cent overall compared to the fourth quarter a year ago, to hit $US12.3 billion in revenue. Sales of low-end servers offered some relief for vendors, however, and a reason to expect that the server market may show signs of health again soon.

The positive low-end sales led a 15.2 per cent rise in revenue compared to the immediate prior quarter.

Server vendors have been hit hard by the slowdown in technology spending as companies shy away from large purchases. Many of the vendors have responded by pushing features found normal on their high end, pricey systems down to midrange and low-end hardware.

IDC expected the low-end market to continue its success because of this trend, the research company said.

Of the major vendors, IBM appeared to fare relatively well, adding to its market share lead and taking 36.2 per cent of total revenue.

This was a gain of more than two percentage points year-on-year, IDC said.

Dell Computer and Sun Microsystems also showed positive growth in the fourth quarter, gaining 1.5 points and 0.2 points of market share, to end the quarter at 8 per cent and 11.7 per cent, respectively.

Hewlett-Packard lost close to 4 points of share year-on-year, ending the quarter with 25.9 per cent of revenue.

IBM and Dell were the only two big vendors to increase their server revenue totals from the same quarter the year before.

IBM's revenue rose 0.9 per cent, to $US4.4 billion while Dell's rose 16.1 per cent to $US981 million, according to IDC.

HP saw its revenue slip 17.6 per cent compared to last year. Sun's dropped 3.9 per cent and Fujitsu declined 19 per cent.

The Linux server market did well in the fourth quarter with a 41 per cent increase in revenue to $US607 million as compared to the same quarter a year ago .

For all of 2002, worldwide server revenue tumbled 11.6 per cent year-over-year to $US44.3 billion, IDC said.

Unit shipments rose 5 per cent in the same period to 4.5 million systems.

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