Server numbers increase as system values decrease

The server market has been forced to continue the trend of shipping higher volumes of product to earn the same amount of revenue, according to research released by IDC recently.

Although the Australian server market showed surprisingly strong growth in 1998, a 12 per cent decline in the average value of systems has amplified the need for vendors, and subsequently the channel, to move more stock, says IDC.

IDC's general manager of research for Australia and New Zealand, Graham Penn said the 35 per cent growth in unit shipments recorded by vendors has been kicked along by a number of factors.

"Growth was helped by the strength of the Australian economy, as well as the increased implementation of applications like ERP, electronic business, Web-based usage and applications, server and data consolidation, as well as investments in collaborative computing and decision support," said Penn.

Penn suggested Y2K will also remain a positive factor throughout 1999 with the key vendors tightening their stronghold on the market.

"IBM, Compaq, Hewlett-Packard and Sun Microsystems increased their combined share of the server market from 70 per cent to almost 79 per cent," said Penn.

As a result, the remaining vendors are finding it increasingly difficult to match it with the top four on price and product cycles, Penn said.

IBM topped the bill with 29.6 per cent of the market followed by Compaq on 19.9 per cent. HP and Sun, weighing in at 14.8 per cent and 14.6 per cent of the Australian server market respectively, hotly contested third and fourth positions.