Server sales rise as users rebuild

Linux server sales outpace Windows-based servers in strong overall market

Worldwide sales of server hardware reached $11.5 billion in the first quarter of 2004, according to research firm IDC. This represented 7.3 percent growth over the same period last year, and marks the fourth consecutive quarter of overall growth in the server market.

Unit shipments of servers grew 22.4 percent over the same period, reflecting generally cheaper prices for server hardware.

The market growth reflects the general increase in IT spending, with organizations beginning to rebuild their computing infrastructure following nearly three years of slowed spending during the economic downturn, IDC said.

Linux server sales grew by 56.9 percent in dollar terms and 46.4 percent in unit shipment terms, the seventh consecutive quarter of double-growth revenue growth, according to IDC. Windows-based servers also showed strong growth with revenue up 16.4 percent and unit shipments up 26.5 percent, IDC said.

Sales of proprietary Unix-based servers fell 3 percent overall, but showed growth in Japan and the rest of the Asia-Pacific region, where users are building Unix-based computing and telecommunications infrastructure, IDC said.

A small but rapidly growing market segment is for servers running 64-bit Intel Corp.-compatible processors. Sales of x86-64 servers grew 35.1 percent over the previous quarter, with vendors showing strong interest in Advanced Micro Devices Inc.'s Opteron processor.

Sales of IBM Corp.'s mainframe server products grew rapidly in the first quarter and helped the company hold on to its overall lead in the server market. IBM holds a 29.7 percent share of the worldwide server market ahead of Hewlett-Packard Co. with 26.9 percent.

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