Gartner: Rapid Linux growth boosts server market

The number of servers sold worldwide increased by 27.1 percent in the first quarter of 2004 to 1.57 million units, with a clear move by users towards low-end servers and the Linux operating system, research company Gartner Inc. said Tuesday.

The growth in the low-end market meant that server hardware revenues only rose by 9.3 percent compared with the same period last year, to $11.8 billion.

Revenue of Linux-based server hardware rose 57.3 percent over the period, while commercial Unix server revenues fell 2.3 percent, Gartner said.

IBM Corp. remains the leader in terms of server hardware revenues, with an estimated 30.7 percent share of the market. In terms of unit shipments, Hewlett-Packard Co. led IBM, posting a 28.5 percent share.

Dell Inc. has now become the third-largest seller of server hardware by units sold, and is the fastest-growing of the leading vendors, increasing unit sales by 38.4 percent and revenue by 24.8 percent over the period, Gartner said.

Sun Microsystems Inc. felt the impact of the move to lower-priced servers -- its unit shipments rose 26.5 percent to 76,800 units while its revenues from those sales fell 12.5 percent to $1.22 billion.

Thus, over the past year, the average selling price of a Sun server has fallen 31 percent from $22,920 to $15,860.