In-Depth

Big Blue Rides zSeries to Server Market Crown

IBM outpaced competitors HP and Sun in worldwide server revenue growth.

• By Stephen Swoyer
• 03/09/2004

During Q4 2003, all three server market segments—volume servers ($25,000 and under), midrange enterprise servers ($25,000 to $499,999), and high-end enterprise servers ($500,000 or more)—posted gains, the first time that’s happened since 2001, IDC said.

IBM garnered 37.9 percent of worldwide server market revenues, up 17.7 percent over the year-ago quarter. Big Blue received a big boost from sales of zSeries systems, which were up by 33 percent year-over-year.

HP came in second, with 25.8 percent share, posting growth of 9.4 percent over Q4 2002. Sun was a distant third with 10.4 percent share, its revenues declining by 1.7 percent from the year-ago quarter.

For the year, IDC found that worldwide server revenue grew by 3.2 percent to $45.7 billion. Big Blue was tops for the year with 31.6 percent revenue share, followed by HP, with 27.3 percent share.

Volume servers, the industry-standard servers powered by Intel and to a lesser extent AMD processors and generally running Windows or Linux, are having a profound impact on the worldwide server marketplace, according to IDC analysts who just published their estimates for server shipments in 2003.

"Volume server capabilities are driving into several tiers of the computing infrastructure," Vernon Turner, group vice president of IDC's worldwide server group, said in a statement. "It shows that high-end server technology has cascaded to this market, and that infrastructure is being augmented by industry standards and IT is reaping the benefits."

IDC contends that even the high-end enterprise server market, which IDC defines as servers costing $500,000 or more, is growing with an infusion of industry standard systems. Several vendors offer Itanium-based servers in that market, including HP, Unisys and NEC.

Meanwhile, vanilla x86 servers continue to surge, with factory revenues growing at 15 percent to $5.5 billion and unit shipments at 23 percent to nearly 1.4 million servers in the fourth quarter of 2003; IDC estimates that for 2003 worldwide, 5.3 million units of all kinds of servers shipped.

Mark Melenovsky, IDC's program director for its server research group, said the x86 segment is growing in importance and evolving, as evidenced by Intel's 64-bit extensions for Xeon and AMD's traction with Opteron.

During the fourth quarter, Linux posted dramatic growth. Linux servers generated $960 million in the fourth quarter, 63.1 percent better than the same quarter for 2002. Linux server shipments shot up by 52.5 percent for the quarter.