IDC Reports Sharp Growth in Worldwide Server Market

System z marks impressive growth; x86 platform shines

IDC’s Worldwide Quarterly Server Tracker report released yesterday showed growth of 15.3 percent in “factory revenue” for servers worldwide, the fourth consecutive quarter of increased year-over-year revenue -- reaching $15 billion in the last quarter of 2010. The analyst firm says it was the highest revenue for a quarter within the last three years.Shipments of servers grew 6.1 percent over last year (to 2.1 million units) for the period, and 15.3 percent (to 7.6 million units) for the full year.

High-end servers (units priced above $250,000) showed the best growth; revenue for the quarter grew 29.1 percent over the same period in 2009. “This is the highest quarterly growth rate IDC has ever reported for the high-end as product refresh earlier in 2010 stimulated market demand significantly,” the company explained in a statement. Revenue for midrange servers (units priced between $25,000 and $250,000) actually declined by 2.1 percent.

Matt Eastwood, group vice president of IDC's Enterprise Platforms Group, pointed out that "Non-x86 platforms contributed significantly to the server market recovery in the fourth quarter and it remains clear that a variety of heterogeneous server platforms remain an integral part of a comprehensive enterprise IT strategy today."

IBM was again in the top spot for worldwide server systems, commanding 37.4 percent market share in factory revenue for the quarter; its revenue increased 21.9 percent over 2009. “IBM experienced strong improvement in demand for its System z mainframe systems and continued demand for x86-based System x servers in the quarter,” IDC said, which ESJ had previously reported.

"The marked increase in System z revenue that was seen in the fourth quarter reflects the deep investment that IBM made in reinventing its long-lived datacenter platform by closely linking it to a distributed-system blade chassis running POWER and x86 systems for workloads with mainframe affinity," said Jean S. Bozman, research vice president, IDC's Enterprise Platforms Group, in IDC’s statement.

Among the impressive figures from the report: Revenue for IBM's System z servers using z/OS had its second consecutive quarter growth -- at 69.1 percent for the quarter. “This is the fastest quarterly revenue growth IDC has ever reported for IBM mainframes, as systems running the z/OS operating platform accounted for 11.3% of all server revenue in 4Q10 and IBM System z was the only platform outside of Linux and Windows to experience positive revenue growth in the quarter.” [emphasis added]

In second place was HP, with 29.9 percent market share; the company’s revenue grew 13.2. “HP was helped by continued demand for its x86-based ProLiant servers,” according to IDC.

Dell remained in third place; Sun was number four.

The x86 server market growth was the star last quarter, with 6.7 percent growth in server shipments (to 2.0 million units). That’s the highest quarterly revenue ever reported for that platform and is 59.7 percent of all server spending. All top 4 vendors enjoyed increased revenue for their x86 server lines. Worldwide, 7.4 million x86 units shipped last year.

"Within the x86 market, high-end servers showed higher growth rates for both server shipments and revenue than low-end servers," said Reuben Miller, senior analyst in IDC's Worldwide Enterprise Server group. "With the introduction of higher performing processors with multiple cores, customers are finding more benefit in purchasing multi-socket server units than single socket systems. As the demand for performance continues to increase with limited space available, systems that can hold more multi-core processors in a given space are becoming more valuable to customers."

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