Server market halts its downward spiral

The worldwide server systems market has finally stopped its downward spiral. According to IDC, 2Q03 saw server unit shipments increase by 17.5% to more than 1.2 million units, which brings to an end a nine-quarter decline.

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By  Matthew Southwell Published  August 30, 2003

The worldwide server systems market has finally stopped its downward spiral. According to IDC, 2Q03 saw server unit shipments increase by 17.5% to more than 1.2 million units, which brings to an end a nine-quarter decline in year-on-year growth.

However, despite this positive news, the analyst house reports that quarterly server factory revenues of US$10.6 billion were just 0.2% higher than they were in the year-ago quarter, making it too soon to declare that the worldwide server market has begun to rebound.

“The fact that this nine-quarter decline in worldwide server revenues has finally come to a halt could signal that IT managers are once again investing in IT infrastructure build-out on a worldwide basis," says Jean Bozman, research vice president of global enterprise server solutions at IDC.

“Although it's too soon to declare a rebound in the server market, it looks like new IT buying patterns are overtaking old ones," he adds.

IBM reclaimed the number 1 spot in the worldwide server systems market, with 30.4% market share in factory revenue and 10% year-on-year revenue growth. HP, which had gained the number one spot in 1Q03 on the strength of its year-old merger with Compaq, held the number two spot in 2Q03, with 27.7% share and flat year-on-year revenue growth.

However, HP retained its lead in factory revenue in the Linux server and Windows server market segments. Sun Microsystems and Dell remain the number three and number four server vendors worldwide, respectively, followed by Fujitsu Siemens in the number five spot.

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