Serving up a treat

Gulf server shipments are forecast to rise 16.3% year-on-year from now until 2008, according to IDC analysts. IDC expects market value to grow at 7.8% during the same period, reflecting the continuing fall in hardware prices.

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By  Alex Malouf Published  December 29, 2004

Gulf server shipments are forecast to rise 16.3% year-on-year from now until 2008, according to IDC analysts. IDC expects market value to grow at 7.8% during the same period, reflecting the continuing fall in hardware prices. “Although the key IT markets of Saudi Arabia and the UAE are increasingly saturated, they will stay dynamic by adopting new technologies, undertaking upgrades, and through SMB purchasing of the hardware necessary for staying competitive in the increasingly technology-dependant economy,” said Roshana Rehan, Analyst, IDC CEMA's Systems Group. The UAE represents the largest server market among the Gulf States in terms of volume due to its re-export role, but Saudi Arabia represents the largest in terms of value, according to IDC. The analyst house believes that this trend will continue for the foreseeable future, with these two countries together expected to account for just under 73% of unit volume and just over 73% of shipment value in 2008. IDC’s own 2004 figures for Saudi Arabia and the UAE paint a confusing picture, with an unsteady growth curve. While demand for x86 servers surged year-on-year in the second quarter of 2004, rising by 75.1% in Saudi to reach 3,064 and in the UAE by 18.3% to 3,295, the third quarter saw substantial year-on-year declines. Shipments to Saudi dropped by 24.3% year-on-year to 1,663, and the trend was repeated in the UAE where numbers fell by 16.8% to hit 3,104. According to IDC’s own analysis of its figures, volume servers will account for more than 97% of total shipments but only 51.5% of value for 2004, reflecting trends seen in the wider EMEA territory. While midrange servers are only expected to constitute 2.9% of unit shipments this year, they should represent more than 38% of market value. High-end servers will account for the rest. IDC was unable to provide statistics for the server growth. On a global level, server sales climbed 6% year-on-year to hit US$11.8bn in the third quarter of 2004, with EMEA contributing US$3.5bn — some 30% of the worldwide total. The latest market figures, compiled by analyst house Gartner, showed that IBM maintained top spot in terms of global revenues with 32% of the market. In revenue terms, Dell’s 17% year-on-year growth saw it leapfrog Sun Microsystems and pick up the number two spot globally. Worldwide server shipments topped 1.6 million units in the quarter — up 16.3% year-on-year. “The server market is still being primarily driven by the x86 segment,” said Mike McLaughlin, principal analyst for Gartner. “That, along with the acceptance of Linux in additional application areas in the enterprise space will continue to drive demand.”

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