A slowdown in demand for Linux servers did not prevent overall global server sales inching up to $12.3bn in the second quarter of 2006
Linux servers now represent 12 per cent of all server revenue

Linux suffers server sales slowdown

Dell down, Sun up in latest IDC Server Tracker

Robert Jaques

A slowdown in demand for Linux servers did not prevent overall global server sales inching up 0.6 per cent year over year to $12.3bn in the second quarter of 2006, new research has revealed.

IDC's latest Worldwide Quarterly Server Tracker found that demand in the US and Asia/Pacific (excluding Japan) led to positive results in these markets.

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The regions showed year-over-year growth of 3.6 per cent and 2.6 per cent respectively, while weaker results in EMEA and Japan brought the overall growth rate down.

After 15 consecutive quarters of double-digit, year-over-year revenue growth, IDC reported that spending on Linux servers "moderated significantly", growing 6.1 per cent to $1.5bn when compared with the second quarter of 2005.

Linux servers now represent 12 per cent of all server revenue, up slightly from the second quarter of 2005. Linux server shipments grew 9.7 per cent, with the volume server segment representing the majority of both revenue and units.

Unix servers experienced a 1.6 per cent revenue decline year over year as unit shipments fell 1.8 per cent when compared with the second quarter of 2005.

Worldwide Unix revenues reached $4.3bn for the quarter, representing 35 per cent of quarterly server spending and reflecting continued IT investment in this server market segment, with particular strength in the volume segment of the Unix market.
Microsoft Windows servers enjoyed positive growth as revenues grew 3.1 per cent and unit shipments grew 11 per cent year over year.

Significantly, quarterly revenue of $4.2bn for Windows servers represented 34.2 per cent of overall quarterly factory revenue, as customers deployed more fully configured Windows servers as part of server consolidation and virtualisation initiatives.

"Linux and Windows servers continued to grow unit shipments at double-digit rates, but revenue growth for both types of servers moderated to single-digit growth," said Jean S. Bozman, research vice president for worldwide server research at IDC.

"This shows that average sales values are under intense price pressure as workloads are consolidated on small form-factors, and as server vendors compete intensely on volume server platforms that are the key building-blocks for scale-out deployments."

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