Worldwide Entry Server Market Enjoys 19 Percent Revenue Growth According To IDC Research
FRAMINGHAM, Mass., Jan. 26, 1998 — The worldwide entry server market increased 19 percent to reach revenues of $25.7 billion in 1997. This growth is even more impressive when compared to the midrange (two percent growth) and high-end (four
percent decrease) segments of the server market. According to new research from International Data Corporation, 1997 Entry Server Year In Review: Volume Players Mean Business, the low end or PC servers (Intel servers under $25K) strongly
contributed to the market's overall growth.
Worldwide PC servers reached factory revenues of $10.6 billion in 1997 and now make up over 40 percent of all entry server revenues. IDC defines an entry server as any server with an average configuration price of less than $100,000.
At the high end, Unix RISC vendors and high-end Intel suppliers are competing to carve out their own place in the entry server market. Applications driving the high end include company-wide collaborative and e-messaging, decision support,
and 'light-weight' transaction processing. Internet applications will also make an impact as transaction-oriented I-commerce continues to expand. "The entry server market will be shaped by the convergence of the volume propositions of
the low end with the value-add strategies of the high-end vendors," said Susan Frankle, program director, Commercial Systems and Servers.
In 1998, NT will begin to dilute competitive operating systems in the entry server market. NetWare and low-end Unix will feel the competitive squeeze.
Clustering and 8-way product development will be a key vendor initiative in 1998.
Intel will expand its influence in the system market, moving beyond its control of the PC arena.
Customers are buying larger and more robust server configurations, thus stabilizing average system values and keeping revenues strong.
The Internet is fueling entry server sales. Companies are using entry servers as their platform of choice for Web hosting/publishing and Internet collaborative style applications.
The small business sector is growing rapidly. IDC's end-user research shows small business customers almost always purchase servers in the entry server segment.
Compaq experienced 57 percent worldwide revenue growth in the entry server market from 1996 to 1997, to reach $3.7 billion.
IBM's worldwide entry server factory revenues grew just four percent from 1996 to 1997. This soft market growth caused the company to lose two points of market share, and account for 17 percent of factory revenues.
Hewlett-Packard gained two points of market share to reach 17 percent and battle IBM for the number one position. HP's worldwide factory revenues were up 28 percent to reach $4.3 billion in 1997.
Sun enjoyed strong worldwide revenues of almost $2.6 billion in 1997 — a 56 percent increase from the previous year. Sun's flagship, Ultra Enterprise, helped the company gain mindshare within large corporations' central IS groups.
To order a copy of 1997 Entry Server Year In Review: Volume Players Mean Business (IDC #B15150) contact Cheryl Toffel at 508-935-4389.
Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 300 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.
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