The weak US dollar played a key role in getting the western European server market off to a good start in 2004, according to the latest market research from IDC.
The first quarter 2004 saw 7.7 per cent year-on-year revenue growth compared with the same period in 2003. The growth follows two strong previous quarters, but is down 19.6 per cent on the strong Q4 results last year.
Q1 is traditionally a weak period for server sales and it was propped up this year by weak US dollar exchange rates. IDC pointed out that if the rates had remained constant throughout the year the European server market would have recorded a negative revenue figure.
"While the impact of a weak dollar on a market heavily dominated by US-based vendors should not be downplayed, the rebound in server spending has continued every quarter since the second half of 2003, benefiting from a general uptake in IT spending across several verticals, including finance, telecoms, government and manufacturing," said Nathaniel Martinez, senior analyst at IDC's European Server Group.
"Business confidence remains shaky, nevertheless, and continues to cause caution in the buying decision process."
The x86 segment, including both 32bit and 64bit-based systems, recorded a rise in sales of 23.2 per cent, the highest year-on-year revenue growth since the market downturn. This was helped by increasing usage across multiple workloads and strong software and hardware replacement.
The Epic-based market grew significantly and exceeded 1,000 systems in a quarter for the first time, while quarterly revenues doubled. Risc-based systems saw positive unit sales but revenues remained negative while CISC-based systems were close to flat in unit and revenue growth.
Linux servers grew by 41.5 per cent in revenue terms, accounting for 15.1 per cent of all server shipments in Q1, while blade servers continued to grow significantly, representing 4.8 per cent of overall server units shipped in Q1 2004.
Terry Fisher, business development manager for the HPC division at Compusys, said: "Overall server business was strong in Q1 for us, and sales of both Linux and blade servers are getting stronger.
"Blades won't suit every business application but they are ideal for web hosting applications because they can be up and running in minutes. The number of applications blades can address is growing quickly, however."
IBM and Hewlett-Packard consolidated their significant lead in the marketplace during Q1, controlling shares of 33.5 per cent and 30.4 per cent respectively.
Sun, Fujitsu Siemens and Dell controlled third, fourth and fifth places with market shares of 12 per cent, 9.3 per cent and 6.8 per cent.
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