PC servers with a smile
Sales up again, while other types of server suffer
PC-based servers are a runaway success and are increasing their presence in the IT infrastructures of most businesses.
According to analyst IDC's Western European Quarterly Server Tracker, x86 server sales in the third quarter of 2004 were up for the fifth quarter in a row. Shipments in Q3 hit 375,000, up by 19.2 per cent on Q3 2003.
IDC claimed that while times are hard in other server segments, PC-based servers are enjoying "comfortable" 20 per cent year-on-year growth in unit shipments and a 24.5 per cent rise in turnover.
In contrast, factory revenue for Risc systems declined by 11.4 per cent in the same period, despite a 9.7 per cent rise in unit shipments.
"For the first time, x86 servers generated more revenue than sales from Risc-based systems in Q3 2004," said Nathaniel Martinez, programme manager at IDC's European server group.
"European organisations are slowly moving from corporate refreshes to strategic large-scale IT infrastructure investments, helping the European server market to recover.
"Overall, growth in the European server market was mainly fuelled by demand in the volume server space, where factory revenue grew by 31.4 per cent year on year, compared with a 9.4 per cent decline for mid-range servers and a 17 per cent decline for high-end systems in the same period."
Developments in newer PC-based server technology such as blade servers, x86 64bit computing, virtualisation and dual-core processors are creating new opportunities and fuelling short-term growth.
Terry Fisher, business development manager for the HPC division at system builder Compusys, said: "Servers are very strong now and we are seeing consistent growth on dual-processor servers, high-performance server solutions and also some blade server solutions.
"However, margins on server hardware are almost non-existent. With Dell selling boxes at £299 and £399 it's hard to make margin unless you are offering tailored solutions or shifting millions of units."
Sales of x86-64 servers, which support both 32bit and 64bit software applications, continued to do well, enjoying 112.1 per cent sequential growth in unit shipments and a 65.5 per cent rise in factory revenue.
IBM narrowly retained the overall number-one spot in the western European server market, with a 31.4 per cent market share. HP took second place overall with 30.9 per cent, but was the leading firm in terms of unit shipments.