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Server Sales Favor Linux - InternetNews.
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Server Sales Favor Linux

By Michael Singer   |    August 25, 2004
Page 1 of 1

Linux servers are on the rise again thanks in part to low-end and x86-64 based servers, according to a new survey by market research firm Gartner.

The report, released Wednesday, said server revenue increased 8 percent in the last three months, surpassing the $11.5 billion mark, while shipments grew 24 percent to more than 1.6 million units over last year. The survey confirms the now well-established hum of strong growth in the server sector.

"Overall, each region showed positive year-over-year growth in terms of revenue," Mike McLaughlin, principal analyst for Gartner, said in his report. "We also saw increased activity in the x86-64 market, as well as continued strong sales in the low-end server market."

Based on server operating systems, Linux continued to show strong double-digit growth in both revenue and shipments. Linux revenue grew 54.6 percent in the second quarter, and its unit shipments increased 61.6 percent. Linux represented 9.5 percent of the overall server OS revenue.

Windows continued to be the operating system of choice, accounting for 34.4 percent of worldwide OS revenues. That is a dip from earlier this year when Microsoft's operating system secured 35.1 percent of the total market share.

Conversely, Unix continued its slow decline, as its revenue decreased 4.3 percent in the second quarter, and it lost more than 4 points of market share.

While Intel's Itanium still grew at strong rates, Gartner said the x86-64 CPU space saw a year-over-year growth rate of 2,183 percent. Gartner's numbers seem to favor AMD and its Opteron processor, which has had more than a year to mature over Intel's Xeon processor, which only recently added 64-bit extensions.

Still, the largest segment is still the x86-32 CPU server market, which grew a healthy 10 percent year-over-year to earn more than $5.1 billion in the second quarter of 2004. Growth in this area was based on sales of 2-way and 4-way machines running on Intel's chips.

In the vendors' race, each of the four major manufacturers has something to crow about. Gartner crowned IBM king based on server revenue, as its market share increased to 30.7 percent in the second quarter of 2004.

HP led all vendors with 463,489 units shipped in the second quarter.

Dell experienced the strongest growth rate among top-tier vendors, as its revenue increased 20.1 percent from the second quarter of 2003.

And Sun Microsystems exhibited the highest growth rate, with second-quarter shipments increasing 38.4 percent from the same period last year. Gartner said Sun benefited from an increase in demand from the telco sector for its Netra product line, as well as increased sales of high-end servers to the financial sector.