Computer makers sold $17.7 billion worth of Windows servers worldwide in 2005 compared with $17.5 billion in Unix servers, IDC analyst Matthew Eastwood said of the firm's latest Server Tracker market share report. "It's the first time Unix was not top overall since before the Tracker started in 1996."
And in another first, fast-growing Linux took third place, bumping machines with IBM's mainframe operating system, z/OS. Linux server sales grew from $4.3 billion in 2004 to $5.3 billion in 2005, while mainframes dropped from $5.7 billion to $4.8 billion over the same period, Eastwood said.
Servers are powerful networked machines for tasks such as handling e-mail, financial transactions, airline reservations and file storage. According to IDC, the overall server market grew 4.4 percent to $51.3 billion from 2004 to 2005. Another market watcher, Gartner, released data Tuesday that largely agreed, with 4.5 percent growth to $49.5 billion.
Conventional wisdom in the 1990s forecast that Microsoft's Windows would inexorably move to market leadership, but its arrival was slowed by several factors. For one thing, Windows took much longer to mature than many expected. For another, Unix--in particular Sun Microsystems' Solaris--succeeded wildly in the dot-com spending spree. And out of the blue came Linux, an operating system modeled after Unix but popular on the same hardware as used by Windows--servers built with x86 processors such as Intel's Xeon and, increasingly, Advanced Micro Devices' Opteron.
The Unix market, though, is still huge, and the three major players are fighting for every scrap. In another first, IBM secured the top spot in 2005, with 31.8 percent of the market to Hewlett-Packard's 29.8 percent and Sun's 26.2 percent.
"They set that out as a goal, and it does appear they achieved it," Eastwood said.
Sun is trying to restore Unix fortunes as well by making Solaris an open-source project and bringing it to x86 servers. Although Sun's Unix revenue continued to decline, dropping 10 percent to $4.6 billion in 2005 according to Gartner, Sun dominated unit shipments with 59 percent of the 272,000 shipped.
Overall market growth
IBM led the overall market in 2005 in terms of revenue, with $16.9 billion in sales and 32.9 percent share, IDC said. But IBM's growth was slower than the overall market, and the company lost 0.3 percentage points of share.
Two major server companies that grew faster than the overall market: No. 2 HP, with 8.9 percent growth to $14.2 billion, and Dell, with 13.3 percent growth to $5.3 billion.
No. 4 Sun, which has been losing share of server revenue for years, continued its declines, with revenue shrinking 4.9 percent to $4.9 billion. But its new "Galaxy" line of x86 servers and UltraSparc T1 "Niagara"-based servers could help the company in 2006, Eastwood said.
"I think Sun's pretty well-positioned this year for some growth," Eastwood said. In the fourth quarter of 2005, Sun's x86 server revenue grew almost 69 percent to about $100 million, though it's still in sixth place.
Lower-end servers
As in years past, much of the growth took place in lower-end servers costing $25,000 or less--a category that accounted for 6.8 million of the 7 million units shipped, Eastwood said. As these systems assume important duties and simultaneously juggle multiple tasks through virtualization technology, they more often are sold with large amounts of memory and internal storage, Eastwood said.
"The systems and configurations going out are much richer," he said, a fact that's slowing the decline in average selling prices that has been typical in the computing industry.
AMD's Opteron processor made significant strides in the lower-end market. Servers using AMD's chips accounted for 6 percent of the x86 server market in the fourth quarter of 2004, with the rest being Intel chips, but a year later increased to 14.3 percent.
"There's real strong movement there," Eastwood said.
The lower-end server market is strategic because it's growing faster than the overall market. For example, in the fourth quarter, x86 server sales grew 6.7 percent to $6.8 billion while the overall server market shrank 0.2 percent to $14.5 billion.
Another growth category is blade servers, thin models that slide side-by-side into a chassis like books into a bookshelf. The chassis interconnects the blades and supplies communal resources such as power and networking hardware.
Blade server revenue grew 84 percent from $1.15 billion in 2004 to $2.11 billion in 2005. Meanwhile, blades themselves got more powerful and their average price rose from $3,750 to $4,200 during the same period, he added.
IBM continues to lead the blade market with 40.9 percent of sales. HP is in second place with 34.5 percent, while Dell trails in third at 10.1 percent.
| 02/22/06
