Global Server Revenue Hits Dotcom Bubble Levels

The global server market had another solid quarter, posting the eighth consecutive quarter of positive revenue growth. According to IDC, $13.0 billion of Q1 revenue is back at 2001 levels - the very end of the dotcom bubble and the time frame in which we saw first clear signs that the bubble would burst - which may be an indication just how inflated the server market was seven years ago.

IDC said that, despite the slowing U.S. economy, more than two million servers were shipped during the quarter, translating into a 7.8% year-over-year growth. However, the driving force for growth was the high-end enterprise server segment with a gain of 9.4% gain, while the usually strong volume server segment saw its revenue growth pace dropping to 5.4%, while mid-range enterprise server market actually declined by 7.2% - the fourth consecutive quarter of declining revenue for the segment.

The x86 server market slowed slightly in Q1, growing only 4.4% year over year to $7.0 billion worldwide. Unit shipment growth was up 8.5% to 1.9 million servers. Dell, Fujitsu/FSC and Sun were the only top 5 server vendors to outgrow the market in 1Q08 - growing factory revenue 9.4%, 7.9%, and 26.2% respectively - and gaining x86 market share in the process. HP led the market with 34.3% x86 revenue share with Dell holding second place with 22.7% revenue share, IDC said.

Microsoft remains the strongest brand in servers in terms of software. Windows-based servers comprised $5.1 billion or 39.2% of all server revenue in Q1. Unix servers came in at 30.6%, Linux at 13.7% and IBM z/OS servers at 8.4%.