Improving Economy Prompts Aggressive Refresh of IT Infrastructures

Enterprises around the world are aggressively refreshing their technology infrastructures as the worldwide server market increased 4.7% year over year to $10.4 billion in the first quarter of 2010, the first quarter of year-over-year revenue growth in seven quarters, as server market demand continued to improve around the globe, finds the International Data Corporation (IDC) Worldwide Quarterly Server Tracker.


"This is the third consecutive quarter that IDC reported improving market conditions for servers worldwide. The market recovery has been led by sharply higher demand for x86 servers around the world as SMB and enterprise customers aggressively refresh their infrastructures," notes Matt Eastwood, group vice president, Enterprise Platforms at IDC.


IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010 as the technology refresh extends from volume- to value-oriented systems with somewhat longer planning horizons. "It's also important to note that we are in the middle of one of the sharpest periods of market inflection in a decade and we expect significant shifts in technology usage and market shares to occur as the recovery continues," adds Eastwood.


Microsoft Windows server demand was positively impacted by the accelerating x86 server market, as hardware revenue increased 33.6% and unit shipments increased 28.3% year over year. Quarterly revenue of $5.1 billion for Windows servers represented 48.9% of overall quarterly factory revenue. This is the highest percentage of server hardware revenue that Windows servers have ever represented.


Linux server demand also improved sharply in 1Q10, with revenue growing 20.4% to $1.7 billion when compared with the first quarter of 2009. Linux servers now represent 16.2% of all server revenue, up 2.1 points over 1Q09.


Unix servers experienced 29.0% revenue decline when compared to 1Q09 as customers waited for additional detail on the Sun-Oracle server roadmap. They were also anticipating a ramp of IBM POWER7 servers, which began shipping in Q1, and, separately, HP Integrity servers based on Intel Itanium 9300 processors that were announced in April. Worldwide Unix revenues were $2.3 billion for the quarter, representing 22.2% of quarterly server spending (down 10.5 points over 1Q09).


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