Linux Paces Strong Server Growth

May 28, 2004 (11:05 AM EDT)

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A 57 percent growth rate in Linux servers in the first quarter of 2004 paced a strong recovery in the overall server category in which nearly all segments have been showing growth, according to a new report by the International Data Corp.

IDC reported Friday that Linux server sales jumped 56.9 percent while unit shipments grew 41.8 percent in the first quarter of 2004 compared with the first quarter of 2003.

"Linux servers are playing increasingly important roles in IT customers' computing infrastructure," IDC analyst Jean Bozman said in a statement. "They are taking on enterprise workloads, now that more ISV applications are available for both technical and commercial workloads on the Linux server platform."

Bozman, who is research vice president of IDC's Global Enterprise Server Solutions unit, said Linux server revenue and unit shipments have been growing at double-digit rates since late 2002. The first quarter marked the second straight quarter in which Linux servers logged more than $900 million in worldwide factory revenue.

The report had good news for servers nearly across the board -- there was a slight dip in Unix server sales -- with factory revenue growing at a 7.3 percent rate year-over-year in the quarter. Total revenues for the quarter were $11.5 billion with IBM posting $3.4 billion or 29.7 percent of that figure. IDC said Unix server revenue slipped slightly, dropping 3 percent worldwide. However, Unix revenues were up in the Japan and Asia/Pacific region.

Although Windows server growth percentages trailed Linux, the Windows category far outpaced Linux logging some $3.8 billion in the quarter. Factory revenues for Windows servers gained 16.4 percent, IDC said, and unit shipments jumped 26.5 percent.

As for vendors, IBM, already noted, was in first place while Hewlett-Packard placed second with revenue of $3.1 billion in the quarter for a 27 percent market share. In a statistical tie for third place were Sun Microsystems and Dell Inc. each with nearly 10 percent of the market and each with revenues of about $990 million.

Vernon Turner, the IDC unit's group vice president, said all the server numbers taken together demonstrated that IT spending has been rising as IT enterprises rebuild infrastructures in the wake of a three-year slowdown.