Server market in 2005 at highest point in five years
From the periodical marketing research from IDC, the server market totaled $51.3 billion in 2005, the highest revenue in five years. This is a growth in turnover of 4.4 percent compared to 2004. The number of servers that were traded grew even more, by 11.6% to a total of 7 million units. The increase in sales of low-cost servers is also reflected in the growth by segment: the low-end segment (<$25,000) increased in sales by 7.3%, while the mid-range segment fell by 11.5% and sales in the high-end segment (>$500,000) declined by 1.7%. Although the last quarter of the year saw a dip (-0.2%) for the first time in a long time, overall manufacturers can look back on a successful year.
Manufacturers
The distribution in turnover between the different manufacturers shows no surprises. The biggest change in the landscape from 2004 is the fact that Dell has overtaken its rival Sun, but that has been known for some time. IBM and HP are still head and shoulders above everyone else. Big Blue is still firmly in first position, but HP has clearly grown faster and the distance between the two titans has become smaller. Incidentally, the data below is about turnover, in terms of numbers the picture looks different: HP is in the lead with 30.2%, followed by Dell in second position with 23.2% of the servers.
| IBM | 16.889 | 32.9% | 16.316 | 33.2% | +3.5% |
| HP | 14.183 | 27.7% | 13.028 | 26.5% | +8.9% |
| Dell | 5.258 | 10.3% | 4.642 | 9.4% | +13.3% |
| sun | 4.879 | 9.5% | 5.129 | 10.4% | -4.9% |
| Fujitsu (-Siemens) | 2.901 | 5.7% | 2,888 | 5.9% | +0.4% |
| Other | 7,178 | 14.0 | 7.135 | 14.5% | +0.6% |
| Total | 51,288 | 100% | 49.138 | 100% | +4.4% |
Amounts in billions of dollars
HP owes its success to several things: first, it is the market leader in x86 servers with a share of 33.4%. Dell and IBM are fiercely competitive, but each had to make do with ‘only’ 20% of the x86 market. In 2005, 78.8% of x86 servers were equipped with 64-bit extensions, and within that subset HP managed to get 37% of sales. This is probably because Dell has not used Opterons and the Xeon was not 64-bit at the beginning of the year. The company also had a strong presence in blades: IDC registered a growth of 81% at HP while the average market grew only 60%. This resulted in a market share of 34.9%. The latest boost for HP was revenue from Itanium servers, which grew 75% year on year.
Operating systems
On the software side, an exciting battle is going on between Windows and Unix. The number of Windows servers sold has long outpaced the number of Unix servers, but in 2005 the two were also very close in terms of sales, selling $17.7 billion worth of servers running Windows, and for 17.5 billion with Unix. This narrow win is likely to become even more convincing in the coming years, as the trend was +4.7% for Windows and -5.9% for Unix. The biggest grower (a whopping 20.8%) was Linux, but despite this impressive increase, this collection of operating systems is still far from the other two categories: the total amounted to 5.7 billion dollars.
Processors
Although the trends show that cheaper servers are becoming more popular and the high-end Unix boxes are slowly falling out of favor, it cannot be underestimated how much this market is still worth. In the last quarter of 2005, a total of $14.5 billion worth of servers was purchased. Despite the growth of x86(-64), these low-cost servers only generated $6.8 billion in revenue, meaning that more than half of server spending in the last three months of the year went to other architectures such as Power, Itanium, PA -RISC and Sparc went. However, sales of Sparc processors have been declining for years, and PA-RISC is being replaced by Itanium, so it is expected that the two server giants IBM and HP will eventually also become diametrically opposed in terms of architecture, with Power and Itanium respectively on offer. . IBM has the advantage that it does not have to take too much into account issues such as heat development, which is apparent from the fact that the Power6 is shamelessly aimed at a clock speed of 4.5GHz. In contrast, HP saves billions of dollars in development costs by using chips designed and made by Intel.