Performance improvements driving down server shipments

Revenues up but shipments down as users buy fewer, more powerful systems


As reported yesterday, the server market remains strong but research shows unit shipment rates slowing as companies buy fewer, but more powerful, machines.

The effects of virtualisation, the emergence of multicore processing and other consolidation efforts are evident in server sales and market share numbers in IDC's Worldwide Quarterly Server Tracker report for the third quarter. A similar trend toward slower server unit sales growth was also evident in Gartner Group’s third quarter server report.

IDC said that overall server revenue grew by 3.5 per cent from the year-earlier quarter to $12.9 billion, the fastest growth rate in four quarters. But IDC analyst, Jed Scaramella, points to slower unit sales growth, particularly for industry standard servers, as evidence of virtualisation and other data centre consolidation efforts by customers.

"We have started to see unit shipment in the x86 market tempered a little bit," Scaramella said. Unit shipments of x86-based servers grew by 8.8 per cent in the third quarter, down from 9.8 per cent in the second quarter and 11 per cent in the first.

Virtualisation enhances server usage by running multiple applications on the same physical server and without it, some servers operate at only 15 per cent to 20 per cent of capacity. Companies are also buying new servers with dual-core or quad-core processors that offer more computing power than older models with single-core processors. The upshot is customers improve the data centre’s capability with fewer servers, Scaramella said.

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