Gartner: Server Shipments Increased Nearly 9% in 2006

By Scott Ferguson  |  Posted 02-22-2007
The number of server shipments worldwide grew nearly 9 percent in 2006, with Hewlett-Packard leading with 27.5 percent of the market, according to the latest study by Gartner.

IBM led the annual survey in terms of revenue, with $16.9 billion worth of server sales in 2006. That number represented a 1.7 percent increase from the year before, according to the Feb. 22 report.

Despite the fact that shipments totaled 8.2 million, an increase of 8.9 percent from 2005, overall revenue within the server market was nearly flat year-over-year. In 2006, server revenue stood at $52.7 million, an increase of only 2 percent from 2005.

According to Gartner, the x86 server market slowed in the fourth quarter of 2006, while IT administrators waited to evaluate newer systems based on quad-core processors.

Intel, the world's largest supplier of microprocessors, introduced its quad-core Xeon 5300 series processors in November 2006. Intel's main rival, Advanced Micro Devices, is scheduled to release its quad-core Opteron processors, code-named Barcelona, later in 2007.

"The slowdown really hit the x86 market in the fourth quarter," said Jeffrey Hewitt, a research director at Gartner, based in Stamford, Conn. "You have a lot of new stuff coming out, with multicore products and the ongoing AMD versus Intel situation. This seems to have lengthened the sales cycle and clients are waiting to evaluate these new products before they decide on what to buy."

Companies also bought fewer servers as the adoption of virtualization technology—the ability to run multiple applications and operating systems on a single server—continued to gain momentum.

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