Entry Servers Defy Market Momentum and Register a 10% Increase in 1999, According to IDC

FRAMINGHAM, Mass., February 1, 2000 – While the high-end and midrange server markets were plagued with substantial revenue losses in 1999, the entry server market managed a healthy 10% increase in worldwide revenues. IDC estimates the total worldwide server market exceeded $29 billion in 1999.

"Demand for entry servers as front-end servers for the Internet and as engines for ecommerce helped fuel growth in the market," said Lloyd Cohen, director of worldwide market analysis within IDC's Commercial Systems and Servers research program. "Additionally, the entry server space appears to have been insulated from the ramifications of the Y2K spending lock down as seen in the midrange and high-end server segments." IDC classifies servers priced under $100,000 as entry servers.

During 1999, Compaq wrestled the entry server market-leading position away from IBM with the help of a powerful 44% year-over-year increase that brought its revenues to over $6.8 billion. IBM, meanwhile, suffered a 2% setback, pushing back its revenues to $4.8 billion. Dell achieved the largest revenue jump with a 60% increase over last year. Sun Microsystems also outperformed the market with 24% growth.

IDC warns, however, that the types and brands of servers that did well during the 1990s won't necessarily be as successful in the new millennium. "Linux, the emergence of server applications, and the promise of IA64 will all combine to allow IT managers to formulate a new picture of IT infrastructure after the year 2000," said Jean Bozman, director for IDC's Commercial Systems and Servers research program. "Winning characteristics for servers in the 2000s include built-in high-availability features, hot-swap hardware components, redundant power supplies, and competitive pricing for entry-level, midrange, and high-end servers."

IDC recently published 1999 Entry Server Year in Review: Navigating the Y2K Pitfalls (IDC #B21281). This report shows vendors' 1997-1999 revenues and market shares in the worldwide entry server market. For a comparison basis, it also shows vendors' revenues in the total server market. The report analyzes vendors' 1999 performances, the competitive landscape, and major trends affecting the market. It also discusses what to expect in the entry server market in 2000. To order a copy of the report, contact Patrick Steeves at 1-800-343-4952, ext. 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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