IDC Expects Western European Server Market to Show Solid Growth Between 2001 and 2005, Despite Worsening U.S. Economic Conditions
LONDON – FEBRUARY 12, 2001 – IDC expects Western European server market revenue growth to slow slightly in 2001 to 7.2%. IDC anticipates a compound annual growth rate of 9.3% over the 2000-2005 period.
Market data released today indicates Western European server market revenues were flat 2000 over 1999, looked at in current dollars, but grew 9.6% when adjusted for exchange rate fluctuations.
Explaining the results, Martin Hingley, vice president of IDC's European Systems Group, said: "The server market has been subjected to a number of disruptive influences over the past two years. The rapid build out of Internet and associated infrastructures, server consolidation and server management issues, and, of course, the problems associated with year 2000 have caused significant distortion in market patterns."
Looking forward to 2001-2005, Hingley added, "The Western European market has not grown as quickly as in the United States and has, at present, the capacity to take up slack from the U.S. market. However, there are two immediate dangers – continued exchange rate imbalances and vendors reducing focus on Europe in response to reduced U.S. demand. We expect vendors to look at the fundamentals in Europe – PC penetration is lower than in the United States; Internet build out still has a way to go; and Europe has not yet achieved U.S. levels of efficiencies from technology use. All these indicate there is room for expansion in Europe, even ignoring new technologies that require ever greater compute capacity."
· Entry level systems, defined by IDC as systems costing under $100,000, again led market growth with rackable systems – especially rack-mounted Intel architecture systems – growing at phenomenal rates. "In one of the more difficult years for the Intel server market, rack-mounted systems have been a high point. The explosion in market demand for these systems, primarily due to reduced space usage and lower administration costs, will ensure their continued growth. Vendors need to work on simplifying systems management and improving power management," said Thomas Meyer, research manager in the European Enterprise Server Group. "Intel faces considerable challenges going into 2001. There is increased competition from low-end RISC systems and from other chip vendors moving into Intel’s core market. Intel needs to make a big success of IA64 and must concentrate on the roadmaps for IA32."
· Unix showed very strong growth in 2000 in Western Europe with new midrange and entry level Unix systems being introduced by all the major vendors operating in this market. IDC expects growth to slow in 2001 as the market stabilizes, but it will continue to be one of the most interesting -and competitive – arenas.
· After a relatively slow start, Microsoft’s new server operating systems products, Advanced Server and Datacentre Edition, showed good performance in 2000, and IDC expect them to grow at a healthy rate over the forecast period.
· Linux continued to grow strongly in Western Europe, emphasizing the need for a reliable and cost-effective platform for both Internet infrastructures and other core workloads. The number of vendors launching significant Linux initiatives ensures Linux will continue to grow rapidly throughout 2005. IDC expects a move to more complex applications and hence higher value systems.
· 2000 saw major efforts in the appliance server market with both new entrants and established server vendors launching new products and honing their appliance server strategies.
IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at emea.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.
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