IDC Forecasts Worldwide Appliance Server Revenues Are on Course to Exceed $31 Billion by 2005

FRAMINGHAM, MA – MAY 16, 2001 – With a powerful 166% revenue growth last year, appliance servers have muscled themselves into a force to be reckoned with in the worldwide server market. According to IDC, these devices are changing the way vendors and customers think about server infrastructure solutions.


"The appliance movement rose out of demands for an integrated hardware/software solution stack and the gradual movement by the industry to standardize software workloads as well as server components and hardware," said Mark Melenovsky, manager of IDC’s Global Enterprise Server Solutions research. "In addition to offering solutions, appliance servers also address ease of use and deployment along with robust system management tools to deliver a solution that reduces the demands being placed on IT personnel. This alone is a significant enough reason to expect these devices to continue to grow quickly."

And grow quickly they will. IDC estimates worldwide revenues will skyrocket from $3.8 billion in 2000 to $31.4 billion in 2005, representing a compound annual growth rate of 56%.

"Because of continued pressure to expand the Internet infrastructure, service providers, traditional businesses, and technology vendors will embrace appliance solutions with increasing regularity as horizontal scaling and ease-of-use concerns more heavily impact IT purchasing decisions," said John Humphreys, senior analyst with IDC’s Global Enterprise Server Solutions research program.

Network attached storage or filer appliance servers represent and will continue to represent the bulk of appliance server revenues, accounting for approximately 55% of the market through 2005. In terms of unit shipments, security appliance servers are currently the largest segment of the appliance server market.

IDC currently tracks six workload categories – multifunction, Webserver, caching, security, filer/storage, and other — but expects that number to increase in the coming years.

"Appliance workloads will continue to evolve, and workloads such as email, gateway, and database appliances will emerge within the next five years," Humphreys said.

IDC’s new report, Forecast and Analysis of the Appliance Server Market, 2000-2005 (IDC #B24427), analyzes the dynamics of the worldwide appliance server market. It forecasts worldwide shipments and revenues by workload category. It also illustrates vendors’ market shares in terms of shipments and revenues in each category. Trends driving market growth and the impact that server blades will have are also discussed. The report concludes with recommendations to vendors looking to increase their market share in the appliance server market. To purchase this report, contact Patrick Steeves at 1-800-343-4952, extension 6787, or at

About IDC

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

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


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