Worldwide Server Factory Revenues Decline 16% in Second Quarter, According to IDC

FRAMINGHAM, MA – SEPTEMBER 7, 2001 – The global economic situation proved to be a killjoy for the worldwide server market during the second quarter. According to IDC, worldwide server factory revenues declined 16% from $14.4 billion in 2Q00 to $12.1 billion in 2Q01. Although the United States experienced the most downturn in the market, the slowdown has definitely spread to other areas of the world, with most regions experiencing a decline.


"Even though we knew that the server market would be affected by the economic situation, we did not expect a decline of this magnitude," said Vernon Turner, IDC's vice president of Global Enterprise Server Solutions. "This is the biggest decline that the server market has experienced over the past five years."

According to IDC, the regional revenue declines in this space are as follows:

United States -25%

Western Europe -8%

Japan -20%

Asia/Pacific -3%

Canada -13%

Rest of World -11%

Despite declining revenues in the overall server market, the rack-optimized segment proved to be the bright spot in the server market once again. Shipments increased 46%, resulting in revenue growth of 13%. By comparison, revenues in the non-rack-optimized server market fell 23%. "This shows that infrastructure-oriented technology is still being deployed in the traditional enterprises," Turner said.

IBM continued to slowly grind away at its competition and was the only top-five player to increase its revenues in the worldwide market, with a 5% growth. While Dell avoided declining revenues in this space, year-over-year revenue growth came in flat. IDC rates the top five vendors in the worldwide market according to revenue share as follows:

1. IBM 26%

2. Sun Microsystems 16.5%

3. Compaq 16.1%

4. Hewlett-Packard 14%

5. Dell 7%

Although worldwide shipments declined 3% to 1.04 million in 2Q01 from a year ago, Dell and IBM were the only top five vendors to increase their shipment counts, with 31% and 6% growth, respectively. Dell appeared to keep one step ahead of the travelling downturn by growing its business outside of the United States. According to IDC, the top five vendors by shipment share are as follows:

Compaq 25%

Dell 17%

IBM 14%

Hewlett-Packard 10%

Sun Microsystems 7%

Finally, the writing on the wall for Netware-based systems must be getting brighter as the operating system showed a much larger revenue decline than any other environment. Year-over- year revenue comparisons from IDC found a 34% fall-off, which was much larger than any other server platform.

IDC's Worldwide Quarterly Server Tracker is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture.

To purchase the Worldwide Quarterly Server Tracker, contact Hoang Nguyen at 508-935-4718 or

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. 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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