Worldwide Server Factory Revenues Decline 4% in First Quarter, IDC Says

FRAMINGHAM, MA – JUNE 13, 2001 – The sluggish U.S. economy proved to be a killjoy for the worldwide server market during the first quarter. According to IDC, worldwide server factory revenues declined 4% from $13.8 billion in 1Q00 to $13.3 billion in 1Q01. In the U.S. market, the descent was much more precipitous as revenues plummeted 16% from $5.2 billion in 1Q00 to $4.4 billion in 1Q01.


"Though the decline in the U.S. market was quite severe, strong growth in other parts of the world such as Western Europe and Asia/Pacific kept worldwide damage in check," said Vernon Turner, IDC's vice president of Global Enterprise Server Solutions.

According to IDC, Western European server factory revenues soared 16% year-on-year in 1Q01. The jump in Asia/Pacific, excluding Japan, was almost as impressive at 12%. The server market in Japan, however, was impacted by a cutback in government spending and the declining value of the yen, causing revenues to stumble 12% from the year-ago quarter.

Despite declining revenues in the overall server market, the rack-optimized segment turned in another stellar performance. Shipments jumped almost 138%, igniting revenue growth of 87%. In comparison, revenues in the non-rack-optimized server market fell 9%.

"In this economy, companies are hypersensitive about cost-savings, and rack-optimized servers are all about savings," Turner said. "They help organizations save space and reduce their energy consumption."

In terms of vendor performance, IBM and Dell were the only top-five players to increase their revenues in the worldwide market, with 13% and 21% jumps, respectively. IDC rates the top five vendors in the worldwide market according to revenue share as follows:

1. IBM 25%

2. Hewlett-Packard 16%

3. Sun Microsystems 15.4%

4. Compaq 14.7%

5. Dell 7%

In the U.S. market, Dell was the only top-five vendor to increase its revenues with 12% growth. According to IDC, the top five U.S. vendors by revenue share are as follows:

1. IBM 22%

2. Sun Microsystems 18%

3. Hewlett-Packard 16.3%

4. Compaq 15.9%

5. Dell 12%

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 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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