Worldwide Server Market to Decline 14.5% in Q2 2002 but Market Will Return to Positive Growth in Third Quarter, IDC Says

FRAMINGHAM, MA – JUNE 13, 2002 – Weaker than expected recovery in the U.S. and Japan has led IDC to lower its worldwide server market expectations for the second calendar quarter of this year, down 14.5%. While IDC continues to forecast a return to positive growth in the third and fourth quarters of 2002, the market recovery will not be enough to offset declines experienced during the first half of the year. IDC anticipates the worldwide server market will decline by -5% in 2002 over 2001.

 

While near-term market conditions are still challenging, the market research firm anticipates positive growth during the latter half of this year continuing into 2003. "After almost two years of battling tough economic conditions and capital spending freezes, the server market is well positioned to regain momentum in 2003 and beyond," said Vernon Turner, IDC's Group Vice President of Global Enterprise Server Solutions. IDC forecasts the server market will achieve a compound annual growth rate of 3.8% over the next five years, representing a $66.9 billion opportunity in 2006.

From a regional perspective, the U.S. market will continue to have the greatest share of the server market by the end of the forecast period. This is followed by Western Europe and Asia/Pacific excluding Japan. While the Japanese market is expected to remain, the rest of Asia/Pacific will illustrate significant growth with a projected 9% CAGR over the next five years driven by an anticipated wave of telecom server investments beginning to unfold after 2003.

Another key area of growth is within the Blade server market, which is expected to reach $3.7 billion by 2006. Server blades are anticipated to represent 20% of server unit shipments by the end of the five-year forecast period. "The Blade market is a new area of opportunity for server vendors," said Mark Melenovsky, IDC’s Research Manager for Server and Infrastructure Hardware Research. "This new market will bring dramatic changes to the server landscape while creating new areas of demand for server management and clustering."

Contrary to the Blade market, IDC believes proprietary mainframe systems will lose share throughout the forecast period, declining from approximately 13% in 2001 to 8% in 2006. "Much of the decline in share for mainframe systems is attributed to the transition of some workloads moving to Unix- and Windows-based systems in Japan. There is still considerable investment in IBM zSeries machines, which will remain an important element of many end users’ computing infrastructures going forward," said Steve Josselyn, Research Director, Enterprise Server Fundamentals program.

IDC's Worldwide Quarterly Server Forecast is a quantitative tool for analyzing the future global server market on a quarterly basis. The Forecast includes quarterly shipments (both ISS and upgrades) and customer revenues segmented by region, operating system, price band, CPU type, form factor, and CPU capacity. For more product information, please Steve Josselyn at 508-935-4247 or sjosselyn@idc.com.

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 www.idc.com.

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

 

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