x86 Systems Drive Growth in a Dynamic 3Q05 EMEA Server Market, Says IDC

LONDON and PRAGUE – November 29, 2005 – According to IDC's Quarterly Server Tracker, factory revenue in the EMEA server market grew by 2.5% in the third quarter of 2005 over the same period in 2004. This equates to $3.7 billion and represents 31.7% of total worldwide server revenue for 3Q05. A euro view of the 3Q05 market is marginally more positive, with 2.8% growth over 3Q04, amounting to *3.1 billion. Unit growth remained strong and in double digits at 16.7%, equating to 552,000 shipments across EMEA.

Growth of x86 systems was a significant contributor again with 11.6% and 18.6% growth for factory revenue and units, respectively. "The x86 market continues to erode share from the RISC Unix market as enterprise and SMB customers continue the migration towards industry standards," said Daniel Fleischer, senior research analyst, European Enterprise Server Solutions.

"As in the previous quarter, rack-optimized systems remain strong together with blades which, continue to demonstrate triple-digit growth on an annual basis. Looking forward the degree of growth seen in the server blade market is expected to subside for a period as we have now seen early adopter groups deploy blades and vendors look to make the next push into the mass-market and in particular the SMB space."

The Central Europe, Middle East, and Africa (CEMA) region remained the driving force behind the revenue growth in EMEA, with growth of 15.3%, to $658.4 million, compared to Western Europe, which remained flat at 0.2% and $3.1 billion in revenues. Central and Eastern Europe (CEE) drove growth with 25.6% growth compared with the Middle East and Africa (MEA) at 4.8%.

As a result, we have seen CEE increase in share to represent 9.8% of revenue while MEA remains at 7.9% of factory revenue. "For the third quarter in a row, the server markets in the CEMA region exhibited double-digit growth in revenue, with enterprise server shipments increasing a substantial 36.0%," said Stefania Lorenz, program manager, IDC CEMA Systems.

"With the privatization of key verticals like banking, energy, and telecommunications in full swing or completed in many of the countries, demand should stay strong as high-level hardware continues to be a top priority. In addition, the region has a large variety of strong verticals such as oil, gas, mining, and the public sector sees continued investment flowing into both CEE and MEA."

EMEA server market 3Q05 highlights:

— CEE was the major contributor to revenue growth in EMEA this quarter.

— HP continued to lead the market in 3Q05, increasing revenue share to 33.9%, its highest share for four years (since 3Q01, assuming combined revenue for HP and Compaq).

— RISC Unix's weakness is exacerbated by strength in the x86 market. Strength in the high-level x86 market in particular is eroding share of the low-end RISC Unix market.

— EPIC systems nearly doubled revenue market share compared to a year ago.

— Blade growth remains in the triple digits on an annual basis, increasing share to represent 4.3% of factory revenue in 3Q05.

— Annual Opteron unit growth is 150.6%, which sees AMD's 64-bit processor represent 5.1% of total x86 shipments.

IDC's Quarterly Server Tracker IDC's Quarterly Server Tracker is a quantitative tool for analyzing the 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, country, operating system, price band, CPU type, and architecture. For more information, please contact Thomas Meyer on +44 (0)20 8987 7203 or email tmeyer@idc.com.

About IDC

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