Y2K Didn’t Slow PC Server Sales in 1999, IDC Reveals

FRAMINGHAM, Mass., February 2, 2000 — Despite Y2K buying lock downs revenue growth of PC servers registered 26.3% in 1999, bringing the market's total to over $17.3 billion and making PC servers the fastest-growing segment of the server market. The 26% leap in revenues is a significant improvement from the market's 8% growth in 1998, and IDC expects strong growth to continue into 2000.

"Price erosion in the PC server market ended, contributing to the double-digit growth," said Jean Bozman, director of IDC's Commercial Systems and Servers research program. "Additionally, the ecommerce explosion, the increase in departmental computing, and the growth of Web-enabled applications delivered by application service providers played a part in the market's growth. In the United States especially, ecommerce may be shielding the PC server market from the effects of large corporations' Y2K lock downs, which slowed down midrange and high-end server sales."

According to IDC, the top four vendors — Compaq, Dell, IBM, and Hewlett-Packard — together controlled a dominating 73% of the market's revenues, up from 67% in 1998. Compaq alone accounted for almost 31%. Hewlett-Packard, which had been the number two vendor in 1998, slipped to fourth place. Its revenues increased a respectable 25%, but Dell and IBM earned 60% and 52% increases, respectively.

"The consolidation of market share among the market's top four vendors shows how steep the climb will be for second-tier PC server vendors during 2000," said Lloyd Cohen, director of worldwide market analysis within IDC’s Commercial Systems and Servers research program. "It will become harder to climb into the top tier, unless one of the current market leaders stumbles."

IDC recently published 1999 PC Server Year in Review: Y2K Has Little Impact (IDC #B21278). This report shows preliminary results for the worldwide market. It includes vendors' 1997-1999 revenues as well as 1999 market shares. The report discusses major trends in the market. It also provides profiles on the following vendors: Acer, Compaq, Dell, Fujitsu Siemens Computers, Gateway, Hewlett-Packard, Hitachi, IBM, and NEC/Packard Bell. For a comparison basis, it shows vendors' revenues in the total server market. To order a copy of the report, contact Patrick Steeves at 1-800-343-4952, ext. 6787 or at psteeves@idc.com.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 42 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

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

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