IDC Finds Mixed Server Market in 3Q '98

Despite a three percent drop in revenues caused by price cuts, the global server market for the third quarter had year-over-year shipment growth of 15 percent with some regions experiencing surging demand, according to research from International Data Corp.

Economic turmoil in Japan continued to affect the server market, with various vendors suffering as revenues there dipped 38 percent compared to the third quarter of last year, the Framingham, Massachusetts-based market researcher found. Excluding Japan, the Asia-Pacific region broke out of its server slump and had a 15 percent revenue boost compared to a year ago.

The U.S. market grew 8 percent compared to a year ago. Western Europe had a good quarter as well, with server revenue there growing 28 percent.

Vendors with strong strategies for taking advantage of market trends showed the strongest gains, including Dell Computer Corp. and Sun Microsystems Inc. Dell had seen annual growth rates topping 300 percent in 1996 and early last year, and while those heady figures seem to be in the past, the company still managed 62 percent server revenue growth and 76 percent unit shipment growth compared to a year ago, IDC found.

Sun now ranks fourth among server vendors based on revenue with 39 percent growth from a year ago. IBM Corp., which is first in the market, had 20 percent server revenue growth and Hewlett-Packard Co., which holds the No. 2 spot, had 17 percent revenue growth.

Compaq Computer Corp. ended the quarter in the third spot, with its acquisition of Digital Equipment Corp. and that company's server share offsetting what otherwise would have been a difficult third quarter for Compaq in that market, IDC said.

IDC, in Framingham, can be reached at +1-508-872-8200 or at

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