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Blade server growth drives revenue Q3 '06

IDC reports that third-quarter server revenue is the best it's been in a year.

Sales of blade servers drove the biggest increase in server revenues in a year, according to a study by Framingham, Mass.-based IDC.

Blades saw an almost 30% jump in revenue in the third fiscal quarter over the same quarter last year -- and it still has room to grow, representing less than 6% of all server revenue. IBM is the leading seller of blade servers with about 42% of the market, followed by Hewlett-Packard Co. (HP) with 35%, according to the report.

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The blade server architecture includes a chassis, which can hold a dozen or more blade servers depending on the vendor. The blade servers can then be inserted and taken out of the chassis like books on a shelf. This gives data centers some flexibility in terms of being able to add, remove and replace servers as needed. There are some issues with the architecture, however, as it generates a lot of heat in a smaller envelope, and in some cases can be very heavy.

The sales of high-end enterprise servers, especially IBM's mainframes, also drove server sales upward. High-end enterprise server revenue grew about 9%, largely due to IBM System z revenue jumping 25% over the same period last year, according to IDC. The research firm attributed the increase to Big Blue's introduction of two new mainframes – the traditional behemoth and a smaller mainframe called the z9 Business Class -- since the summer of 2005.

Midrange enterprise systems ($25,000 to $500,000) revenue dropped for the fourth fiscal quarter in a row, going down 2.3%. Meanwhile, the sales of volume servers (less than $25,000) grew 3.8% but were tempered by the onslaught of virtualization, according to IDC.

Other findings from the study:

  • IBM remains the server revenue leader with 33%, followed by HP with 26%, Dell Inc. with 10.5% and Sun Microsystems Inc. with 10%.
  • IBM, HP, Dell and Sun all saw revenue growth in x86 servers.
  • Unix servers continued their steady decline with a 1.7% drop but still represent 30% of server revenues. Meanwhile, EPIC/Itanium-based systems grew almost 24% over the same time last year.
  • Windows server revenues grew almost 5%.
  • Linux servers grew 5.4%.
  • Intel-based servers gained market share in the x86 space over Advanced Micro Devices Inc. (AMD)-based servers, due in large part to the introduction in June of a dual-core processor, dubbed Woodcrest, according to IDC.
  • Let us know what you think about the story; e-mail: Mark Fontecchio, News Writer

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