According to the latest estimates of server sales from the IT analyst firm Gartner, as companies continue to embrace virtualization technologies, they are buying fewer physical servers causing a slow down in the growth of the server market.

The report shows that worldwide revenue from server sales grew by 4.4 percent to just over $13 billion, however that is down from the 5.1 percent growth experienced in total last year. And with about 2 billion servers sold worldwide during the third quarter of 2006, the volume grew by 9.1 percent over the same quarter last year, but still down from the 13.2 percent growth seen last year.

IBM Corp. continued as the server market leader with a 33.7 percent share and a 7.4 percent revenue gain to $4.38 billion. Hewlett-Packard Co. followed with 25.3 percent with a revenue decline of 6 percent to $3.29 billion. Dell ranked third with a 10.8 percent share with Sun Microsystems not far behind in fourth place with 10.1 percent.

Gartner says despite the numbers, the server market is still growing, but that they expect it to grow at a slower rate because of the increased adoption of virtual servers. The analyst firm expects that virtualization technologies will have a significant impact on server sales over the next five years, especially with regard to x86 class servers.

Posted by David Marshall on November 30, 2006 03:51 PM