IDC predicts steady growth of worldwide server market

Framingham, 24 October 97 According to an IDC report, the worldwide server market's steady growth is expected to continue through 1997 and beyond. IDC's new bulletin, Server Market Review and Forecast, 1995-2001 forecasts that, assisted by the overall stability of the world's major economies, server spending will keep pace with the rise of overall IT hardware spending. Corporations will be spending more and more toward better servers, driving worldwide end-user server revenues to $92.9 billion by the year 2001, a compound annual growth rate of 9.1 percent.

IDC also predicts a slight lag toward the end of the century as customers focus resources on resolving year 2000 issues, but the overall outlook remains positive. Intel-based servers accounted for 21 percent of end-user server revenues in 1996. The report forecasts that by 2001, Intel chips will make up 41 percent of these revenues. Over the next five years, SMP will take center stage as MPP technology continues to struggle. This segment consists of servers designed to be distributed memory servers as opposed to functionally similar clustered servers. Even with the advent of the Microsoft-led Wolfpack on NT, only about 10 percent of end-user spending will go toward MPP over the reported period.

The report also forecasts that NT growth (generating $18.6 billion in end-user server sales by 2001) will outpace other markets, specifically high-end NetWare and low to midrange Unix-based environments. Collaborative computing and decision support will be the major applications growth areas for servers. Business processing will nevertheless continue to be the largest application segment and large corporations will consolidate, and potentially centralize, server investments in an effort to simplify management and reduce costs.

One of the most important battles in the IT market is for leadership in the server hardware segment. The server is the center of the hardware universe as it dictates which peripherals can attach to it, what communications ports are available, and what systems and applications software will run. In the years to come, IDC believes the data stored on a server and the operational procedures that surround it, will become more valuable.

Sandra Wermer