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Server Sales Favor Linux

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Linux servers are on the rise again thanks in part to low-end
and x86-64 based servers, according to a new survey by market
research firm Gartner.

The report, released Wednesday, said server revenue increased 8 percent in
the last three months, surpassing the $11.5 billion mark, while shipments
grew 24 percent to more than 1.6 million units over last year. The survey
confirms the now well-established hum of strong growth in the server sector.

“Overall, each region showed positive year-over-year growth in terms of
revenue,” Mike McLaughlin, principal analyst for Gartner, said in his
report. “We also saw increased activity in the x86-64 market, as well as
continued strong sales in the low-end server market.”

Based on server operating systems, Linux continued to show strong
double-digit growth in both revenue and shipments. Linux revenue grew 54.6
percent in the second quarter, and its unit shipments increased 61.6
percent. Linux represented 9.5 percent of the overall server OS revenue.

Windows continued to be the operating system of choice, accounting for
34.4 percent of worldwide OS revenues. That is a dip from earlier this year
when Microsoft’s operating system secured 35.1 percent
of the total market share.

Conversely, Unix continued its slow decline, as its revenue decreased 4.3
percent in the second quarter, and it lost more than 4 points of market

While Intel’s Itanium still grew at strong rates,
Gartner said the x86-64 CPU space saw a year-over-year growth rate of 2,183
percent. Gartner’s numbers seem to favor AMD and its
Opteron processor, which has had more than a year to mature over Intel’s
Xeon processor, which only recently added 64-bit extensions.

Still, the largest segment is still the x86-32 CPU server market, which
grew a healthy 10 percent year-over-year to earn more than $5.1 billion in
the second quarter of 2004. Growth in this area was based on sales of 2-way
and 4-way machines running on Intel’s chips.

In the vendors’ race, each of the four major manufacturers has something
to crow about. Gartner crowned IBM king based on server
revenue, as its market share increased to 30.7 percent in the second quarter
of 2004.

HP led all vendors with 463,489 units shipped in the
second quarter.

Dell experienced the strongest growth rate among
top-tier vendors, as its revenue increased 20.1 percent from the second
quarter of 2003.

And Sun Microsystems exhibited the highest growth
rate, with second-quarter shipments increasing 38.4 percent from the same
period last year. Gartner said Sun benefited from an increase in demand from
the telco sector for its Netra product line, as well as increased sales of
high-end servers to the financial sector.

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