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IDC: Global Server Revenue In Decline, Unix Hit Hardest

By - Source: Toms IT Pro

The IDC reports a -3.7% overall revenue decline in the worldwide server market, with IBM and Oracle hit particularly hard. The report details a -19.4% and -16.0% revenue decline for IBM and Oracle respectively, in the third quarter of 2013 compared to same quarter last year. Despite the overall decline, HP regained top market share and Cisco realized a 42.8% revenue growth year-over-year in the third quarter of 2013.

The volume systems market saw revenue growth of 3.5%, while midrange systems declined by -17.8% and high-end systems declined by -22.5% since third quarter of 2012.

Unix servers experienced a large year-over-year revenue decline of -31.7% in this year's third quarter, marking the lowest ever revenue decline for Unix reported by the IDC. Meanwhile, Linux servers saw a 5.6% revenue increase since third quarter, 2012 and now represent 28.0% of the server revenue reported by IDC. Microsoft servers saw a slight decline of -1.3% year-over-year in the third quarter of 2013.

"Worldwide server revenue declined in all major geographic regions including Americas, EMEA, and Asia/Pacific in the third quarter. The market was impacted by a steady transition from 2nd Platform to 3rd Platform workload demand coupled with particularly weak sales of Unix servers, which served to further dampen the market," according to Matt Eastwood, Group Vice President and General Manager of Enterprise Platforms at IDC. The "2nd Platform" is an IT model dominated by client-server architecture, while "3rd Platform" is cloud and mobile-based hardware and applications.

Further indication of the growing influence of cloud computing is the new vendor category of Original Design Manufacturer (ODM). ODMs, such as Quanta Computer, Wistron Group/Wiwynn, and Inventec Corporation, are cutting into the brand-name server market. Google, Amazon, Rackspace and Facebook made up 79.6% of revenue for ODM Direct servers in the third quarter.

The news isn't all bad for major hardware vendors. The IDC expects an increase in demand in 2014 with companies refreshing their hardware.

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James Sullivan is a freelance technology writer whose concentrations include cloud computing and video game development. He is based in Portland, Oregon.

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