Volume 16, Number 12 -- March 26, 2007

Financial Services Industry Spent the Most on Servers in 2006, Says Gartner

Published: March 26, 2007

by Timothy Prickett Morgan

Did you ever wonder who is the biggest buyer all of those tens of billions of dollars in servers that IT vendors sell every year? Why, it is exactly who you think can most afford it: the banks, insurance companies, and other financial services firms who play with your money to make their money. These are the same companies that spend the most money on IT in general--and who have historically--so this stands to reason.

According to market statistics compiled by Gartner, the financial services industry accounted for $13.2 billion in server purchases in 2006, up 3.2 percent from the prior year. That is faster revenue growth than the server market overall, which only grew by 2 percent to hit $52.7 billion last year, according to Gartner.

The second biggest group of servers buyers are, predictably, in the communications sector: the telephone, cell phone, and cable companies who also extract large, regular sums from consumers and businesses for the services they provide. The communications sector accounted for $7.1 billion in sales in 2006, up 3.6 percent. The governments of the world, which of course tax us for their funds, ranked third among industries, with $6.1 billion in server purchases for 2006; government server spending fell by 4.1 percent last year--but you probably would not have guessed that by your tax bill. The rest of the industries--including manufacturers, retailers, and distributors, but not detailed any further by Gartner--accounted for $26.3 billion in sales, or just under half of the market.

IBM's revenue market share in the financial sector, by the way, is a bit higher at 44.6 percent than its overall share in the broader server market. Hewlett-Packard ranked number two in the financial sector in terms of server sales, with 26.7 percent of sales, followed by Sun Microsystems, with 9.2 percent of sales. About 35 percent of IBM's overall server sales in 2006 went into the financial sector, compared to 25 percent for HP and 21 percent for Sun.

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Shannon O'Donnell,
Mary Lou Roberts, Victor Rozek, Kevin Vandever, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
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