Volume 16, Number 22 -- June 4, 2007

The Market for Servers in Europe Is Hot

Published: June 4, 2007

by Timothy Prickett Morgan

Last week, the box counters at IDC and Gartner provided their quarterly estimates of global server sales by server type, operating system, and vendor. But IDC also went the extra mile and provided some insight into server sales in Europe, the Middle East, and Africa. In what must seem like something of a dream for server makers, Europe is going strong right now.

According to IDC, sales of server across all architectures rose by 11 percent in the first quarter of 2007 to nearly $4.3 billion, and the number of server units sold increased by 8 percent to 600,000 machines. In recent years, shipment growth has outpaced revenue growth, but the advent of multicore machines and sophisticated virtualization technologies are convincing some customers to buy beefier machines and then virtualize them. By going virtual, they can triple or even quadruple the utilization of the processors inside a server, but it takes a beefier server to do the trick because virtualization requires memory and I/O bandwidth and in some cases requires newer processors that have hardware features that help make virtualization hypervisors run better.

IDC says that in Western Europe in particular, virtualization is becoming normal and is one of the largest drivers of server sales in the short term. But there are other forces at work, too, to prop up the EMEA server market, which is growing faster than the worldwide market. IDC reckons that in the first quarter of 2007, companies bought $12.4 billion in new server iron, up 4.9 percent, but server shipments worldwide grew at only 4.6 percent. With EMEA being roughly a third of the market and growing revenue at more than twice the global rate and shipments nearly twice as fast as the entire world, this would seem to imply that some areas are not, in fact, doing too well when it comes to server sales.

"Server revenue continued to be driven by consolidation efforts, SMB sales, blades, and large infrastructure projects," said Beatriz Valle, research analyst with IDC's European enterprise servers group, which put together the EMEA figures for Q1. "Sales of more richly configured servers resulted in rising average sales values for the second consecutive quarter. In forthcoming quarters, we will see wider adoption of quad core processors, impacting prices and also the level of shipments."

Revenue growth in Central and Eastern Europe came in at 12 percent in the first quarter of 2007, and was driven by healthy IT spending by governments and corporations in the region. Spending in this region was brisk for X64 servers in general and for blade servers in particular, which grew by 49 percent compared to the first quarter of 2006. However, spending on RISC/Unix servers fell in this geographic area.

Across the EMEA region, Linux is still being adopted at an increasing rate, with sales of Linux-based servers rising by 42 percent in the first quarter; on a global basis, Linux server sales grew by only 10 percent in the same time period. Western Europe consumed the most Linux iron it has ever eaten to date in the first quarter of 2007, according to IDC. This is reminiscent of the uptake of Unix in the late 1980s and early 1990s, when European companies struggling with stagnant economies turned to cheaper Unix iron to do more with their limited IT budgets and away from proprietary minicomputer and mainframe technologies--well ahead of North America or Japan. Sales of Unix platforms were flat across all of EMEA--up in Central and Eastern Europe but down in Western Europe--according to IDC, with Windows boxes seeing sales rise by 13 percent even though Windows 2008 is looming on the horizon.

In terms of architecture, sales of X86 and X64 iron broke through the $2 billion mark in the first quarter, and sales of Itanium-based servers rose by 54 percent--albeit, from a relatively small base in the year ago quarter. Sales of Opteron-based servers nearly hit $300 million in EMEA in the quarter, giving Advanced Micro Devices about 15 percent revenue share of the X86-X64 server space in the region.

As it did on a global basis, Hewlett-Packard was able to maintain its top revenue share in the EMEA server space in the first quarter of this year over rival IBM, which also played second fiddle to HP a year ago. HP booked $1.46 billion in server sales in EMEA in Q1, up 15 percent, while IBM had sales of $1.34 billion, up 13 percent. Sun Microsystems, buoyed by its new Opteron-based servers, grew sales by 13 percent as well in EMEA, posting $463 million in sales for the quarter. Dell grew slower than the market at large with an 8 percent increase in sales, to $354 million, followed by the Fujitsu-Siemens partnership, with a meager 2 percent growth in the quarter, to $348 million in sales. All of the other vendors selling servers into the EMEA market in aggregate had a 4 percent decline, to $292 million in sales.


Virtualization, Consolidation Drive Server Sales in Q1

Server Sales Up a Bit in 2006, But Q4 Looks a Bit Weak

Server Sales Perk Up a Little Bit in the Third Quarter

The Server Market Struggles for Growth in Q2, Says IDC

Server Sales Decline for the Second Straight Quarter

The Server Market Begins to Cool in Q4

                     Post this story to
               Post this story to Digg
    Post this story to Slashdot

Sponsored By

How do you know your AS/400 Backups are Secure?

· AES Encryption for Secure Backups
· Uses SAVLIB and SAVOBJ for easy implementation
· Meets compliance requirements
· No changes to your system
· Runs on network attached PC

Your offsite backups are secure no matter who has them, since they are fully encrypted.

Don't be the next embarrassing news story.
Secure your iSeries backups with LaserVault Backup -

Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Brian Kelly, 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
Go to our contacts page and send us a message.

Sponsored Links

New Generation Software:  Leading provider of iSeries BI and financial management software
COMMON:  Join us at the Annual 2008 conference, March 30 - April 3, in Nashville, Tennessee
LASERTEC USA:  Fully integrate MICR check printing with your existing application


IT Jungle Store Top Book Picks

The System i Pocket RPG & RPG IV Guide: List Price, $69.95
The iSeries Pocket Database Guide: List Price, $59.00
The iSeries Pocket Developers' Guide: List Price, $59.00
The iSeries Pocket SQL Guide: List Price, $59.00
The iSeries Pocket Query Guide: List Price, $49.00
The iSeries Pocket WebFacing Primer: List Price, $39.00
Migrating to WebSphere Express for iSeries: List Price, $49.00
iSeries Express Web Implementer's Guide: List Price, $59.00
Getting Started with WebSphere Development Studio for iSeries: List Price, $79.95
Getting Started With WebSphere Development Studio Client for iSeries: List Price, $89.00
Getting Started with WebSphere Express for iSeries: List Price, $49.00
WebFacing Application Design and Development Guide: List Price, $55.00
Can the AS/400 Survive IBM?: List Price, $49.00
The All-Everything Machine: List Price, $29.95
Chip Wars: List Price, $29.95


The Linux Beacon
Virtualization, Consolidation Drive Server Sales in Q1

Novell's First Quarter Goes into the Red

InfiniBand Finds Its Place in the Data Center

The X Factor: Small Is Beautiful

Four Hundred Stuff
ICS Finds the Sophisticated Side of PHP

LANSA Supports New 1SYNC Product Data Standard

Infor Unveils ERP LX Feature Pack 2

Stampede Launches 'Virtual Pipelining' for Browsers

Big Iron
Virtualization, Consolidation Drive Server Sales in Q1

Top Mainframe Stories From Around the Web

Chats, Webinars, Seminars, Shows, and Other Happenings

Four Hundred Guru
Send a Spool File from AS/400 with a Specific Subject Line and Message Body

Searching for Wildcard Characters

Admin Alert: i5 IPL Pre-Planning and Post-Planning Checklists

System i PTF Guide
May 19, 2007: Volume 9, Number 20

May 12, 2007: Volume 9, Number 19

May 5, 2007: Volume 9, Number 18

April 28, 2007: Volume 9, Number 17

April 21, 2007: Volume 9, Number 16

April 14, 2007: Volume 9, Number 15

April 7, 2007: Volume 9, Number 14

The Windows Observer
All Your IT Dollars Are Belong to Microsoft

Microsoft-Novell Deal Has Escape Clause

Virtualization, Consolidation Drive Server Sales in Q1

As I See It: Operating on Overload

The Unix Guardian
The Persistence of Unix

HP Pursues Telcos with New Entry NonStop Server

The Market for Servers in Europe Is Hot

As I See It: Operating on Overload

Four Hundred Monitor
Four Hundred Monitor's
Full iSeries Events Calendar


Vision Solutions
ARCAD Software
Affirmative Computer

IBM's Rumored System i Power6 Server Plans

IBM Tries Online Discounts to Move Server, Storage Gear

The Market for Servers in Europe Is Hot

Mad Dog 21/21: Missing Inaction

But Wait, There's More:

TMW Systems Acquires Fleet Management Software Rival TMT Software . . . Top Tech Firms Score Big in AMR Supply Chain Rankings . . . VAI-VeriFone Partnership to Deliver Retail Application Integration . . . Infor Opens Center of Excellence for System i Customers . . . Is Egypt The Next Offshoring Giant? . . . DataMirror's Shows Continued Growth in the First Quarter . . .

The Four Hundred


Subscription Information:
You can unsubscribe, change your email address, or sign up for any of IT Jungle's free e-newsletters through our Web site at

Copyright © 1996-2008 Guild Companies, Inc. All Rights Reserved.
Guild Companies, Inc., 50 Park Terrace East, Suite 8F, New York, NY 10034

Privacy Statement