Worldwide Server Market Revenues Exceed $52 Billion in 2006

According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market grew 5.2% year over year to $15.2 billion in the fourth quarter of 2006, marking the third consecutive quarter of positive growth.

Worldwide server unit shipment growth was flat in 4Q06 when compared with the year-ago period. For the full year 2006, worldwide server revenue grew 2.0% to $52.3 billion, while worldwide unit shipments grew 5.9% to 7.5 million units. This represents the highest annual server revenue since the market peaked in 2000.

Although volume systems grew 2.1% year over year, the segment is no longer the catalyst for growth for the server market overall. In fact, 4Q06 was the first quarter in the 10 year history of IDC's Worldwide Quarterly Server Tracker that both midrange enterprise and high-end enterprise system revenue grew faster than volume system revenue.

After four consecutive quarterly decreases, revenue for midrange enterprise servers increased 5.4% year over year and the high-end enterprise server market showed an 11.5% increase year over year, the second consecutive quarter of increasing revenue for high-end enterprise servers.

"It is clear that both large and small organizations across the world are investing aggressively to simplify and virtualize their IT infrastructures," said Matthew Eastwood, program vice president of IDC's Worldwide Server Group. "For the first time in more than 10 years average selling values (ASVs) in the quarter increased year over year as IT managers move to consolidate IT workloads.

This shift towards a shared compute infrastructure is driving additional scalability, memory attachment, and I/O needs, which in turn, lead to higher ASVs. For technology suppliers, this inflection point represents an opportunity for the vendors best equipped to innovate their systems, software, and services offerings and meet these challenges."