Unit shipment growth was flat (0.0% growth) year over year in 4Q06, the tenth consecutive quarter of slowing overall shipment growth. This trend reflects moderating unit growth, particularly in the x86 market segment, as server virtualizations adoption broadens across the globe.
After two consecutive quarters of single-digit revenue growth, Linux server revenue growth accelerated once again, growing 15.3% to $1.8 billion when compared with 4Q05. Linux servers now represent 11.9% of all server revenue, up more than 1 point over 4Q05. However, after eighteen quarters of double digit shipment growth, Linux server shipments declined 0.8% year over year as IT consolidation extends its reach into the open source domain.
Microsoft Windows servers showed positive growth as revenues grew 9.4% and unit shipments grew 5.1% year over year. Significantly, quarterly revenue of $5.3 billion for Windows servers represented 34.9% of overall quarterly factory revenue, the single largest revenue segment in the server market.
Unix servers experienced 2.8% revenue growth year over year when compared with 4Q06. Worldwide Unix revenues were $5.1 billion for the quarter, representing 33.5% of quarterly server spending and reflecting continued IT investment in this server market segment, with particular strength in the high-end enterprise segment of the Unix market.
Z/OS experienced its third consecutive quarter of positive revenue growth growing 5% year-over-year in 4Q06 to $1.7 billion. This is the highest quarterly revenue for IBM's System z in 8 years. Z/OS accounted for 11.2% of all server revenue in Q406.
EPIC or Itanium-based systems grew 71.5% year over year, generating more than $1.1 billion in revenue for the quarter the first time the platform has exceeded $1B in revenue in a quarter. In the x86 market segment, AMD's Opteron processor accounted for 20% of all worldwide x86 server revenue for the third consecutive quarter.
"IBM's solid System z revenue growth comes as a result of a significant amount of turnover in the installed base as customers look to take advantage of the performance and reduced cost structures available in both the System z EC (Enterprise Class), and the System z BC (Business Class) machines, which were introduced in late 2005 and mid-2006 respectively," said Steve Josselyn, research director, IDC's Enterprise Computing group. "This is an indication that many customers still view investment in System z as an integral component of their IT infrastructure."