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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."

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.