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And that probably explains why everyone's buying fewer PC servers

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The 1998 PC server market was driven not by hardware but by software, according to the latest data from market research company IDC. While the hardware side of the business slowed down considerably -- revenue growth hit just eight per cent, well down on 1997's 42 per cent and 1996's 50 per cent -- sales of server operating systems grew by 25.2 per cent, compared to 15.3 per cent in 1997. The two statistics may not be unrelated. Given the increased power of desktop PC hardware, it's not hard to imagine many server buyers running cheaper desktops as servers rather than selecting machines specially designed and configured for that role. That scenario is to some extent confirmed by the massive growth in shipments of Linux, which makes far lower demands on server hardware than the likes of Windows NT and NetWare. As IDC reported last December (see previous story), Linux shipments in 1998 grew by a massive 212.5 per cent to take 17.2 per cent of the market, up from 6.8 per cent in 1997. That figure only covers copies of Linux shipped through distributors like RedHat -- copies downloaded for free via the Web haven't been considered since, says IDC, there's no way of measuring them. How much higher that pushes Linux's marketshare is difficult to say, but the point is it will be some way above the IDC figure. Windows NT Server grew at 27.2 per cent, to take 36 per cent of the market. Novell NetWare grew 13.6 per cent (last year its share shrank some six per cent) and ended up with a market share of 24.1 per cent. The combined varieties of Unix (excluding Linux, though) took 17.4 per cent of the market, growing just 4.1 per cent in the process. In terms of revenue, Unix came out on top, followed by NT and NetWare, but given the relative pricing structures of each OS, this shouldn't surprise anyone. Linux brought in just $33 million worldwide, but that's still a healthy figure for the likes of RedHat, SuSE and co. On the hardware side, Compaq retained its market lead, though its share fell four per cent to 29 per cent, thanks to inventory problems and "distractions" from the Digital takeover, according to IDC. Hewlett-Packard also (just) retained its market position, hanging on to the number two slot with a 13 per cent share. Its revenue grew by 36 per cent, and impressive increase driven by improved product and marketing strategies. Still, it wasn't as impressive a performance as that demonstrated by Dell, which grew 76 per cent to match HP's 13 per cent market share. IBM was a single point behind, at 12 per cent. IDC predicts that the trend of diminishing growth experienced by the PC server market as a whole in 1998 will be reversed this year, thanks to a rebounding Japanese market, increased sales to small businesses and ISPs -- the market sectors both Dell and HP are targetting -- and the effect of Intel's server-oriented Xeon processor. The company also highlights what it calls "whitebox" servers, such as Corel's NetWinder and Cobalt's Qube, as drivers of growth. Given many such devices use Linux, they should boost the free OS' market share even further. ®

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