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Windows server revenue outpaced Linux in Q4

Perfect storm plays out

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Servers definitely do Windows

In terms of operating systems, Windows was the big winner in the fourth quarter, and not just because there are some very powerful X64 machines on the market but because Windows Server 2008 R2 was out the door last July and helping to drive upgrades to Microsoft's latest Windows server OS from prior releases.

IDC says that across all architectures (including a smattering of Windows on Itanium), global Windows server revenues in the fourth quarter of 2009 were up by 13.7 per cent to $5.4bn, with shipments only rising 5.5 per cent.

Yes, Virginia, there was a Santa Claus, and he had server virtualization in his bag in the quarter, driving up average selling prices as companies consolidated Windows boxen. Windows accounted for 41.6 percent of all server revenues in the quarter, and this was the highest revenue level for Windows in two years, according to IDC

Unix server sales, by stark contrast, dropped by 18.1 per cent in the quarter to $3.9bn, and not just because Oracle's takeover of Sun Microsystems was stalled, causing customer confusion. Unix systems lost more than six points of share of the server pie in the quarter, and that was due to the impending announcements of IBM's Power7 and Intel's Itanium 9300 processors as much as to the Oracle/Sun drama.

If you consider Linux a kind of Unix (and I do), then you could add in another $1.9bn to the open systems/open source camp. But Linux server revenues only rose by 6.1 per cent in Q4 2009, much less than would be needed to make up the hole in Unix sales. The Uni-lin-ux collective had $5.8bn in sales, still more than Windows. But one is growing and one is shrinking.

IDC says that X64 servers accounted for 96 per cent of shipments and 55 per cent of revenues for all of 2009. And in the fourth quarter, X64 server sales rose a bit higher, capturing 57 per cent of the pie.

"Because the fourth quarter is typically the strongest quarter for high-end non-x86 systems, this represents a significant shift in trends for the market, as non-x86 servers have never held less than 50 per cent of revenue in the fourth quarter," explained Dan Harrington, a research analyst in the company's enterprise server group.

"IDC expects this trend to continue as users became more cost conscious than ever in 2010 and look to x86 servers for relief from capital and operational expenditures."

Blades mix it up

Blades were the darling of the server market, at least in terms of growth in 2009. But have fallen short of expectations set a decade ago when commercial blades first started shipping. Blades have not yet become the new rack and tower servers.

IDC believes that blade servers across all processor architectures accounted for $1.8bn in sales at the factory level, up 30.9 per cent. While blades only account for 13.9 per cent of worldwide shipments in Q4, in the X64 market, blades got 21.4 per cent of shipments.

For the year, blade servers accounted for $5.4bn in sales, about 12.5 per cent of total server sales. Hewlett-Packard is still the king of blade servers, with 54.2 percent of revenue share in Q4, compared to 28.4 per cent for IBM. That said, IBM had an impressive 64.1 per cent growth rate for blade sales in the quarter and seems bent on catching up with HP and passing it as it had done in the mid-2000s for a brief time.

Looking at the market by vendor, IDC says IBM still came out on top, and by a wider margin than Gartner's numbers for Q4 show. IDC says IBM's factory revenue for servers sold in the fourth quarter of 2009 came to $4.59bn (down 6.5 per cent), followed by HP at $3.95bn (up eight-tenths of a per cent). Dell came in number three, with $1.49bn (up 4.5 per cent), followed by Sun's $1.03bn (down 17.3 per cent) and Fujitsu's $595m (up 7.2 per cent). Other vendors had $1.3bn in sales in the quarter, down 8.9 per cent. ®

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