A new report from market researchers at IDC says that unit shipments of Windows servers were up 21.7 percent in the most recent quarter compared with the previous year, thanks to the Windows Server 2003 release. Likewise, the Windows server market grew almost 12 percent, year over year, IDC says. The figures are based on hardware sales, and IDC noted that the report doesn't track Microsoft's earnings from Windows 2003 licenses.
"Windows is prevalent in \[the small- and midsized business\] market, so it's getting a piece of the wave," Mark Melenovsky, research director of Global Enterprise Server Solutions at IDC, said. The report notes that a large portion of Windows 2003 sales have taken place in enterprises that are starting to replace aging Windows NT 4.0-based servers and in small- and midsized businesses, which tend to spend more aggressively than the wider IT market. Presumably, Microsoft can expect a similar wave of migrations when the company releases Microsoft Windows Small Business Server (SBS) 2003 next month; SBS 2003 bundles Windows 2003 with popular Microsoft email, database, and collaboration software and is targeted at small businesses that have less than 75 PCs.
Interestingly, revenues from Windows-based server hardware dropped 6.2 percent from the same quarter a year ago, but IDC attributes that decline to a steep drop in low-end server pricing. With first-tier companies such as Dell and HP offering starter servers for less than $400 in some cases, revenues have dropped despite the fact that these companies are selling more boxes. IDC says that IBM retained the top spot in the Windows-based server market, revenue-wise, with $3.2 million in sales for the quarter and 30.4 percent of the market. HP was number two with $2.9 million--27.7 percent of the market.