Gartner's Dataquest Says Worldwide Server and Workstation Markets Experience Double-Digit Growth in Second Quarter 2000

SAN JOSE, Calif., Aug. 2, 2000 -- The worldwide server and workstation industries posted double-digit growth rates in the second quarter of 2000, with increases of 11 percent and 14 percent, respectively, according to preliminary statistics by Dataquest Inc., a unit of Gartner Group, Inc. (NYSE: IT and ITB). Worldwide server shipments reached 955,412 units in the second quarter, and workstation shipments totaled 440,463 units.

While the server market experienced double-digit growth, it is below the projected growth of 21 percent for 2000. The market did show a stronger increase than in the first quarter, and Dataquest analysts said this indicates some acceleration in the market because of the recovery from year 2000 issues. The market is also receiving a boost by strong sales in low-end servers (systems less than $25,000).

"The server industry's growth in the second quarter was primarily fueled by e-business, which created a strong demand for front-end Web servers. These servers are on the lower end of the price scale," said Jeffrey Hewitt, principal analyst for Dataquest's Servers Worldwide program.

Sun Microsystems and Dell showed the best growth among the top-tier vendors in the second quarter (see Table 1). Both companies attribute their robust growth to their success in the low-end server market.

Table 1
Preliminary Worldwide Server Unit Shipment Estimates for 2Q00
(Units)
Company          2Q00          2Q00 Market  2Q99          2Q99 Market  Growth
                        Shipments  Share (%)      Shipments  Share (%)        (%)
Compaq            280,385      29.3               243,212      28.3               15.3
Dell                  135,000       14.1                99,152      11.5               36.2
IBM                  131,151       13.7              157,797      18.3              -16.9
HP                   113,832       11.9              106,177      12.3                 7.2
Sun                   75,000         7.9               43,995         5.1               70.5
Others              220,044       23.0              210,027      24.4                 4.8
Total Market      955,412     100.0              860,360    100.0               11.0

Source: Dataquest (August 2000)

Driven by the sales of entry-level workstations, second quarter workstation shipments were ahead of the year-end growth projection of 8.5 percent. Dataquest analysts said the second quarter increase is the result of the "bleeding" in of sales to the PC market, and thus it represents a somewhat artificial workstation growth rate.

"Differentiation of high-end PCs and entry-level workstations is getting increasingly blurred," said Pia Rieppo, principal analyst for Dataquest's Workstations Worldwide program. "Many of the entry-level workstations being shipped in the second quarter this year are getting sold for PC uses as opposed for traditional workstation uses in design and analysis by technical and creative professionals."

Strong sales in entry-level workstations helped Dell move past Sun Microsystems and Hewlett-Packard to become the No. 1 vendor in terms of workstation units shipped, as it accounted for 23 percent of shipments in the second quarter of 2000 (see Table 2).

Table 2
Preliminary Worldwide Workstation Unit Shipment Estimates for 2Q00
(Units)
Company       2Q00           2Q00 Market  2Q99          2Q99 Market   Growth
                     Shipments   Share (%)      Shipments  Share (%)        (%)
Dell               100,000        22.7              56,585         14.7               76.7
HP                  90,275       20.5               81,197        21.0                11.2
Sun                 85,000       19.3               88,327        22.9                -3.8
Compaq           64,000       14.5               52,350        13.6               22.3
IBM                 40,250         9.1               60,468        15.7              -33.4
Others             60,938       13.8               46,993        12.2               29.7
Total Market   440,463     100.0              385,920      100.0               14.1

Source: Dataquest (August 2000)

These results are preliminary at this time. Final statistics will be available soon to clients of Dataquest's Servers Quarterly Statistics program and Dataquest's Workstations Quarterly Statistics Worldwide program. These programs offer a comprehensive, global market information service that analyzes and documents the server and workstation industries.

To subscribe to these programs, please call 800-419-DATA, or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports and full text of press releases can be found on the Internet at http://www.dataquest.com.

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