Asian Crisis Thwarts Overall Growth For the
High-End Server Market in 1998 But Some
Vendors Shine, According to IDC
Sun and Amdahl More Than Double Revenues
Framingham, MA, January 18, 1999 - In a recently published High-End Server Year-In-Review bulletin,
International Data Corporation (IDC) estimates that in 1998 High-End Server factory revenues declined
8.3% over 1997. This significant drop brings the High-End Server market to a total value of $16.3 billion in
revenue in 1998. Steve Josselyn, Research Director for IDC's Commercial Systems and Servers group,
says, "Reductions in large capital expenditures in the Japanese market contributed heavily to the overall
revenue decline. There is also an additional two point negative effect to the bottom line market total because
of the yen to U.S. dollar conversion for Japanese vendors."
Despite the gloom of the Asian crisis, IDC expects IBM, Sun, Amdahl and Compaq to all show revenue
growth with increased market share in 1998. Steve Josselyn adds, "Competition in the High-End Server
market intensified as Unix system vendors demonstrated the ability to sell machines that meet customer
requirements for application deployment. The increased competition is evident in the success shown by Sun
and Hewlett-Packard selling large configuration Unix machines."
Key Data
IBM increased revenues dramatically, growing at an annual rate of 17% to reach $6 billion in revenue
in 1998. Gaining more than 7 points of share over last year, IBM has 37.2% share of the High-End
Server market in 1998.
Sun posted aggressive growth this year in the High-End Server market by more than doubling its
revenues from last year to $907 million in 1998, a 108% annual growth rate. Sun also gained over
three points of share to earn 5.6% of overall market share in 1998.
Amdahl made a tremendous comeback with the Millennium 700 series systems and increased its
revenues by 135% to reach $715 million in 1998. Amdahl's share rose to 4.4%, due in part to its
relationship as a reseller for the Sun E10000.
Hitachi vendors (Hitachi Data Systems, Comparex, and Olivetti) hit a wall with Skyline sales in 1998,
losing 37.7% of revenues from 1997 to plummet to $1.1 billion in revenue in 1998. Combined vendor
market share dropped from 10% in 1997 to 7% in 1998.
Due to economic conditions in Japan and currency effects, Fujitsu's revenues declined precipitously to
$1.4 billion in 1998, representing a 43% drop over 1997. Fujitsu has a 1998 share of 8.6%.
Likewise NEC's revenues took a dive, decreasing 38% over 1997 to level off at $1.1 billion.
Economic turmoil in Japan forced NEC's share down to 6.7%.
IDC expects that system performance will continue to rank heavily in importance going forward. IDC
believes that Hitachi will take the performance lead with the next generation Skyline systems, which are slated
to be shipped in volume in 1Q99. However, all High-End Server vendors will be challenged to maintain
easily integrated hardware, software, software development, and services that are in line with the changing
demands placed on future computing resources, including the exigencies of the Internet.
For more information or to purchase this report (#B18121), 1998 High-End Server Year in Review:
Japanese Vendors Hit Hardest by Asian Crisis, call Cheryl Toffel at 1-800-343-4952, ext. 4389. IDC's
Web site (http://www.idc.com) contains additional company information, recent news releases, and offers
full-text searching of the latest available research.
idc.com |
