Ibexx & Intel Investors - Intel-Based Server Shipments in Q3 were estimated to be 551,000 with Compaq in the lead but Dell gaining fast.
The number 551,000 - the Q3 server volume - corresponds to a 2.2 million annualized rate.
Assuming a 20% growth rate for next year, 2.64 million servers may ship in 1999.
Assuming that these contain on average 1.75 Intel CPUs and that the average price for the CPU is $850 (High speed Pentium II, Xeons with .5 to 2 Meg L2 cache, etc., plus Cascades in late 1999), Intel's 1999 revenue from Server CPUs could be 3.9 Billion Dollars - about 12.5% of 1999 estimated Revenues (based on Montgomery Securities 31.36 Billion 1999 Estimated Revenues).
Toss in chip sets, LAN adapters, Flash Bios, etc., and Intel could have perhaps 15% of their 1999 revenue derived from Server components.
Note that different assumptions will produce different estimates.
Paul
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news.com
HP, Dell grab more of server market
By Stephen Shankland
Staff Writer, CNET News.com
December 3, 1998, 1:15 p.m. PT
Hewlett-Packard has passed IBM in lower-cost server sales worldwide, but Compaq still ships more than the two other companies combined, a study released today said.
Compaq had a worldwide market share of 32 percent for Intel-based servers costing up to $25,000 in the third quarter of 1998, the study by International Data Corporation said. However, Compaq slipped 3.6 percent from a year ago, and second-place HP and
fourth-place Dell Computers stole away some of those sales.
HP jumped into second place, increasing its market share from 12.3 percent a year ago to 15.2 percent in 1998. At the same time, IBM slipped to third place, its market share dropping from 13.1 percent in 1997 to 12.9 percent this year.
And just as happened with desktop computer sales in recent years, Dell is nipping at the heels of the more traditional big players. Dell's worldwide market share increased from 7.9 percent a year ago to 11.5 percent in 1998.
In the U.S., where customers are more comfortable buying servers directly from manufacturers, Dell's market share gain was even stronger, leaping from 13.4 percent in 1997 to 19.7 percent in 1998, said IDC analyst Amir Ahari.
The low-range server market is dominated by the top four companies, who together have more than 70 percent of the market, Ahari said. "It's making it harder and harder for the second tier to get a break," he said.
The IDC study tracks "PC servers," low-end servers that use chips from Intel. However, the servers can use any operating system, Ahari said. Preliminary figures indicate that Microsoft's Windows NT and Novell's Netware operating systems dominate, with Unix
systems such as Santa Cruz operation's UnixWare and Sun Microsystems' Solaris holding only 8 percent of the market share.
Worldwide sales of low-ranges servers in the third quarter of 1998 jumped 22 percent from the same time in 1997, but server manufacturers didn't see much financial benefit from the sales surge, Ahari said. "Many companies did not do well," he said.
Worldwide, 551,000 PC servers were shipped in the third quarter. But companies didn't profit much because a lot of those sales were of old and outdated models, such as servers using Intel's Pentium Pro chip.
Now, though, server vendors have supply problems with new models using the Pentium Pro's successor, Intel's Pentium II Xeon chip.
"The Xeon is still facing supply issues," Ahari said. More often than not, systems ordered with two or four Xeon processors ship with just one, leaving customers waiting for the extra slots to be filled later, he said.
Server manufacturers were stung by selling too many servers earlier this year into the sales channel, the network of dealers who often sell hardware to the actual customers, Ahari said. As a result, there was a lot of older inventory
from the last six or nine months that had to be cleared out.
So how did server companies unload their older wares? "Most of the very low-end, outdated products saw their way to Europe," Ahari said. "It seems many companies are seeing Europe as a dumping ground."
Ahari said it was interesting that demand in Japan was
surprisingly strong, increasing 14 percent since the third
quarter of 1997 despite Asia's financial problems. "It leads
me to believe that folks in the entire region see this
segment as strategic. It does not get impacted by any
budget cuts," Ahari said.
Direct sellers such as Dell, Gateway, and Micron, though,
don't have to worry about problems with too many or not
enough products in the distribution channel.
Direct sales continued to make inroads in the United States server market, now
accounting for 25.9 percent of PC server sales. In the U.S., Dell is in second place for
PC servers with 19.7 percent, Gateway is in fifth place with 4.3 percent, and Micron is in
sixth place with 1.8 percent.
"It goes right in the face of folks a couple years ago who said direct sales will never be 5
percent," Ahari said. |
