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IDC: Change in the x86 server market

IDC: Change in the x86 server market

Shipments of servers powered by x86 processors will not grow as fast as previously forecasted, but x86 will remain the dominant chip design, IDC says in a recent report.

The market researcher has scaled back unit growth forecasts for x86-based servers, citing the market transition to multicore processors and demand for virtualisation. Both technologies give servers more computing power, thereby reducing demand for new servers.

IDC forecasts that worldwide unit demand for x86 servers will grow by just 39 percent between 2006 and 2010, down from an earlier forecast of 61 percent. This means that IDC has trimmed 4.5 million unit shipments and US$2.4 billion in revenue from its forecast for 2006 to 2010.

But by no means is the x86 fading away. It is expected to actually grow its unit market share to 94 percent in 2011 from 93 percent in 2006.

Alternatives to the x86, such as the EPIC (explicitly parallel instruction computing) architecture in Itanium processors from Intel and Hewlett-Packard, RISC (reduced instruction set computer) architecture in Sun Microsystems' Sparc and IBM's Power processors and the CISC (complex instruction set computer) architecture in mainframe computers, will remain also-rans to the dominant x86.

Based on revenue, the x86 enjoyed 50 percent market share in 2006, Bailey says. By 2011, x86 will grow its revenue market share to 56 percent.

Virtualisation is technology that allows a server to run multiple operating systems and software applications simultaneously. So a business can run on one server, programs it previously would run on, say, four servers. Virtualisation aids in the consolidation of server deployments by an average ratio of 5:1, says Bailey. And as chip makers develop dual-core or quad-core processors, customers can get even more work out of fewer servers.

"The intersection of the two is what's really having the impact on the market," she says.

The two top server vendors are confident they'll succeed in this shifting market.

HP has seen the market shift that IDC identifies over the last four to five months, but "what we're finding is that our volumes are not declining," says Rich Palmer, director of technology strategy for industry standard servers at HP.

IBM held a 38 percent share of the worldwide server market based on revenue in the fourth quarter of 2006, according to IDC, compared to HP's 27 percent. Most of that was from the sale of x86 servers. HP's revenue grew 5.1 percent and IBM's 3.8 percent, during the quarter from the year ago quarter.


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