Unix server sales sink; IDC cites a perfect storm

Sharp drop in Unix server sales seen caused by recession, pending new products and Oracle-Sun merger

The Unix server business has been hit particularly hard during the current recession.

The latest market share server numbers from IDC, released Wednesday, show that users have put off purchasing new Unix systems in recent months, cutting its share of overall server spending to one of the lowest levels ever.

The IDC report, released Wednesday, shows worldwide Unix revenues of $US2.3 billion, or just over 22% of total spending on servers, during the first 2010 quarter. The Unix server share of server revenue is down 10.5 percentage points from the year ago quarter.

Unix servers are mid-to-high end system traditionally used to run mission critical systems, but their use has been gradually eroding as the capabilities of x86 servers increase. The Unix servers run several Unix variants, including Solaris, AIX and HP-UX.

The shift from such Unix variants is perhaps most dramatic in the supercomputing business.

The Top500 supercomputer list offers detailed statistics on processors, architecture and operating systems deployed in these systems. Late last year, Linux was the operating system of choice for just over 78% of the Top500 supercomputers, and even a bit higher when Red Hat and Suse-specific implementations are added. The highest ranked Unix system was IBM's AIX at 4.4%.

By comparison, Linux accounted for 61% share of the Top 500 list in 2005, while the highest ranked Unix system was Hewlett-Packard's HP-UX at nearly 15%. The latest supercomputing list will be out Monday.

Despite the latest numbers, it is important to note that Unix still accounts for a major share of server revenue, and remains an important part of the hardware mix.

Jean Bozman, an analyst at IDC who follows this market, cited a combination of factors in the sharp drop in Unix server sales in the first quarter.

First, she said, the recession delayed sales of Unix servers, which are typically replaced every five to seven years -- longer than most x86 systems. Unix server buyers may also be holding back as Oracle Corp. moves to fully absorb Sun Microsystems Inc. after its deal to buy the key Unix server vendor closed in January.

Further, Bozman noted that Unix server users may be waiting for product upgrades from Hewlett-Packard Co., which recently announced new products in its Integrity line, and IBM, which is due to release Unix servers later this year.

"It isn't just one thing, it is multiple things," said Bozman, of the Unix server sales drop.

Bozman said it is too early to say whether the first quarter results indicate that users are accelerating a shift away from Unix.

Overall, IDC said the worldwide server market increased by 4.6% year-over-year to $10.4 billion in the first quarter.

Gartner Inc., this week put the server growth at 6% for the quarter and the total market at $10.75 billion. Both firms cited the x86 systems as key to the growth.

"It's really going to take a while to see what the shape of that will really be." Charles King, an analyst at Pund-IT Inc. in Hayward, Calif., of the broader Unix trend.

Oracle may be "the biggest question mark, although the company has thrown its weight behind Sun's UltraSparc Unix systems. [Oracle] said that it will continue development, but it is going to take a while for us to really see what the shape of that is going to be," said King.

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Patrick Thibodeau

Computerworld (US)
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