Unix server sales sink as uncertainty grips market

Economic downturn has affected Unix market

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

The latest market share server numbers from IDC indicate users have put off purchasing new Unix systems in recent months, cutting its share of overall server spending. This comined with uncertainty over the plans of server manufacturers such as Sun and Hewlett-Packard, has affected the Unix market, IDC says.

The IDC report shows worldwide Unix revenues of $2.3 billion, or just over 22 percent 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-range to high-end systems, 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 78 percent 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 percent.

By comparison, Linux accounted for 61 percent share of the Top 500 list in 2005, while the highest ranked Unix system was Hewlett-Packard's HP-UX at nearly 15 percent.

Despite these 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 says, 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 moves to fully absorb Sun Microsystems.

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

"It is not just one thing, it is multiple things," says Bozman, of the Unix server sales drop.

Bozman says 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 percent year-over-year to $10.4 billion in the first quarter.

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

"It is really going to take a while to see what the shape of that will really be." Charles King, an analyst at Pund-IT in Hayward, California, 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] 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," King says.

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