As the global market for Internet server software continues to boom, major vendors are struggling to find a strategy for gaining a piece of the market, according to industry researcher International Data (IDC).
“Oracle is in the same category as Sun and IBM,” says Ted Julian, research manager of IDC’s Internet programme. “After Internet-enabling their legacy products, they are now trying to find out how they will move ahead.”
Netscape is currently driving the standards and shaping the landscape in the Web server software market. But in the long run, as more integrated packages become available, offering more functionality going beyond pure transport and infrastructure services, Netscape will feel more competitive pressure, Julian says.
In its new “Global Internet Server Software” study, IDC predicts that the Internet server market will grow from last year’s 637,000 units shipped to 1.2 million units by 2001, generating total revenues of $US802m. Much of the growth now is driven by software vendors building Internet functionality into existing products, including Microsoft with its Exchange, and Novell with its GroupWise messaging servers.
In 1996, hypertext transport protocol (HTTP) servers still dominated the market, accounting for 500,000 unit shipments and $US57 million in revenue. However, given the $US100 average unit price, the HTTP-only market is drying up as a revenue opportunity, says Julian. Rather than disappearing completely, this segment will evolve into content servers that offer much more functionality than HTTP alone can provide, IDC says.
Last year, HTTP was followed by messaging and collaborative servers, which accounted for revenue of $US50m and $US18m, respectively. About 65% of Web server software sold in 1996, ran on systems powered by the Unix operating systems, followed by Windows NT with 28% of servers, with the remaining 7% of servers running either OS/2, Macintosh or NetWare, according to IDC.
By 2001 the picture will turn in favour of Windows NT, which is expected to run 59% of all Web servers, with Unix operating on only 22% by then, Julian says. “The challenge for Windows NT, however, is going to be in the mission-critical, high-volume transaction market, which, although much smaller in terms of units, generates high revenue.”
Of the smaller operating system providers, Novell is the vendor to watch in the long run. “Novell has to be taken seriously. If it gets only a fraction of its installed base, that will be a huge number,” says Julian. IDC expects Novell’s NetWare to be on 16% of Web servers this year, up from 2% last year.