NZ buyers choosing PC servers ahead of clients

PC server shipments have significantly increased in the first quarter, according to most organisations spoken to by Computer-world. IDC is still working through the figures, but general manager Graham Penn says anecdotal evidence shows there has been a significant growth in the number of PC servers.

PC server shipments have significantly increased in the first quarter, according to most organisations spoken to by Computer-world.

IDC is still working through the figures, but general manager Graham Penn says anecdotal evidence shows there has been a significant growth in the number of PC servers being shipped in Q1. IDC estimated growth of about 20% to 30% in shipments in Q1 this year compared to Q1 last year. The growth rate has been high compared to PCs or desktops.

“People are buying servers, not clients” says Penn.

He says many businesses are putting servers into existing networks rather than building new networks from the ground up. They are being used as application servers, or to provide an Internet firewall, rather than running Windows NT or a Intra Netware operating system.

The PC market is flat in terms of annual shipments, says Penn. The clients people have already work well, but systems can be improved by putting in more servers.

While a move to Pentiums will happen eventually, there is no wholesale movement yet. Penn says the big year for clients was 1994 and the three-year replacement cycle is just about up.

“Ultimately people will need to migrate, but they might delay it 12 months.”

Digital spokesman Hugh Scott says Digital has seen a “significant surge” in the PC server business, particularly in the past eight weeks. The growth matched what Digital had been forecasting. The servers were being used for the NT market, exchanges and Internet/Intranet use.

“The growth in units is more than 40% for the year-to-date versus this time last year. Obviously we can’t discuss revenue, but the growth has been significant, which we’re very pleased with.”

IBM PC server specialist Brendan Paget also says there has been a significant increase. “What we did in the first quarter, we did in the whole of the last year.”

He says a lot of people are doing upgrades, installing Windows NT and Lotus Notes. He says about 30% or 40% of the servers were for upgrades to existing systems and more than 50% would be for new business areas, which require new systems.

Companies which have been using servers for some time are now in the upgrade cycle, and new and smaller companies are just beginning to expand into it. Paget thinks growth will continue through the rest of the year at a steady rate.

He agrees the market is fairly flat from a PC perspective, but says that in about a year there will be more movement as companies upgrade.

Paget says there has also been a good demand for other server products such as AS/400 and RS/6000.

“We’ve sold more mainframe power over the past 12 months than we ever have. People are saying mainframe is dead and all the rest of it, but it’s not true.”

The Internet has fuelled much of the growth. Paget says companies want to get the business benefits from the Web.

“It’s estimated that in three to five years, actual business on the Internet will be about $US300 billion. That’s a very, very big business.”

Hewlett-Packard PC marketing mana-ger Joanna Burgess also reported an increase. She says HP experienced growth of more than 60% in the first quarter compared to the fourth quarter. She says HP had a “disastrous” first quarter for servers last year. The increase in the first quarter of this year compared to last year’s, is 280%.

She says one of the reasons for the increase is that HP had been trying to increase its share in the small and medium sized server market, which it had never been involved with before.

“But I don’t think it was just us. I think there was a strong market for servers in Q1.”

She also says the growth was not just in the small to medium sized business market, but right across the server line, including enterprise servers, the medium range and the low end.

Burgess says it’s difficult to say why there has been an increase. “We have a growth in corporate customers saying they need servers. Why did it happen in Q1? Maybe the economy’s growing.”

She says HP is predicting a strong demand to continue throughout the year.

Dell Computer’s server expert Peter Woolston says there has been huge growth in the number of servers shipped in the first quarter over the fourth.

Dell only got involved in the server market in New Zealand last September, and had expected the growth in the first quarter. He believes price performance was a factor in the growth.

He says Dell’s product is being used for a variety of functions — as workgroup, Web, application and database servers.

Compaq marketing director Tony Lambert says that although PC server sales are going very well, Compaq did not experience a big boom in the first quarter and that traditionally, the first quarter tended to be a quiet time for the company.

“It is growing, but overall the whole market is fairly quiet at the moment.” He says the growth is coming from many areas including the high-end market.

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