By Timothy Prickett Morgan
Everybody is entitled to IDC's opinion, and the company is once again making waves by drawing comparisons and making predictions about the Unix and Windows NT server markets. A few months ago, analysts at market researcher International Data Corp tried to take some of the wind out of Microsoft's sails by pointing out to the world that although NT servers are certainly popular, they are not displacing existing application platforms at the world's companies. NT servers, by and large, are used for print, file and web serving, not to support applications like OS/390, OS/400, VMS or Unix. That doesn't mean that NT and its follow-on, Windows 2000, won't be generating revenues for the companies that peddle NT-based workstations and servers in lieu of Unix or alternative proprietary products.
According to a new study undertaken by IDC that reviews and previews the server market from 1998 to 2003, Unix still commands the dominant market share of server revenues, and will continue to do so until 2003. But NT servers will more than double their market share and get within spitting distance of the Unix market. So many things can happen between now and 2003 that it is even conceivable that NT server revenues could match Unix server revenues. NT shipments will surely outstrip Unix shipments by an order of magnitude, as is the case today, however.
NT's phenomenal projected growth rate will put pressure on every aspect of the server market, says Vernon Turner, vice president of IDC's server research. Don't be surprised to see irrational behavior from both customers and vendors, who will be feeling NT's momentum and Unix's response. In addition, if you throw in the emerging trends of appliance servers, information utilities, continued market and technology consolidation, and new vendor- based business models, the server landscape in 2003 may be unrecognizable.
IDC says that it expects the worldwide server market to grow from $65bn in 1998 to $89bn by 2003. If you do the math, that's nearly $500bn in total for server expenditures worldwide, a truly huge amount of money to fight over. And fight over it vendors will. They will use every trick in the book to get businesses to buy, most prominently convincing them that they have to modernize their equipment to participate in the e-business marketplace. IDC also expects the modest 6% in annual server revenue growth to be driven by an increased emphasis on small and medium enterprises and the development and acceptance by industries of information utilities like those Sun Microsystems is trying to establish with its Starfire enterprise servers and software partners. Getting rid of aging servers, unable to run modern applications written in Java and other object oriented languages as well as server consolidation will also drive continued and expanding server sales.
The good news for Unix users and enthusiasts is that Unix will, at least as far as IDC can see, maintain its dominant position in the server market. IDC expects that Unix servers will account for $37bn in sales in 2003, or about 41% of the total market. This will still handily whip NT's share, which is expected to grow at a 25% compound annual growth rate to $26.9bn in total server sales by 2003. Last year, NT servers accounted for just under $9bn in sales worldwide, or about 13.8% of the server market. Other server environments such as Linux, OS/400 and OS/390 will collectively have a share as big as NT by 2003. IDC isn't saying how much of that number will be Linux, and that is probably the case because four years is a long time in the computer business and it is very hard to see how much Linux will bite into proprietary, Unix and NT platforms. By not copping to a Linux number publicly, IDC is hedging its bets, even though Linux rightfully belongs in the Unix classification. The point is that the Unix plus Linux combo looks to be the dominant platform for the foreseeable future, even with all the marketing coming out of Redmond.
However, everyone, including analysts at IDC, are in agreement that there will be even more consolidation in the Unix market. Exactly which Unixes will live and which will go the way of all flesh remains to be seen. This time last year, just about everyone would have said HP-UX and Solaris would dominate, perhaps alongside Linux, but these days AIX-Monterey/64 looks like a better long-term bet than HP-UX. And while Tru64 is surely an asset at Compaq that the company has undersold, it is one of the more vulnerable implementations of Unix because of its relatively small market share. IDC says that despite all the hoopla surrounding Linux, it believes that Linux will be purchased predominantly by home PC and workstation users rather than corporate server buyers. In this, IDC will probably be proven wrong.
On the workstation side of the Unix-NT conflict, IDC reckons that Intel-based Windows NT workstations have been outshipping Unix workstations since last year. IDC expects that NT workstation shipments will grow at a compound annual rate of about 20% per year between now and 2003, while the Unix workstation shipments will decline by 9% to 10% per year over the same time period. The increase in NT shipments will be driven primarily by aggressive marketing by Dell, Hewlett-Packard and IBM, who quite frankly have a lot less to lose in the Unix workstation market by pushing Wintel workstations than Sun Microsystems, the dominant Unix workstation vendor by a long shot, does by trying to preserve the uniqueness of the Unix-RISC workstation and push their higher price tag. Nonetheless, IDC estimates that by next year, NT workstations will generate about $6.19bn in sales, just a smidgen ahead of the $6.07bn in Unix workstation sales. á