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EMEA Server Revenues Pick Up Pace Again with Annual Growth of 11% in Q1'07

The EMEA server market continued to exhibit healthy growth in sales in the first quarter of 2007, after increasing factory revenue by 11%, compared to the same quarter of the previous year, to more than $4.2 billion, with a corresponding rise in shipments of 8% to 600,000 units, according to IDC's EMEA Quarterly Server Tracker service.

"Server revenue continued to be driven by consolidation efforts, SMB sales, blades, and large infrastructure projects. Sales of more richly configured servers resulted in rising average ASVs for the second consecutive quarter. In forthcoming quarters we will see wider adoption of quadcore processors, impacting prices and also the level of shipments", said Beatriz Valle, research analyst with IDC's European Enterprise Servers group.

"Server virtualization technology is rapidly becoming firmly entrenched in Western European organizations and constitutes one of the largest factors in short-term growth in the server market place", said Nathaniel Martinez, European Enterprise Servers program manager.

Meanwhile, the CEMA region (Central and Eastern Europe and Middle East and Africa) exhibited year-on-year revenue growth of 12% in 1Q07. "Thanks to continued IT spending in both the public and private sectors, the CEE region had the highest revenue growth", said Stefania Lorenz, program manager, Hardware and Systems, CEMA. "The MEA region remained buoyant thanks to demand for x86 servers - especially blade servers - although spending was down in the Unix server market."

Sales of bladed servers grew by 49% annually. The MEA region saw the highest revenue increase. The relationship between blades and virtualization has been tighter than expected.

IDC Top Server Market Findings:
· Linux growth continued unabated with an annual sales increase of 42% and its strongest performance in the Western European region to date. Windows displayed an annual revenue increase of 13% while waiting for the full impact of the Longhorn launch in forthcoming quarters. Unix displayed flat revenue growth thanks largely to its sales in the CEE region, and despite decreases in the rest of EMEA.
· Sales of x86 servers surpassed the $2 billion mark, almost on par with non-x86 server sales. There have been multiple x86 technology introductions over recent quarters that have driven higher levels of compute into this area. EPIC was the fastest-growing processor, increasing its revenue by 54% over the year-ago period.

IDC Market Findings by Vendor:
· Despite difficulties faced by AMD in the past quarter, sales of Opteron-based servers reached nearly $300 million, growing by 60% in EMEA in 1Q07.
· HP was the leading vendor after growing its revenue 15% annually thanks to a very strong performance across the Integrity, Integrity Non-Stop, and ProLiant servers. IBM lagged slightly, thanks to strong sales from System P and System zServers, as well as System X.
· Sun held on to its 11% revenue market share with very strong growth in the x86 area. Dell and Fujitsu Siemens each lost one percentage point of share over the year-ago period, as the former prepares an aggressive channel program to target the indirect sales market during the coming quarters.



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