IT advisory group IDC has been tracking two
apparently contradictory trends emerging in enterprise spending on servers. IDC
notes that corporate interest in x86 virtualisation technology has reached
fever pitch, and business leaders strive to improve the efficiency of their
server estate. Yet IDC also reports that spending on servers continues to rise.

On the face of it, this is curious because
x86 virtualisation has been regarded as a cornerstone of server consolidation.
For years, utilisation rates of x86 server estates has hovered around just 20%
â“ virtualisation technology allows businesses to drive those rates up,
improving efficiency and potentially reducing the number of servers needed.

But IDC notes that for the second quarter
of 2007 server sales reached over $4 billion for the second consecutive
quarter, which represents a 6% rise in worldwide sales, year on year. In the
Europe, Middle East and Africa (EMEA) region alone, 600,000 servers were
shipped, of which three quarters were shipped in Western
Europe.

IDC ascribes that growth to an increasing
appetite for richly configured x86 servers and blade servers (shipments up 12%
on the 2006 quarter). Indeed, sales of blade servers topped $300 million in a
quarter for the first time ever. These types of server are ideally suited for
virtualised environments, suggesting that companies may indeed be consolidating
their server environments, but are frequently doing so on new kit.

Competition remains fierce in the market:
Hewlett-Packard continues to lead the pack with 34% market share, slightly
extending its lead on IBM which continues to hold a 30% slice. Sun Microsystems
increased its market share by 1% to reach 14%. While, fourth-placed Dell showed
strong growth, growing sales by over 20% year on year. Dell can still, however,
only claim a 9% share of the market. The final vendor of note is Fujitsu
Siemens, with 7% of the market.