Internet server market to double

Revenue will climb to $13.2 billion this year, a market study says, as ISPs lead a buying spree of midrange server systems.

Keeping pace with the steady increase of Net surfers, the market for Internet servers will more than double in 1998, a market study said.

Internet service providers (ISP) will be among the leading buyers of midrange systems, which will dominate the server market through 2002, according to a new report by Dataquest. That market is likely to grow to $41 billion by 2001.

"The superior availability and salability of these systems over entry-level servers are essential in environments in which the ISP's entire business rests on the availability of its services," said Dataquest analyst Kimball Brown in a statement.

The report predicted that the server market will hit $13.27 billion this year, rising from 1997's total of $6.21 billion.

Last year, Sun Microsystems led the way with 22.3 percent of the market, followed by Hewlett-Packard with 19.6 percent, the study said.

Midrange servers typically handle applications such as Internet databases, house high-end Internet sites with large numbers of HTML pages, or function in technical or engineering environments. Such systems accounted for 67 percent of all server purchases last year, the report said.

Dataquest forecasts large shipment growth for vendors, such that that by the year 2001 nearly 3.2 million units will enter the market. That compares with the 151,000 units shipped in 1996.

The report added that the market is in its infancy and that it is not too late for new vendors to vie for a share of the market.