Windows NT workstations beating out Unix
January 25, 1999
by Steven Brody
SAN FRANCISCO (IDG) -- A bulletin released by International Data Corp. (IDC) reveals 22 percent growth of workstation shipments in 1998 over 1997, with volume reaching 2.3 million units. However, due to a huge increase in shipments of cheaper "branded" Windows NT workstations (workstations marketed explicitly as workstations, not high-end desktops) as a fraction of total units, revenues actually declined by 3 percent to $14.7 billion over the same period, said IDC.
Hewlett-Packard was the overall leader in unit shipments (21 percent), followed by Dell (16 percent). While Sun was the overall leader in revenue (23 percent), followed by HP (22 percent), its hold on the lead may be in jeopardy, because of the rising popularity of NT workstations.
"The lower cost of high-performance, Intel-based Windows NT systems brought workstation capabilities to a much broader set of users than has historically been the case with Unix workstations. The result has been a significant increase in units ships, but a modest decline in overall workstation revenue," said Tom Copeland, Director for IDC's Workstation Research group.
The $1.7 million in total Windows NT-based workstation shipments (including non-branded workstations, or high-end desktops used as workstations) represents a 36 percent increase over last year, and revenues ($6.8 billion) increased by 18 percent from last year, said IDC. HP and Dell were both contenders for first place in units (22.8 percent and 22.3 percent, respectively) and revenue (21.5 percent and 21.0 percent). The overall NT market data includes both branded NT workstations and non-branded workstations (high-end desktops used as workstations.)
In units, branded NT workstations exploded with 98 percent growth in units (to 776,206) and 60 percent in revenue (to $3.6 billion). The strong growth in branded NT workstations was chalked up to the increased focus by the major PC vendors on the workstation segment. HP was the marketshare leader in both units (40 percent) and revenue (34 percent), followed by Dell with 19 percent share in both units and revenue.
None of this is good news for Unix, says IDC, because it means NT is encroaching rapidly on Unix's enterprise strongholds.
"With more branded NT workstations shipping than Unix workstations in 1998, NT is driving the growth in the workstation market. NT workstations have surpassed the start-up phase and have become mainstream in the workstation market," said Copeland.
Meanwhile, for the second year in a row, reported IDC, the Unix workstation market declined in both shipments and revenue, by 6 percent and 16 percent, respectively, over the previous year. Total shipments were 599,110 and total revenue was $7.9 billion. IDC believes the decline in shipments is attributable to decreased investment in Unix workstations by companies in the U.S. and Europe and by the economic problems in Asia, particularly in Japan. The additional revenue decline, said the company, resulted from lower average selling prices due to increase competition from Windows NT workstations.
Prospects for the future aren't much better. IDC foresees big companies with large installed bases of Unix workstations incorporating NT machines into their mission critical areas over the next two years, although it said the process will be difficult.
Although NT workstations control 56 percent of units shipped, Unix held onto 68 percent of workstation revenue last year. IDC pointed to Sun, HP, and IBM as still the strongest players in the now-consolidating Unix workstation market. According to IDC's figures, Sun leads in market share in both shipments (52 percent) and revenue (43 percent), well ahead of second place HP (16 percent in units and 23 percent in revenue).
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