For the first time since 2000, the server market will grow again, the report predicted, driven largely by increasing sales of Intel servers running Windows and Linux. However, it won't be a big jump: Server revenue is expected to increase less than 1 percent from 2002 to 2003, Hewitt said. Still, it would be an improvement from years past for server makers, which have been suffering with the demise of manic Internet spending and with the economic recession. With resumed growth, though, companies won't be able to blame the economy for poor sales. "Ailing economies will no longer be an acceptable excuse for poor performance," Hewitt said. Without effective sales and marketing in 2003, server makers likely won't be able to participate when server sales growth accelerates in 2004, he said. Part of the reason for the revenue growth is that server makers simply can't cut prices much more, Hewitt said. "Because 2002 saw this aggressive pricing by vendors, it does not leave much room for continued price reductions in 2003. This will help to keep pricing more stable in 2003," he said. Shipments of Linux systems likely will double from 2002 to 2003, rising to about 800,000 units, Hewitt predicted. Linux server revenue will increase to about $4bn in 2003. Server makers must build effective Linux marketing, sales and support programs as a result, Hewitt said. "Lip service will not be enough; the ability to execute and show significant participation in Linux server market share will be vital to capture growth from this operating system as Linux continues its acceleration in 2003," Hewitt said. One compelling pricing advantage of Linux is lower "client licence" fees, the money software companies charge according to how many computer users are tapping into a server. Linux software, unlike many competitors, often comes with no client licence fees.
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