Unix systems market continues healthy worldwide growth - Industry Overview

The Unix systems market recovered sharply in 1994 and enters 1995 with good momentum. HP looks like a world beater, IBM should accelerate, and Digital has surprisingly good Unix growth. The increasing concentration of midrange market share into the hands of the top four leading vendors (HP, IBM, AT&T, and Sun) may slow in 1995 because most vendors should do well in the business climate ahead.

1994: Stronger than Expected

The Unix hardware market nearly doubled IDC's 1994 forecast to grow more than 20% in systems revenues. The Unix market exhibited robust and balanced growth in all size classes except large-scale systems. A reinvigorated Unix PC and workstation segment grew 21%, and small-scale systems also grew 29%. Medium-scale systems slowed from their torrid pace in 1993 to grow 28%.

HP continued its strong PA-RISC system product cycle. Its flagship Unix server line, the 9000 Series 800, grew 46% - in the Unix midrange overall it grew 40% (the remnants of the Unix server business purchased from Texas Instruments converting to the Series 800 accounted for this difference). HP exhibited solid strength in each market segment in which it competed.

Sun rose fastest among the top players in the Unix midrange fueled by rapid growth in small-scale systems. Its growth in workstations continues to be slow. IBM, SGI, and Digital captured the lion's share of the workstation growth.

In 1994, IBM suffered the lack of SMP capability at the top of its RS/6000 line, and its medium-scale revenue growth trailed the other major vendors. The company should finally benefit from its long-delayed SMP product, due to ship in early 1995. Because SMP reliability and performance tuning could take up to six months, SMP sales volumes will have an extended ramp-up during 1995.

Among the system vendors, Digital's conversion of its installed base appears to be fueling its rapid growth in the low end of the Unix market. The company had among the highest growth rates for vendors in workstations and in small-scale systems. If it can build on this trend, a Digital recovery may be imminent.

Midrange Near-Term Outlook

Sun faces severe challenges in 1995. Preliminary 1994 estimates show it to be in a virtual tie with HP for the overall Unix market share leadership. Sun's Unix growth has slowed below the overall Unix market growth rate even as HP and IBM steadily gain product and market momentum. Sun's brightest hope lies in the strong market reception for its multi-user server products. Sun will need very strong growth in midrange systems as well as improved workstation results in order to regain its historical growth rates.

In early 1995, IDC expects HP to enhance its server line with a new hardware release. A major focus of the announcement will be the release of HP-UX 10.0, which had slipped through 1994. We expect HP-UX 10.0 to rationalize HP's workstation and server operating systems and provide enhanced SMP support. The new products will maintain HP's continued Unix growth.

Worldwide Unix Systems Leaders, 1994(*)

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