Gartner Dataquest Says Worldwide Workstation Revenue Declined 13 Percent in
SAN JOSE, Calif., March 12, 2001 — Workstation vendors are faced with the challenge
of competing in a much more saturated market, and, as a result, worldwide workstation
revenue in 2000 declined 13 percent from 1999, totaling $8.6 billion in 2000, according
to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB). The industry's growth
area for shipments has been in Intel-architecture (IA) workstations, for which shipments
increased 19 percent, but this has not translated into strong revenue growth for
the industry because of the ongoing decline in average system prices.
"Aggressive growth of the IA-NT workstation market and convergence of the technologies
has led to a blurred distinction between PCs and workstations," said Pia Rieppo,
principal analyst covering workstations for Gartner Dataquest's Computing Platform
Worldwide group. "Navigating this no-man's land will be the biggest challenge the
workstation vendors face in the near future."
Despite its decline of worldwide workstation revenue of 10 percent, Hewlett-Packard
was the No. 1 vendor in the market (see Table 1). Dell was the only top-tier vendor
to experience positive growth in 2000, as its revenue increased 41 percent over
Worldwide Workstation Vendor Revenue Estimates for 2000 (Millions of Dollars)
Source: Gartner Dataquest (March 2001)
"Success of the direct channel, as evidenced by Dell's strong performance, forced
many of the vendors to aggressively push forward with new, somewhat unfamiliar business
models. This requires significant internal resources and restructuring," Ms. Rieppo
said. "PC go-to-market strategies lead to a major dilemma of how to balance solution-centric
sales at the high end and the high-volume play at the low end. As a result, many
vendors continue to struggle with where to position workstations internally — with
PCs or with servers."
"The 2000 workstation results do not bode well for 2001," said Shahin Naftchi, senior
analyst covering servers and workstations for Gartner Dataquest's Computing Platform
Worldwide group. "In 2000, the United States and Western Europe accounted for 74
percent of the workstation revenue, but both of these locations are facing sluggish
sales. In fact, while all other regions grew in 2000, shipments in Europe declined
by 6.7 percent from 1999.
"Vendors will have to redirect their attention elsewhere," Ms. Rieppo said. "The
problem is, many of the other countries are much smaller, so sales in those areas
will not offset the revenue loss from the United States and Europe."
Additional information on the workstation industry is available in the Gartner Dataquest
Alert, "Worldwide and U.S. Fourth Quarter and Year 2000 Final Estimates for Workstations."
This Alert provides workstation vendor market share results both worldwide and in
the United States on a revenue and shipment basis. To purchase this Alert or subscribe
to Gartner Dataquest's Workstations Quarterly Statistics Worldwide program, please
call 800-419-DATA, or 408-468-8009.
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