Server revenues climbed 2.5 percent in the past year according to IDC’s quarterly worldwide server tracker. In the second quarter of 2014 sales totalled US$12.6 billion. Unit shipments grew 1.2 percent to 2.2 million.

The standout segment was mid-range systems which saw 11.5 percent growth. IDC puts the surge down to technology refresh cycles. Volume systems climbed 4.9 percent. Meanwhile, high-end enterprise systems dropped almost 10 percent.

HP moved into top slot with a 25.4 percent market share for the quarter. This time last year IBM was the leader, but with year on year sales revenue down more than 10 percent, IBM is now in second place with a 23.6 percent market share. The company’s share will fall faster thanks to Lenovo buying part of IBM’s server business.

Dell, Oracle and Cisco are runners-up. Cisco’s revenue jumped by over 35 percent putting it in joint fourth place with Oracle. IDC lists the little-known companies making cloud servers as ODM Direct. They collectively scored a 6.6 percent market share.

IDC says the market is going through a refresh cycle with servers being replaced. The analyst expects this to continue for the next year or so with Microsoft’s decision to end Windows Server 2003 support likely to further stimulate sales. Also on the horizon is Intel’s Grantley Xeon technology.

There are clear signs unified communications is gathering momentum in New Zealand. It was one of the most discussed topics at this year’s Microsoft TechEd conference and stories about implementations and successes continue to arrive.

And yet Frost & Sullivan’s 2013 research report shows the market for UC products and services declined 4.5 percent in 2012 to a shade under $100 million. The company still forecasts solid growth over the long-term with a year-on-year increase of 6.2 percent between 2012 and 2019.

Last year’s downturn was mainly due to organisations reducing IT spending and deferring investments. Frost & Sullivan says cost and efficiency pressures are driving the  demand  for  hosted  and  cloud  based  solutions, which offer greater flexibility and with minimal maintenance overheads.

Key markets for unified communications

Frost  &  Sullivan says government and the banking, financial services and insurance sector are the key UC markets in New Zealand. Both were cautious rolling out UC during the year.

Two companies dominate the NZ UC market. Cisco and Microsoft account for 40 percent of the total.

Audrey  William, head of research, ICT practice, Frost & Sullivan ANZ says: “Microsoft  Lync  is a disruptive factor in the New Zealand UC market as it gives  Microsoft  the  ability  to  offer  core  functionality  such as IM, presence,  voice and video on a single platform. Lync’s defining feature of serving as a PBX is driving many organisations to test Lync at the time of  their PBX renewal as an option to simplify and cut costs in their UC infrastructure”.

If anything New Zealand’s data appetite grew even faster than the Cisco estimate.

2degrees sent out a press release last week saying network data increased by almost three times in the last year. It didn’t say what the base was, so it isn’t clear if that estimate means anything much.

Meanwhile Vodafone New Zealand says data traffic has quadrupled over two years and climbed by 1300% in the last four years.

Cisco is set to offload its Linksys business. Business Insider reports the deal may already have taken place.

Linksys makes wireless routers for home users. That makes it a consumer brand languishing in a company that is best at dealing with business and corporate customers.

Networking giant CIsco made its billions riding the Internet growth spurt in the 1990s. In 2003 it sniffed the wind – correctly at it happens – and decided the future lay in consumer and small business products. The company dipped into Uncle Scrooge McDuck-like swimming pools full of gold to pick up Linksys.

At the time it seemed like a good idea. Alas, Cisco never got consumer. Its Linksys products were largely lacklustre – I had the misfortune to own one for a while. Cisco also made a complete mess when it purchased the Flip consumer camera business a few years later.

Now Cisco plans to become an all-embracing enterprise IT business with products and services aimed at the data centre. Making low-margin devices, piling ’em high and flogging them though retail channels simply doesn’t gel with that kind of business. Getting rid of Linksys is a smart move.

What I’d love to know is whether Cisco turned a profit on the US$500 million it paid for the business in 2003.