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COLD revenue exceeded $1 billion

This article appears in the issue October 1998 [Volume 7, Issue 11]

COLD increased dramatically both in number of systems and in total sales in 1997.

COLD revenues last year were $1.3 billion, an increase of more than 90% over 1996. That figure includes software, optical hardware, servers and services. A significant portion of the revenue increase occurred in the NT client-server market segment, which moved from $53 million in 1996 to $294 million in 1997. Unix client-server systems also increased, although not as dramatically, moving from $239 million in 1996 to $343.8 million in 1997. An area of revenue that was insignificant prior to 1997 is the CD and Online Services category, which combined for $50.6 million in 1997.

Very large COLD systems (defined as more than $1 million) grew significantly. The number increased from 49 in 1996 to 103 in 1997, amounting to revenue of $170 million. The total number of systems installed worldwide at the end of 1997 was 28,436-an increase of 6,694 systems over the 1996 total.

A client-server segment shift from Unix to NT is evidenced by the growth in NT systems-412 shipped in 1996, and 2,181 shipped in 1997. That trend will continue as NT becomes truly scalable and can handle document volumes of greater than 1 million per day with 1,000 or more concurrent users.

IMERGE projects NT shipments to increase by more than 95% in 1998 to slightly more than 4,200. The average price for NT systems at $135,000 (software, server/magnetic disk, optical disc and services) is much lower than for Unix systems at $550,000. The lower cost of storage is increasingly influencing buyers to put more documents on magnetic media and to move to optical disc.

As might be expected with the new scalability of Unix and NT, the growth of IBM mainframe (MVS)-based COLD systems decreased from shipments of 487 in 1996 to 218 in 1997. IMERGE projects MVS/COLD systems will stay level in the 200-systems-per-year range for the next three to four years before further decline occurs.

The low-end PC/LAN COLD segment of the market is in decline with shipments of 2,100 systems in 1997, down from 2,850 systems in 1996. That market will become the exclusive domain of very small vendors and the low-performance PC/LAN image vendors that want to add COLD. None of the top 50 COLD vendors currently offers a PC/LAN system.


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