Server Makers Will Have Plenty On Their Plates In 2003 Customers Overspent How HP-Compaq unite will have a big bearing on rivals Dell, IBM, Sun.(A)

Byline: MURRAY COLEMAN

Signs of life are showing up in the server market.

But will they last? And what kind of a force will the merged Hewlett-Packard Co. and Compaq Computer prove to be?

Those are the big questions heading into the new year for the companies that build the machines that power corporate networks and Web sites.

While there's reason for optimism, analysts say, the server market is full of question marks. One reason is that HP's $19 billion purchase of Compaq Computer, a merger of two server powerhouses, is still shaking out.

Right after completing the acquisition in May, HP/Compaq reigned as the world's leading server maker. But IBM Corp. jumped slightly ahead of HP later in the year. And Sun Microsystems Inc. remains a strong contender.

Market trackers expect another tight race in 2003. And Dell Computer Corp., king of low-priced servers, is pushing ahead as it expands into the higher end.