The global server market saw revenue and shipment declines across all major segments during the first quarter as enterprises delayed system purchases in light of the crushing worldwide recession, according to IDC. The x86 server space was particularly hard hit, though analysts don't expect that to continue much longer. HP and IBM tied for the lead in server revenue market share, though all the top vendors saw double-digit revenue declines.
The worldwide server market continued to get hammered in the first quarter
of 2009, with the volume x86 space bearing the brunt of the global recession.
According to numbers released by research firm IDC
May 28, overall server revenue in the quarter fell 24.5 percent over the same
period in 2008, while shipments declined 26.5 percent.
All of the top server vendors also saw double-digit server revenue drops,
and each segment within the market also declined. IDC
analysts attributed the declines to businesses pulling away from normal server
refresh cycles and new IT projects, opting instead to hang on to the systems
they already have.
Hewlett-Packard and IBM shared the lead,
each with 29.3 percent of market share. Dell was third with 11 percent share,
followed by Sun Microsystems and Fujitsu, at 10.3 percent and 6.7 percent,
respectively. All experienced revenue declines of between 18.8 percent and 31.2
"Market conditions worsened in all geographic regions during the first
quarter as customers of all types pulled back on both new strategic IT projects
and ongoing infrastructure refresh initiatives," IDC
analyst Matt Eastwood said in a statement. "Most enterprise organizations are
deferring new IT procurements and instead focusing on extending server lifecycles
and improving existing asset utilization."
Eastwood said such a strategy was smart in the short term, but predicted
that server demand would pick up in the second half of 2009, with businesses
buying systems in anticipation of the expected recovery beginning in 2010.
The quarter was particularly hard on the x86 server market, where revenues
declined 28.8 percent, to $5.1 billion-the lowest since the third quarter of
2003-and shipments dropped 26.3 percent, to 1.4 million servers. Analyst Dan
Harrington said it was easier for businesses to delay purchases of the x86
volume server than of RISC- or CISC-based
systems-which tend to run more mission-critical workloads-but he didn't expect
the trend to last.
"IDC expects x86 systems to rebound
faster than the overall market in the coming quarters," Harrington said in a
Similarly, blade server revenue and shipments also declined, by 14.4 percent
and 18.1 percent, respectively, though it did grow its share of the overall
server revenue as businesses continued to look for technology that help reduce
costs and increase efficiencies.
While non-x86 segments also experienced revenue declines, their shares of
the overall server market rose. For example, while Unix server revenue declined
17.5 percent, the $3.3 billion was 33.1 percent of the overall revenue
spending, compared with 30.2 percent in the same quarter last year.
Analyst Jean Bozman said the delaying of server purchases hurt the Unix
server space as well, but the increase in market share was due in part to the
presence of midrange and high-end Unix servers, which tend to have higher
average sales prices than their x86 counterparts.
also got a boost. According to IDC's numbers, IBM's
System z servers running the z/OS operating system outperformed the overall
market for the fifth consecutive quarter. Revenues declined 18.9 percent, but
accounted for 9 percent of all server revenue, the largest percentage for the
System z in five years.
IBM and other vendors-such as CA
BMC Software and Unisys
been working to modernize the mainframe platforms by making them easier to
deploy and manage, and enabling them to handle workloads such as Linux and Java