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    Global Server Market Declines in Q2: IDC

    By
    Jeff Burt
    -
    September 2, 2009
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      The global recession continued to batter the worldwide global market in the second quarter, but IDC analysts expect sales to pick up in the coming quarters.

      In numbers released Sept. 2, IDC found that second-quarter global server revenues declined 30 percent-to $9.8 billion-over the same period in 2008, while shipments fell 30.4 percent. The revenue was the lowest for a quarter since IDC began tracking the market on a quarterly basis in 1996, and the shipment decline also was the largest on a year-over-year basis.

      It marked the fourth consecutive quarter of revenue decline.

      Revenue in all classes-from volume to midrange to high-end systems-fell by at least 28 percent, and there wasn’t a region that didn’t feel the slowdown.

      In addition, numbers were down for x86 and non-x86 servers alike, with revenues dropping 28.1 percent and 32.2 percent, respectively.

      Doing the best in the server space was the blade market, which saw revenues drop for the second consecutive quarter, falling 12.1 percent. Shipments declined 19.8 percent year over year.

      However, despite the numbers from the first half of the year, IDC analysts are expecting the second half of 2009 and 2010 to see revenues and shipments begin to climb. With their budgets slashed in the wake of the recession, many IT administrators have been extending the lives of their systems well beyond their refresh date, according to IDC analyst Dan Harrington.

      In addition, many IT administrators have put off buying new servers until Intel and Advanced Micro Devices launched their new processors, the quad-core Xeon 5500 Series “Nehalem EP” and six-core “Istanbul” Opterons, respectively, Harrington said.

      Many businesses decided to delay purchases of systems until servers sporting the new processors-such as Hewlett-Packard’s ProLiant G6 servers-hit the market, he said. Such servers promise high performance with greater energy efficiency and enhanced virtualization capabilities, and offer a faster return on investment.

      “There was a lot of interest [in servers with the new chips],” Harrington said. “They’ve put off refreshing [their systems]. … You can only put off the refresh cycle for so long, especially when the ROI is so short.”

      When the buying does start up, he said he expects to see a change in buying patterns, with businesses being more aggressively in embracing such technologies as virtualization, which offers greater cost and power savings. A year ago, a company considering a virtualization project may have decided to put it off for a while. Now that same company may be more anxious to invest in virtualization.

      “People are more likely to adopt these technologies,” Harrington said.

      Those technologies and the age of the current servers will fuel the pickup in purchases.

      “These refreshes have to happen sometime,” he said. “In some cases, you have 6-year-old servers that can’t run the applications out there today.”

      That will be welcome news to OEMs, which have seen sales fall over the past few quarters. IBM and HP again were 1 and 2 in the server space, with IBM having a 34.5 percent market share to HP’s 28.5 percent.

      Dell was in third with a 12.4 percent share, followed by Sun Microsystems at 10 percent and Fujitsu/Fujitsu Siemens at 3.5 percent.

      Avatar
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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