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 percent.
"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 statement.
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.
IBM's mainframe business 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-have 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 applications.