In the fourth quarter of 2008, worldwide server revenue decreased 15 percent for a total of $13.1 billion. Meanwhile, system shipments fell more than 11 percent for a total of 2.1 million units. For the year, server revenue dropped 4 percent compared to 2007, while shipments increased only 2.6 percent.
The March 3 Gartner report was just one of several recent surveys that showed how both businesses and consumers are pulling back on their purchases of servers, PCs and other hardware as the United States continues to slide into a recession and the global economy slows down.
IDC released its own report in February that painted a similar picture of the server market.
"The weakening economic environment had a deep impact on server market revenues in the fourth quarter as companies put a hold on spending across most market segments," Heeral Kota, a Gartner analyst, wrote in the research firm's report.
In terms of revenue, IBM bested all other vendors and pulled in $4.4 billion during the fourth quarter of 2008. However, those numbers were a 17 percent decrease from the fourth quarter of 2007, when IBM's server revenues topped $5.3 billion. In the fourth quarter of 2008, IBM's System z mainframe systems helped boost the company's revenue.
After IBM, HP pulled in $3.9 billion worth of server revenue, a decrease of 10 percent from 2007. HP's line of x86-based ProLiant servers helped the company along.
Dell's revenues dropped 11 percent year-over-year for a total of $1.4 billion, while Sun's fell 15 percent to $1.3 billion. Fujitsu/Fujitsu Siemens rounded out the top five with $560 million in server revenue, a year-over-year decrease of 25 percent.
HP did top all other server vendors when it came to unit shipments. In the fourth quarter, HP shipped more than 690,000 units, but that constituted a 1.6 percent decrease from the fourth quarter of 2007.
Dell watched its server shipments fall 7 percent for a total of 464,000 units, while IBM's unit shipments tumbled 22 percent for a total 289,000 units.
Meanwhile, Sun's shipments fell 4 percent for a total of 81,000. Fujitsu watched its shipments fall 14 percent year-over-year for a total of 65,000 server units.
Demand for specific types of servers also declined in the fourth quarter. Shipments of volume, x86-based servers dropped 11 percent, while Unix-based system shipments dropped 10.5 percent.
Blade server shipments and revenue were the only bright spots in the Gartner report. Blade shipments increased 30 percent in 2008, while revenue from blade servers also increased 30 percent year-over-year.