During the first three months of 2009, sales of servers worldwide fell 25% against the same period last year. Market research carried out by research firm IDC indicates that global sales were the lowest figure (£6.14bn) since the firm began monitoring some 12 years ago. The outlook doesn’t get any better with the situation expected to continue throughout 2009.
“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,” said Matt Eastwood, IDC’s group vice president. He continued to add; “Most enterprise organisations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilisation.”
This kind of broad decline in sales, across all three server markets – volume, midrange, and high-end systems, has not been experienced since 2002. The big 5 – HP, IBM, Dell, Sun and Fujitsu/Siemens – all suffered a double digit drop in revenue. HP and IBM have been hit the hardest, with Sun and Dell joint 3rd. Dell alone have seen server revenue plummet by over 31%.
Server operating system revenue also declined, IDC said.
· Revenues for Unix servers fell 17.5% compared with the same period a year earlier.
· Revenues for IBM’s System z servers, running the z/OS operating system, fell 18.9%.
· Microsoft Windows server revenues fell 28.9% to $3.7bn
· Linux server revenues fell 24.8% year-over-year to $1.4 billion, its lowest in five years.
Mr Eastwood said companies had suspended buying new equipment and were focusing on extending the lifespan of existing products. “While these strategies are effective in the near term, server demand will begin to improve in the second half of the year as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010,” he said.