The server market declined by almost a third in 2009, but will show a small recovery in 2010 as businesses build blade server data infrastructures, according to analyst IDC.
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IT budgets in business have been slashed and major projects postponed as CIOs battle to cut costs.
But the fall in demand for servers may have bottomed out, said IDC.
The market analyst firm predicted the market for x86 servers would return to single digit growth by the first quarter in 2010, largely due to demand for blade servers and consolidated infrastructures.
"Increased consolidation, rationalisation needs and budget constraints within companies will play a major role in shaping server demand," said Giorgio Nebuloni, research analyst, European Systems and Infrastructure Solutions.
IDS predicts that sales of non-x86 servers, mainly supplied by IBM and Sun, will make a decisive comeback in the second half of 2010 because of pent-up demand for IT departments to scale up their IT systems.
Volume servers will experience a more gradual growth pattern, with revenue slowly picking up from $1.6bn in the second quarter 2009 to $1.7bn in the third quarter 2010, returning to positive growth in the second quarter of 2010. Mid-range and high-end servers will not return to annual revenue increases until the first quarter of 2011, IDC said.