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Server sales dip to 12-year low

The first quarter saw a number of records broken in the global server market - but for all the wrong reasons.

Customers across all geographies shelved spending plans which forced quarterly server revenues down to the lowest level seen by market watcher IDC since it began analysing the space 12 years ago.

The sector fell 24.5% in value to $9.9bn in the opening three months of 2009, the third consecutive quarter of year-over-year declines.

The recession has permeated all geographic regions and customers of all types, said Matt Eastwood, IDC group vice-president of Enterprise Platforms.

"Most enterprise organisations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilisation," he said.

However, there was a glimmer of hope for resellers and integrators as IDC predicted current buying habits were only effective in the short term.

"Server demand will 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," added Eastwood.

Volume systems were most affected in the slump, recording a 30.5% drop in revenues, while mid-range and high-end tiers fell 13.6% and 19.5% respectively. This was the second time since 2002 that all three segments declined.

The x86 space declined 28.8% in the quarter to $5.1bn. Blades experienced negative quarterly growth of 14.4% to $1.1bn, the first time the platform has posted a drop.

In terms of the vendors, HP and IBM shared the spoils at the top of the market, each holding 29.3% market share. HP saw revenues drop 26.2% and IBM's turnover fell 19.9%.

Meanwhile, the third largest vendor, Dell, saw its revenues drop faster than the market average at 31.2%. Sun, which came in fourth, saw sales drop 25.5%.

This story originally appeared on Microsope.


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