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Strong US dollar hits European server shipments as CIOs protect IT budgets

Gartner server shipment figures highlight the impact of a strong US dollar on European IT buying habits as the global economy braces for another period of uncertainty

The strength of the US dollar is starting to make an impact on the IT buying behaviour of CIOs in Western Europe – and could prompt a slump in server shipments later in 2015.

That’s the hypothesis from analysts at IT market watcher Gartner, who claim the situation has already weakened the spending power of European CIOs.

As a result, many have brought forward plans to invest in server equipment – in case the situation worsens during subsequent quarters – squeezing their IT budgets further.

Gartner’s second quarter worldwide server shipment figures revealed a marked slowdown in year-on-year growth during Q2 compared with the previous quarter.

Even so, the number of servers shipped was up 8% on Q2 2014, while revenue grew 7.2%.

Jeffrey Hewitt, research vice-president at Gartner, said that – despite the growth in server shipments reported during Q2, driven primarily by the popularity of x86 systems – the spending habits of Western Europe CIOs are changing.

"Currency exchange rate changes have started to show their impact by reducing relative spending power in regions like Western Europe,” Hewitt said.

“It is likely that, in anticipation of further currency rate shifts, some organisations utilised their budgets earlier in the year rather than waiting until the third or fourth quarters – when their purchasing power may be further reduced by these relative currency changes.”

This trend was felt acutely in the Emea region during Q2, said Gartner, with server shipments and revenue growth declining by 5.6% and 2.3% in the region, respectively.

HP maintains global position

Adrian O’Connell, research director at Gartner, said: "Following a resurgent start to the year, the second quarter marked a return to the decline in server shipments and revenue in Emea.

"Ongoing economic pressures and currency-driven price increases from the strong US dollar combined to offset the server replacement cycle in Emea.”

HP maintained its position as the leading supplier of the worldwide server market during the second quarter with 25.2% share; while Lenovo continued to reap the rewards of its decision to acquire IBM’s x86 unit. So much so, the Chinese manufacturer chalked up the largest revenue growth during Q2, at 526.5%.

Rounding out the rest of the top five were Dell in second place, with 17.4% share; followed by IBM at 13.7%; then Lenovo (7%); and Cisco (6.4%).

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