Factory revenue in the worldwide server market declined 30.1% year over year to $9.8 billion in the second quarter of 2009 (2Q09), according to the latest numbers from market-research firm IDC. This is the fourth consecutive quarter of revenue decline and the lowest quarterly server revenue since IDC began tracking the server market on a quarterly basis back in 1996.

Revenue for all classes of servers weakened further in the second quarter, with volume systems declining 30.0% and midrange enterprise revenue off 28.1% year over year. The slowdown extended to the high-end enterprise segment where revenue declined 32.0% when compared to the same quarter one year ago. This is the third consecutive quarter that all three server segments have experienced a year-over-year revenue decline in the same quarter.

Server unit shipments also declined to 30.4% year over year in 2Q09, representing the largest ever year-over-year quarterly server unit decline as customers continued to defer server refresh activities, IDC concluded.

"Over the past four quarters, the worldwide server market has experienced significant revenue deceleration in all geographic regions as the economic recession has deepened," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Fewer servers have been shipped over the past four quarters than at any time since 2005 and it is clear that the worldwide server installed base is aging rapidly. In the weeks and months ahead, IDC believes that IT customers around the globe will begin to focus on the future once again, making strategic compute platform decisions for the next business cycle, and driving more predictable server demand as market conditions stabilize in the second half of 2009."

Market standings by vendor broke down as follows:

• IBM held onto its number 1 spot in the worldwide server systems market with 34.5% market share in factory revenue for 2Q09 and gaining 1.8 points of share in the quarter on the performance of System x and System p.

• HP maintained the number 2 spot with 28.5% share for the quarter, on a 30.4% year-over-year revenue decline.

• Dell held the number 3 position with 12.4%; its factory revenue declined 26.8% and increased its market share by 0.6 pts year over year

• Sun came in at number 4 with 10.0% factory revenue share, a decline of 37.2% year over year.

• Fujitsu/Fujitsu-Siemens maintained its fifth-place standing in terms of factory revenue, with 3.5% market share in the quarter.

Daniel Harrington, an IDC analyst, said Sun was hurt in part because demand for specialized servers that aren't based on the widely used x86 microprocessors were hit badly in the latest quarter, reported AP. Pressure from rivals compounded the pain.

"Non-x86 servers did poorly for the quarter overall, and since Sun's business is largely exposed to that segment it suffered because of it," Harrington said. "Without a doubt there were also negative affects on their business due to 'Sun Attack' programs launched by both IBM and HP in an effort to go after those uneasy customers. I think you are starting to see the first signs of that in these numbers."

More Information

IDC

IDC Press release on Server Market Deceleration

Sun Servers [...read more...]

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