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Server Sales At 12-Year Low As Dell Leads Decline
2:30 PM EDT Thu. May. 28, 2009
IDC on Thursday reported in its Worldwide Quarterly Server Tracker that total worldwide server revenue for the first quarter of 2009 was $9.9 billion, the lowest quarterly server revenue reported since the analyst firm started tracking the market on a quarterly basis 12 years ago.
It also is the first time IDC reported year-over-year falls in quarterly server revenue for three quarters in a row, IDC said.
None of the top server vendors were immune to the fall in sales, with Dell's server revenue falling 31.2 percent compared to the first quarter of 2008, Hewlett-Packard's falling 26.2 percent, Sun Microsystems' falling 25.5 percent, IBM's by 19.9 percent and Fujitsu's and Fujitsu Siemens' combined revenue falling 18.8 percent, IDC said.
Unit sales fell even harder, down 26.5 percent in the fourth quarter compared to last year's fourth quarter, said Jean Bozman, research vice president of IDC's Enterprise Platforms group.
The record drop in server sales is strongly related to the economic slump, Bozman said. Server virtualization, on the other hand, has yet to have a major impact on the server market, she said.
"In the past, we talked about virtualization and the degree to which it offsets the server business," she said. "But in 2008, we saw record unit shipments. Nobody expected it to go so high."
Hewlett-Packard and IBM are in a statistical tie for leader of the worldwide server market. Hewlett-Packard's first quarter sales were down over last year by 26.2 percent to $2.913 billion, and IBM sales were down by 19.9 percent to $2.904 billion.
Dell and Sun were in a statistical tie for third place, with Dell down 31.2 percent at $1.093 billion and Sun down 25.5 percent at $1.018 billion. They were followed by Fujitsu and Fujitsu Siemens, which sold $667 million worth of servers in the first quarter.
All the different parts of the server industry took a hit.
X86-based server shipments fell during the quarter 26.3 percent over the same period last year to 1.4 million units, or about 90 percent of all servers shipped, with revenue for those servers dropping 28.8 percent to $5.1 billion, IDC said. HP was the market leader with 36.5 percent of the market, followed by Dell with 21.4 percent.
Not even blade servers were immune. Shipments fell 18.1 percent in the first quarter, leading to a revenue drop of 14.4 percent to $1.1 billion, IDC said. HP maintained its No. 1 market position with a 52.2 percent share.
Unix server revenue fell by 17.5 percent in the first quarter. However, Bozman said, this was much less of a drop than for the rest of the server market, which means that Unix server revenue accounted for 33.1 percent of the entire server market, she said.
IBM's System z mainframe servers accounted for 9 percent of all server revenue, the highest it has done so in five years, IDC said.
Windows server revenue was down 28.9 percent at $3.7 billion, while Linux server revenue dropped 24.8 percent to $1.4 billion, its lowest level in five years, IDC said.
Looking forward, Bozman said IDC expects the server market to stabilize and improve in the second half of 2009, with more improvement expected next year.
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