IDC Says Server Sales Plummet In First Quarter
28 May 2009 - 2:31PM
Dow Jones News
The recession continued to take a big bite out of sales of giant
computers known as servers during the first three months of the
year, market tracker IDC reports.
Worldwide server revenue fell 24.5% during the quarter, which is
the biggest annual percentage drop since IDC began tracking server
sales in 1996. It was also the first calendar quarter since 1996 in
which server revenue, at $9.9 billion, fell below the $10 billion
mark. And it was the third consecutive quarter of revenue
declines.
Sever sales were slow in every geographic area IDC tracks, with
particular weakness in Europe.
The recession is mostly to blame, as businesses continue to
throttle back spending on new servers. Unlike the last recession,
however, server makers aren't drastically reducing prices but
rather keeping them steady.
Hewlett-Packard Co. (HPQ) and Dell Inc. (DELL) were particularly
hard hit, IDC says, with Dell's server revenue down by nearly a
third, and H-P losing about a percentage point of market share.
Meanwhile International Business Machines (IBM) performed better
than its rivals.
H-P and IBM both ended the quarter with a leading 29.3% market
share, with H-P's share falling slightly while IBM saw its share
rise nominally. Sun Microsystems Inc. (JAVA) and Dell were in a tie
for next in line.
The situation's not getting better. IDC analyst Matt Eastwood
said to expect a repeat performance in the second calendar quarter,
which IDC has yet to report.
However, he expects server sales to stabilize sometime in the
second half of the year, with businesses expected to loosen up
spending. Eastwood also sees growth returning to the server market
in 2010.
-By Ben Charny, Dow Jones Newswires; 415-765-8230;
ben.charny@dowjones.com