Feeds

Server sales cratered in Q4, says IDC

Blades the only bright spot

Top 5 reasons to deploy VMware with Tegile

Someone has turned the volume knob on the x64 server market from 11 down to 9. And that someone is the economic meltdown.

In the fourth quarter of 2008, when the meltdown was flaring up, server spending dropped off dramatically. The analysts at IDC who track the server space reckon that server sales contracted "sharply" in Q4, falling 14 per cent to $13.5bn, with shipments dropping by 12 per cent.

Those declines might not be as severe as the ones we have all seen in our retirement funds in recent months, but for the tectonically moving server space, where change comes in small increments, this is akin to an earthquake like we haven't seen since the dot-com bust. And it looks like it can - and likely will - get worse.

"The server market experienced its sharpest decline since the middle of the dot-com slowdown nearly seven years ago," confirmed said Matthew Eastwood, group vice president of IDC's enterprise platforms group, which puts together the server stats each quarter.

"All server vendors, geographies, and technology segments were impacted significantly as the global recession gained momentum and market conditions weakened as the quarter progressed. It now appears the slowdown will worsen before any improvement is seen in late 2009 or early 2010.

"In the near term, IT customers will increasingly look for IT optimization projects with strong ROI potential and extend virtualization, consolidation, and migration programs in order to lower capital and operational costs while improving efficiencies."

The economic meltdown was still heating up in the third quarter, as we previously reported, with server makers pulling in $12.6bn in sales, down 5.2 per cent and representing the largest quarterly decline since the fourth quarter of 2002. Shipments in Q3 fell by 2.8 per cent, the worst decline since the final quarter of 2006. Well, until the fourth quarter of 2008 came along.

The so-called volume server segment, where machines cost less than $25,000, saw the biggest revenue decline in Q4, with sales off 16.8 per cent. Enterprise-class machines, which cost $250,000 or more, had a less dramatic decline, only dropping 7.5 per cent compared to the final quarter of 2007. The midrange segment, which is for machines that cost more than $25,000 but less than $250,000, had a 14.5 per cent revenue decline.

It is noteworthy that this is the first time since 2002 that all three segments have declined. As high-end and midrange machines took it on the chin during the last recession early this decade, the volume segment - dominated by x86 machines - picked up the slack as companies cut costs and transitioned whatever workloads they could from proprietary and Unix boxes to x86 machines running Windows and sometimes Linux. This time around, Windows took the big hit.

Top 5 reasons to deploy VMware with Tegile

Next page: How Big?

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.