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EuroMidEastAfrica server biz tumbles

20.6% rev drop

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Last week, the box counters at Gartner put out their report on server shipments and revenues globally in the fourth quarter of 2008, and now, they want to drill down a bit for the EMEA region.

Gartner believes that customers in Europe, the Middle East, and Africa bought 704,830 servers of all types and stripes in the final quarter of the year, a decline in unit shipments of 9.2 per cent. That was better, as it turned out, than the 11.2 per cent shipment decline on a global basis. That's the good news. The bad news is that revenues fell faster in EMEA than for the world at large, with sales dropping by 20.6 per cent to $4.32bn. The global market plummeted by 15.1 per cent to $13.1bn in Q4.

The market researcher said that this was the worst server shipment decline since 2002 and that the declines was not just happening in Western Europe, where the economies have either flattened or gone into recession, but also in Eastern Europe, where growth has been good, and in the Middle East and Africa too.

In terms of revenues, Hewlett-Packard was the big beneficiary in the EMEA region in Q4 because it only suffered an 11.7 per cent sales contraction, to $1.6bn. But IBM took a whopping 31.7 per cent revenue hit in EMEA in the quarter, falling to $1.29bn, according to Gartner, and that means HP knocked out Big Blue as the dominant seller of servers in EMEA. This has happened before on a global basis, but the numbers were subsequently revised by Gartner for reasons the company did not explain to me when I asked, and IBM was put back on top of the heap. In any event, it seems highly unlikely, given that experience, that the numbers will be revised in IBM's favor this time around.

Sun Microsystems continued to hold its number three slot in the server revenue rankings in EMEA, with $480m in sales, down 16.9 per cent and therefore giving the company a smidgen of extra market share. Dell came in at number four, with $373m in sales (down only 11.6 per cent), followed by Fujitsu-Siemens with $224.8m, down 33.9 per cent. Other vendors in EMEA added together accounted for $349.9m in sales, down 11.3 per cent.

Gartner said that revenues for Unix servers based on either RISC or Itanium servers fell by 24.8 per cent in Q4, and that IBM, HP, and Sun - who have the largest pieces of this market - all had double-digit sales declines. Gartner added that Unix server volumes were not hit as hard across all types of Unix gear, but that high-end Unix gear took it especially hard on the chin in the quarter.

On the x64 server front, Gartner says shipments fell by 9.5 per cent in Q4, with HP dropping 5.2 per cent, Dell dropping 7 per cent, and IBM falling an alarming 28.5 per cent. Something has been very wrong in IBM's System x and BladeCenter businesses for the past several quarters, and the company has not really elaborated. While Sun was able to gain market share in the x64 racket in EMEA, the company still accounted for under 2 per cent of the total x64 server market in the fourth quarter. Sun has to grow a lot faster to be a player in this space.

In terms of shipments, HP has held the top spot in EMEA since acquiring Compaq, and in the fourth quarter of 2008, the company shipped 289,747 boxes, by Gartner's estimates. HP's shipments fell at about half the rate of the overall market decline, and that means it gained share on both the revenue (3.7 points) and the shipment (1.9 points) fronts in EMEA during the quarter. Dell was the number two server shipper in the region, with 120,600 boxes going out the door (down 7 per cent), followed by IBM with 102,549 boxes (down 26.3 per cent), Fujitsu-Siemens with 41,242 boxes (down 15.3 per cent), and Sun with 27,469 (down 11.3 per cent). Other vendors pumped out 123,223 boxes in Q4 in EMEA, down 5.3 per cent. ®

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