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Selling servers in Europe is no easy task these days, and probably not just because some of the economies in the region are wobbly or crashing. EMEA server buyers have always reacted a little differently when recessions hit, often getting out on the vanguard of where the rest of the world eventually follows. Such was the case with the rapid uptake of so-called open systems - what we now call Unix servers - nearly two decades ago.

What goes up always comes down here on Earth. In the third quarter, non-X64 iron sales fell flat on their arse. According to the box counters at IDC, sales of Sparc, Power, Itanium, and proprietary machines fell by 22.5 per cent in Q3 to $939.3m. This marks the first time in the history of IDC's tracking of system and server sales - which started back in 1996 - that sales of machines in the EMEA region that did not use x86 or x64 processors have dropped below $1bn in a quarter. And, IDC says, that current sales level is far off the peak for RISC/Itanium/proprietary iron revenues, which hit $3.7bn in the fourth quarter of 1996 in the EMEA region and have been wiggling their way up and down each quarter but nonetheless sliding ever since that peak fourteen years ago.

Not to be a total bummer to IBM's mainframe and Power systems businesses as well as the Unix wares of Hewlett-Packard, Oracle, and Fujitsu, IDC quickly added in its assessment of Q3 server sales in EMEA that there is evidence of pent-up demand in the fourth quarter for both mainframe and Unix servers, particularly among financial institutions and telecommunications companies that slammed on the spending brakes, nearly putting their feet through the floorboards, as 2008 was coming to a close during the Great Recession.

Overall, server sales in EMEA rose by 6.4 per cent in the third quarter, to $3.1bn, and shipments rose by 10.2 per cent, to just under 550,000 units. The worldwide server market, by contrast, will soon be growing revenues faster than shipments, meaning a lot of x64-based server buyers are getting fatter servers to do server virtualization and, presumably, to take on some workloads that might have otherwise gone on big ole Unix and proprietary systems.

As El Reg already covered in details last week, IDC believes that worldwide server revenues were up 13.2 per cent in the third quarter, to $11.8bn, while shipments were up nearly an identical 13.1 per cent, to just over 1.9 million units. IDC believes shipment growth is cooling, after being up by 23.8 per cent in Q2 (at 1.8 million units) and up 23.3 per cent in Q1 (1.8 million units again). It would be a fair guess that maybe 2 million units could be pushed out the door in the fourth quarter, but shipment growth will only rise by 5 per cent if only 2 million boxes go out between the beginning of October and the end of December.

In the x64-based server segment in EMEA, revenues are already growing at more than twice the rate of shipments, says IDC. Shipments were up by 11 per cent to 533,000 units, but revenues were up 26.5 per cent, to $2.2bn.

"Banks and to a lesser degree insurance companies are currently engaged in server refreshes and adding new server capacity," said Beatriz Valle, senior research analyst in IDC's enterprise server group, in discussing the server numbers. "Server spending in the government segment remains healthy in France and Germany, although it is contracting in the UK and Italy. In the SMB segment, virtualization deployments are gaining steam."

The CEMA subregion - where IDC lumps together Central and Eastern Europe, the Middle East, and Africa - had 147,000 server shipments in Q3, up 17.9 per cent, while revenues hit $743.5m, rising 14.6 per cent. Central and Eastern Europe alone had $383m in sales, increasing a boisterous 27.8 per cent in the quarter, but the Middle East and Africa stagnated, with only 3.3 per cent revenue growth, to $360.5m. Russia, Poland, and the Czech Republic booked double-digit sales growth, as did South Africa and Israel.

IDC takes a stab at reckoning what the primary operating system is on the machines that server makers kick out the door, and believes that Windows-based machines comprised $1.6bn in sales in EMEA in Q3, more than half the market and growing by 23 per cent. Linux-based machines grew revenues by 23.7 per cent, to $622m, while Unix boxes fell by 16 per cent to $67m. Other machines, which include Unisys, IBM, Bull, and Fujitsu mainframes sold in EMEA as well as proprietary platforms running OpenVMS and GCOS, and a few others, stomached a 32 per cent decline, to $231m. Server running IBM's flagship z/OS operating system, which represented the bulk of sales in the Other category, had $193m in sales, falling 14.2 per cent. Perhaps mainframes and other platforms will do better in Q4. Perhaps not.

By vendor, IDC says that Hewlett-Packard is the leader, with nearly 44 per cent share of revenues after growing sales by 14.9 per cent in Q3, to $1.38bn. IBM is ranked second, as it has been for years, with only $882.2m in server sales, falling 2.6 per cent. Europeans are apparently not as enthusiastic about the new System zEnterprise 196 and Power7 systems as their counterparts in North America and Asia. Dell had nearly 30 per cent revenue growth in the quarter, but only $364.1m in sales. Oracle's EMEA server business continues to get hammered, with revenues dropping 20.8 per cent, to $191.9m. Fujitsu's server biz in EMEA was up just two-tenths of a point, to $182.9m, and other vendors had a miniscule $156m in sales all told, rising one point compared to the year-ago period. ®

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