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Government spending freeze kills off spring server sales

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The UK server market is back in the doldrums with revenues tumbling 10 per cent in the first quarter and worryingly for resellers the short-term prognosis is anything but rosy, according to market researcher IDC.

Factory revenues slid 10 per cent to $508m (£310m) in the first three months of 2011, and only Portugal fared worse across Western Europe – which climbed nearly 8 per cent – with sales diving 14 per cent.

"The main differentiator is mainframes," said Nathaniel Martinez, research director at IDC. "Sales have not rebounded in the UK as they have across Western Europe as the government put infrastructure refreshes on hold."

According to the market watcher, CISC revenues collapsed 64 per cent, RISC declined 18 per cent, x86 fell 2.2 per cent and only the EPIC segment posted growth, up 9 per cent year-on-year.

The brightest areas of the market came from large corporates, including telcos and hosting firms that were bulking up infrastructures fuelled by the investments in cloud strategies and virtualisation deployments – the ever green driving forces behind the server space.

Only Dell managed to post growth in the UK, with revenues rising 2.8 per cent while HP declined 0.6 per cent, IBM dropped 21 per cent, Oracle fell 25.3 per cent and Japanese firm Fujitsu saw sales plummet 64 per cent, despite making the server market a strategic corporate priority.

The latest UK numbers are in stark contrast to Q4 when it sales leaped 12 per cent amid indications that budgets were released to replace ageing kit.

Martinez at IDC said all indications were that the market will remain depressed for some time yet. "We are in the process of forecasting but things don't look good for the UK in the second quarter; market conditions remain harsh," he told the Reg. ®

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