The European server market declined at a record rate in the first quarter of 2009, with revenue down 34.3 per cent to $2.9bn, according to researcher IDC.

Separate figures also released today by analyst Gartner showed worldwide server revenue down by 24 per cent.

Gartner's research showed European shipments dropped 29.6 per cent to less than half a million units for the first three months of the year.

The significant decline that occurred in the last quarter of 2008 had extended into 2009, said Gartner research vice president Jeffrey Hewitt.

"While this was not unexpected, the severity of the decline was greater than predicted on a worldwide level,” he said.

Hewitt said the ongoing weakness of the global economy affected all server segments.

"X86-based servers fell 23.9 per cent in units and 27.1 per cent in revenue. Unix servers also were impacted in quarterly results, with drops of 31.3 per cent in units and 20.4 per cent in vendor revenue,” he said.

Nathaniel Martinez, IDC's programme director for European systems and infrastructure solutions, said the finance and automotive sectors led the decline in European server spending.

"[The economic downturn] spreading to all economic segments at the start of 2009, led to recessionary environments in many countries in Europe, Middle East and Africa," he said.

"While the technology drivers and customer needs remain unchanged, organisations and IT departments react to poor trading conditions and falling demand by streamlining their balance sheets and postponing and downsizing non-urgent IT investments."

IDC sees IT upgrades being put on hold in most industries, but continues to see virtualisation driving sales of more richly-configured server systems in certain segments, especially where consolidation projects can drive significant savings in the short to medium term.

"These segments include large companies in the corporate space, for which profitability is not a pressing issue, and the public sector," said Beatriz Valle, IDC analyst for European systems and infrastructure solutions.