European server sales fall 40 per cent

Servers: In decline

European server sales slumped by nearly 40 per cent in the second quarter of this year, compared to the same period in 2008, according to IDC research.

Server suppliers in Europe, Middle East and Africa are estimated to have made £2.9bn revenue during the three months to the end of June, a 39.3 per cent year-on-year drop.

The first quarter of the year also showed a 34 per cent fall – and sales have now declined throughout the past 12 months.

Less than half a million physical machines were shipped in the second quarter, but IDC predicts that the decline will get no worse. The analyst forecasts that server sales will not return to growth until the third quarter of 2010, but while the declines will not be as sharp, the market is expected to bottom out in the first quarter next year at revenue of $2.6bn.

"In the first quarter of 2009, every sector of the economy felt the pressure of the global crisis, with most of the countries in Western Europe heading into recession and economies in Eastern Europe often paralysed by the credit freeze, " said IDC programme director Nathaniel Martinez.

Lower cost, x86-based systems are likely to see a recovery sooner than high-end machines, said IDC.

"Increased consolidation, rationalisation needs, and budget constraints within companies will play a major role in shaping server demand," said IDC research analyst Giorgio Nebuloni.

"On the other hand, non-x86 revenue, whose decline will remain in the double digits in the first quarter of 2010, will make a decisive comeback in the second half of 2010 due to pent-up demand for specific scale-up refreshment projects in the corporate space."