According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 24.5 percent year over year to $9.9 billion in the first quarter of 2009 (1Q09). This is the third consecutive quarter of year-over-year revenue decline and the lowest quarterly server revenue since IDC began tracking the server market on a quarterly basis 12 years ago. Server unit shipments declined 26.5 percent year over year in 1Q09, accelerating from the 12 percent decline experienced in 4Q08 and representing the lowest quarterly server shipment total in five years and the largest ever year-over-year quarterly server unit decline.
Volume systems experienced the sharpest decline, with year-over-year revenue slipping 30.5 percent. Midrange enterprise demand weakened, with a year-over-year decline of 13.6 percent, and the slowdown extended to the high-end enterprise segment, as revenue declined 19.5 percent when compared to 1Q08. This is the second consecutive quarter and only the second time since 2002 that all three server segments have experienced a year-over-year revenue decline in the same quarter.
"Market conditions worsened in all geographic regions during the first quarter as customers of all types pulled back on both new strategic IT projects and ongoing infrastructure refresh initiatives," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Most enterprise organizations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilization. IDC believes that while these strategies are effective in the near term, server demand will begin to improve in the second half of the year as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010."
Overall Server Market Standings, by Vendor
HP and IBM jointly held the number 1 position* in the worldwide server market in the first quarter, each with 29.3 percent share and IBM gaining 1.7 points of share and HP losing 0.7 points of share year over year. For IBM, this growth was driven by a solid performance in its System z and System p server businesses. Sun and Dell finished the quarter in a statistical tie* for the number 3 market position with Dell's server revenue declining 31.2 percent year over year and capturing 11.0 percent share in 1Q09. Sun's server revenue declined 25.5 percent year over year, ending with 10.3 percent revenue share. Fujitsu/Fujitsu-Siemens maintained its fifth-place standing in terms of factory revenue, with 6.7 percent market share in the quarter.
Top Server Market Findings
The market for non-x86 servers, including servers based on RISC, EPIC, and CISC processors, declined 19.4 percent year over year to $4.8 billion in 1Q09. This is the fifth consecutive quarter that non-x86 servers have out performed x86 servers in the market. IBM maintained its leadership position, posting 42.8 percent share in this segment, followed by Hewlett Packard (21.8 percent) and Sun Microsystems (18.2 percent), respectively, based on factory revenue.
Unix servers experienced 17.5 percent revenue decline year over year when compared with 1Q08. With particular resilience in the midrange enterprise segment of the market, worldwide Unix revenues were $3.3 billion for the quarter, representing 33.1 percent of quarterly server spending. IBM assumed the 1Q09 leadership position, posting 31.0 percent share in this segment, followed by Sun Microsystems (27.7 percent) and Hewlett Packard (27.7 percent), respectively, based on factory revenue.*
IBM's System z servers running the z/OS operating system outperformed the worldwide server market for the fifth consecutive quarter, with an 18.9 percent year-over-year decline to $889 million. z/OS servers accounted for 9.0 percent of all server revenue in 1Q09, the highest first quarter revenue share for IBM's System z in five years.
Microsoft Windows server revenue was $3.7 billion in 1Q09 showing a 28.9 percent year-over-year decline and comprising 37.3 percent of all server revenue in the quarter.
Linux server revenue comprised 13.8 percent of server revenue in 1Q09, declining 24.8 percent year-over-year to $1.4 billion, its lowest revenue level in five years.
x86 Industry Standard Server Market Dynamics
The x86 server market decelerated sharply in 1Q09, declining 28.8 percent in the quarter to $5.1 billion worldwide as unit shipments declined 26.3 percent to 1.4 million servers. This is the lowest x86 server revenue since 3Q03, with the top 5 server vendors all experiencing x86 server revenue declines of 20 percent or more in the quarter. HP led the market with 36.5 percent revenue share and Dell retained second place, securing 21.4 percent revenue share.
"x86-based volume servers, historically an area of growth for the industry, posted another quarter of significant weakness during the first quarter of 2009," said Dan Harrington, research analyst in IDC's enterprise server group. "However, while it may be easier for IT departments to suspend purchases of commodity boxes as opposed to more mission critical RISC- or CISC-based servers, IDC expects x86 systems to rebound faster than the overall market in the coming quarters."
Bladed Server Market Results
The blade server market segment decelerated sharply in 1Q09, experiencing negative quarterly growth for the first time, with factory revenue declining 14.4 percent year over year on a 18.1 percent year-over-year shipment decline. Overall, bladed servers, including x86, EPIC (Itanium-based) and RISC blades, accounted for $1.1 billion in the first quarter, representing 11.0 percent of quarterly server revenue. HP maintained the number 1 spot in the blade market with 52.2 percent market share in 1Q09.
"Even though the blade market experienced negative growth, the segment still increased its share of revenue of the overall server market," said Jed Scaramella, senior research analyst in IDC's Datacenter and Enterprise Server group. "Customers are seeking IT solutions that reduce expenses and improve efficiencies. The integrated nature of the blade platforms is adept to deliver a dynamic IT infrastructure."
Unix Server Spend Increasing, As Percent of Total IT Spend
Although year-over-year Unix server revenue declined in the quarter, Unix servers represented a greater percent of total IT spend in 1Q09 (33.1 percent of worldwide server spend) than in 1Q08 (30.2 percent of total server spend). "IDC believes that lengthening server lifecycles in the datacenter, especially for scalable midrange and high-end servers, affected Unix server sales, in terms of declining revenue and unit shipments in the first quarter," said Jean S. Bozman, research vice president, Enterprise Platforms group. "However, their strong contribution as a percent of first quarter worldwide server spend reflects the presence of midrange and high-end systems carrying higher average sales prices (ASVs), and the bifurcation of the market into low-cost and high-end systems, based on specific workloads, such as large corporate databases, transaction processing and business intelligence (BI)."
Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, First Quarter of 2009
(Revenues are in Millions)
| Vendor | 1Q09 |
|
| 1Q09 |
|
| 1Q08 |
|
| 1Q08 |
|
| 1Q09/1Q08 |
|
| Revenue |
|
| Market |
|
| Revenue |
|
| Market |
|
| Revenue |
|
|
|
|
| Share |
|
|
|
|
| Share |
|
| Growth |
| 1. Hewlett-Packard | $2,913 |
|
| 29.3 percent |
|
| $3,946 |
|
| 30.0 percent |
|
| -26.2 percent |
| 1. IBM | $2,904 |
|
| 29.3 percent |
|
| $3,624 |
|
| 27.6 percent |
|
| -19.9 percent |
| 3. Dell | $1,093 |
|
| 11.0 percent |
|
| $1,590 |
|
| 12.1 percent |
|
| -31.2 percent |
| 3. Sun Microsystems | $1,018 |
|
| 10.3 percent |
|
| $1,367 |
|
| 10.4 percent |
|
| -25.5 percent |
| 5. Fujitsu/Fujitsu Siemens | $667 |
|
BLOG COMMENTS POWERED BY DISQUS
Book ReviewsResource Center
|
Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.
IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn:
LATEST COMMENTS
MC Press Online