Global server revenues plummet

Global server revenues plummet

Friday, 26 February 2010, 02:53 Hrs
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Global server revenues plummet
San Francisco: Although the global server revenue dropped in the fourth quarter, industry trackers Gartner and IDC expect the market to return to growth this year as corporations resume spending on technology. For 2010, Gartner forecast shipment growth in the middle- or high-single digits, with revenue growth at a slightly lower level. IDC did not offer a 2010 forecast.

Revenue in the October-December period dropped 3.2 percent to $12.6 billion, although unit shipments rose 4.5 percent, indicating stiff competition for market share, according to Gartner. IDC said factory revenue globally slid 3.9 percent in the fourth quarter compared with the previous year, to $13 billion, but shipments inched 1.8 percent higher to 1.9 million units in the period. In 2009, overall server revenue fell 18.3 percent, while units fell 16.6 percent, Gartner estimated. IDC put the decline at 18.9 percent to $43.2 billion in 2009, with shipments sliding 18.6 percent to 6.6 million units.

"The recovery that began in the third quarter of 2009 based on x86 servers extended into the fourth quarter," said Gartner analyst Jeffrey Hewitt. X86 servers are low- to mid-range units based on standard industry components. X86 revenue rose 14.3 percent in the fourth quarter, while shipments rose 6.3 percent.

IBM remained the top server vendor on a revenue basis in the fourth quarter, although it lost a percentage point of market share and fell to 32.7 percent, Gartner estimated. IDC put IBM's market share at closer to 35.4 percent globally in terms of factory revenue. Close behind IBM was Hewlett-Packard, which gained more than a point of share. HP is the global leader in servers on a unit basis.

Also Dell had the strongest performance among top vendors in the fourth quarter, with server revenue up 8.3 percent, according to Gartner. Sun Microsystems continued to struggle, with server revenue off more than 20 percent in the final quarter of 2009. The company's acquisition by Oracle Corp closed last month.

"The fourth quarter represents the beginning of a market inflection," said IDC's group vice president of the enterprise servers group, Matt Eastwood. "While many customers sat on the sidelines during 2009, significant innovation continued as server vendors prepared for an expanding market opportunity in 2010 and beyond."

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