Server Sales Hit the Skids

Arthur Cole

The latest figures for the server market are in, and they're not pretty.

While many observers expect new technologies like virtualization to eat into server sales, fourth-quarter results were a shocker. Gartner saw shipments drop by 11.7 percent compared with the same period last year, with revenues dropping 15.1 percent. IDC saw a 12 percent drop and revenues down by 14 percent.

The weak economy was probably the main contributing factor in the drop. If that is the case, don't expect the numbers to pick up until late 2009 at the earliest, and probably not until mid-1010, according to analysts at both firms.

The slide hit virtually all categories of server. Volume sales dropped 17 percent in IDC's view, with mid-range models dropping 14.5 percent. Even the more resilient high-end systems like mainframes and Unix server stumbled by 7.5 percent. All three sectors hadn't seen a same-quarter decline since 2002.

Only blades showed some life during the period. Gartner had the market growing 30 percent in both revenues and shipments, while IDC reported only 16.1 percent growth for revenue and 12.1 percent growth in shipments.

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