According to market research firm IDC, server revenues declined 7.7 percent and server shipments dropped 3.9 percent in the first quarter. Earlier in the week, Gartner said server revenue fell 5 percent and shipments decreased by 0.7 percent.
NetworkWorld's Michael Kan reported, "Server revenue worldwide was down 7.7 percent year-over-year in the first quarter, as weak economic conditions and server consolidation by customers slowed sales, according to research firm IDC. Revenue in the market dropped to US$10.9 billion in the quarter, the fifth-time in the last six quarters the server industry saw year-over-year decline. Server shipments also fell in the period by 3.9 percent year-over-year."
ITProPortal quoted IDC's Matt Eastwood, who said, "Customer demand for new servers is being impacted by ongoing server consolidation, technology transitions, and challenging macroeconomic conditions across the globe. In fact, every geographic region except Asia/Pacific experienced revenue contraction in the quarter. It is clear that challenging market conditions are increasing the competitive dynamics for server market share globally, particularly since compute represents a critical element of larger IT transformations that continue to reshape broader enterprise IT market opportunities."
Jeffrey Burt with eWeek noted, "Hewlett-Packard and IBM continued to lead the worldwide server market in revenues in the first quarter, but both saw their numbers slip, according to figures released by IDC May 29. In fact, the only top vendors who saw revenues grow during the first three months of the year were Dell—due in large part of demand for its low-power, high-density systems—and Cisco Systems and its Unified Computing System (UCS) converged data center solution."
The Register's Timothy Prickett Morgan observed, "By IDCs guesstimations, the Windows server space is still the biggest part of the server market (as Unix was 15 years ago), accounting for 52.2 per cent of all sales and driving $5.7bn in iron. But Windows declined 4.4 per cent in the quarter just the same. That is better than dropping at market rate, mind you, but machines that would ultimately run Linux accounted for $2.5bn in sales, up 3.4 per cent. It is hard to believe that Linux will ever catch Windows, but we'll see how this whole cloud thing plays out in a decade or so."