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Gartner Confirms Server Sales Were Awful in Q1

Submitted by Administrator on Tuesday, 9 June 2009No Comment

If you were hoping that the market researchers at Gartner would somehow have a rosier opinion of how the server market did in the first quarter of 2009–or would somehow forecast that the year would get better than its rival IDC said it would do in last week’s issue–well, you can just forget it. Gartner has been tracking the server racket for longer than IDC, and said the first quarter was the worst one in the history of the business.

By Gartner’s math, the server business took a 24 percent haymaker to the cut, dropping revenues to $10.1 billion, and shipments fell by 24.2 percent to 1.72 million boxes. Gartner measures server revenues and shipments from vendors or their channel partners into end user accounts, while IDC measures vendor factory revenues. IDC said last week that it reckoned that factory revenues for servers fell by 24.5 percent to $9.9 billion and shipments fell by 26.5 percent to just under 1.5 million units.

server-room

“The significant decline that occurred in the fourth quarter of last year has extended into the beginning of this year,” explained Jeffrey Hewitt, research vice president at Gartner. Hewitt and his team put together the quarterly server numbers at Gartner, which with the IDC numbers are akin to report cards for the vendors and their channel partners. “While this was not unexpected, the severity of the decline was greater than predicted on a worldwide level. The ongoing weakness of the global economy affected all server segments.”

And all geographies. Gartner said that server revenues in Q1 were down 21.2 percent in the United States, dropped by 33.8 percent in Western Europe, absolutely plummeted by 47.7 percent in Eastern Europe, and were relatively better in the Asia/Pacific region, “only” declining 13.5 percent. When that kind of decline sounds good, you know things are bad.

As was the case with IDC’s original projections for the first quarter of this year, Gartner said that the results it counted up for server sales and shipments for Q1 were worse than anticipated. And like IDC, Gartner is warning the IT community that it probably won’t get better before 2010.

“The outlook for 2009 suggests that it will be a weak year on the whole in the server space, and that from a yearly standpoint, the global server market is unlikely to return to a position of growth until 2010,” said Hewitt. So buckle up, people, this ride could get bumpy.

The second quarter will look as bad. Brace yourself.

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