Server market growth at weakest since downturn

28 Aug 2006

Server sales in the EMEA (Europe, Middle East and Africa) region declined 2.3pc in the second quarter of 2006 despite shipments rising 7.7pc to hit 563,000 units, IDC has revealed.

IDC said that western Europe only partially recovered from the disappointing revenue performance of the previous quarter, with growth rates at their weakest point since the server market downturn of 2002.

Revenues declined 3pc over the same period last year but grew marginally on a sequential basis.

“For western Europe, shipments reached 434,000 units, a 5.3pc annual growth,” said Beatriz Valle, research analyst, IDC. “This was a slower rate than in previous quarters but a positive indication that prices are not plummeting as once feared and the erosion of margins is being temporarily alleviated by RISC Unix-based upgrades in the high-end space.”

Central and eastern Europe was the strongest sub-region in shipments and factory revenue, growing 17.5pc over the same quarter in 2005.

Stefania Lorenz, programme manager at IDC, added: “Purchases are being made in the public and private sectors and spending is being fuelled by economic stability as well as the inflow of foreign direct investment and the booming small and medium business (SMB) segment, most of which relies on very basic infrastructures.”

Hewlett-Packard continued to be the top vendor in EMEA, selling close to 225,000 units, which generated US$1.2bn in revenue. IBM held on to its 30pc revenue share.

Sun Microsystems achieved the highest revenue growth in EMEA in Q2, increasing sales 7pc from US$516m in the same quarter in 2005 to US$555m, largely due to the introduction of new Opteron- and SPARC-based servers.

As the only pure x86 top-tier player, Dell increased its revenues by 1pc over the year-ago period.

Fujitsu Siemens Computers recorded the weakest performance as spending on its servers declined by 14pc, with the vendor losing one percentage point over the year-ago period.

Linux servers are approaching the half-billion landmark, reaching US$460m in EMEA, a sales increase of 34pc over the year-ago period, while Windows suffered a decline of 2pc, generating US$1.2bn in the second quarter of 2006, and Unix systems declined 9pc to US$1.4bn.

IDC said this indicates that both Linux and Windows server operating systems are stealing market share from Unix.

By John Kennedy