Server sales collapse may soon stabilise

Server sales around the world are down, particularly in large enterprises

Server sales are set to stabilise worldwide following a bigger collapse than expected in server spend this year, according to IDC.

IDC's Worldwide Quarterly Server Forecast today found that customer spending in the worldwide server market is expected to decline 29.6 per cent to $10.6bn in the second quarter of 2009.

Matt Eastwood, group vice president of enterprise platforms at IDC, said the company had lowered its second quarter forecast 8.5 per cent or nearly $1bn from its previous prediction.

“[However] although we are now forecasting a total 22.1 per cent year-over-year decline in server spending for 2009, the worst of the market contraction is behind us,” said Eastwood.

“In fact, by the end of the third-quarter this year, nearly 90 per cent of the cumulative market contraction will have been realised as the market begins exhibiting significant signs of stabilisation.”

He said that spending on volume systems will fall by 21.5 per cent year over year on an 18.5 per cent year-over-year decline in unit shipments. But market conditions for the segment begin to improve modestly in the second six months.

Mid-range enterprise demand is down by 9.6 per cent year over year. High-end enterprise server spend is collapsing 35.2 per cent year over year, while total server spend by units is down by 18.3 per cent.