City and public sector budget cuts smash server market

IDC figures show continued double-digit declines in western European markets

Shrinking budgets in the public sector and the financial services space put a big dent in the western European server market in 2012's closing quarter, according to numbers from IDC.

The analyst's latest EMEA Server Tracker finds that total Q4 revenue across the region declined 7.4 per cent year on year to $3.8bn (£2.5bn). Shipment volumes fell 11.1 per cent to 569,000. The x86 area held up comparatively well, with sales down 4.9 per cent to $2.6bn, equating to 68.7 per cent of the market. Revenue in the non-x86 segment was down 12.5 per cent.

Beatriz Valle, senior research analyst for IDC EMEA's Enterprise Server Group, claimed that "legacy architectures displayed greater dynamism than we have been used to of late" in the western Europe region during the quarter. However, non-x86 revenue did post a drop of 11.4 per cent in Q4.

"In western Europe, demand in all big three countries was subdued, with double-digit spending declines and high-single-digit drops in spending also for the x86 part," she added. "Public sector spending remains under pressure and financial services organisations are shrinking their IT budgets and driving less demand for server hardware."

In the EMEA vendor league table IBM stretched its lead after suffering less severe declines than its rivals. Big Blue saw sales drop four per cent to $1.35bn, giving it a 35.7 per cent slice of the regional market. HP, in second, is now 2.7 points behind, compared with just 0.3 points in the corresponding period last year. HP saw revenue drop 10.4 per cent annually in Q4 2012.

Third-placed Dell holds 12.8 per cent of the market and saw sales fall a relatively modest 2.6 per cent to $486m, while Fujitsu jumps into fourth after growing revenue by 10.2 per cent to $197.7m, giving it a market share of 5.2 per cent.

Oracle rounds out the top five, but the database giant had another quarter to forget, with revenue slumping 25.5 per cent to $163.2m. Larry Ellison's firm has seen its market share fall from 5.6 per cent to 4.5 per cent in the past 12 months.