Worldwide server revenue drops 7.7% in Q1, says IDC. Dell, on the strength of its data center products, was the market's best performer.
The worldwide server market suffered a 7.7% drop in factory revenue in the first quarter of this year, according to a report published Wednesday by research firm IDC. Revenue dropped for the fifth time in the last six quarters, pulled down by not only economic forces but also a shift toward more efficient and agile data center technologies.
HP claimed the leading position, snaring 26.9% of the market's total factory revenue, but the news was still mostly bad for the company. Its 14.8% downtick in revenue was almost twice as severe as the industry's already-lousy overall average, and its revenue share was down from Q1 of last year, when it held 29.2% of the market. IDC attributed the losses to diminished interest in HP's x86-based ProLiant servers, which have ceded territory to more aggressively priced competitors.
IBM was second, with 25.5% of the market, down from 27.2% last year. IDC blamed the company's 13.4% revenue drop on decreased demand for not only Power Systems servers, which compete with HP's Itanium systems, but also the x86-based System x line.
In third place, Dell was arguably the market's best performer. The company, embroiled in falling PC sales and buyout drama, claimed 18.5% of all factory revenue, up from 15.5% during the same period last year. The company's revenue was up 10.1%.
Fujitsu, Oracle and Cisco landed in a statistical tie for fourth place. For the first two companies, the news is dispiriting; Fujitsu's factory revenue was down 8.5%, and Oracle's was down 26.2%. For upstart Cisco, though, revenue increased 34.9%, partly on the strength of blade server revenue.
In a statement, IDC analyst Matt Eastwood noted that tough economic conditions contributed to the sluggish market. He pointed out that, with the exception of the Asia/Pacific region, every geographic territory recently suffered revenue contractions.
But IDC concluded that technological forces were at work as well. Revenue from data-optimized servers was up 54.8%, for example, and unit shipments were up 39.3%. The category now represents 11.2% of all server shipments. IDC estimates that Dell commands 47.3% of the revenue in this space, whose popularity has risen as cloud-based deployments have increased.
The demand for Unix servers, meanwhile, declined 35.9%, its seventh consecutive quarter of drops.
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