Server shipments down for the first time in six years

Gartner attributes the 5.8 per cent drop to the economic climate and the uptake of virtualisation, as mature markets look for cost-effective alternatives

The combination of a weakening economy and the uptake of virtualisation has caused regional server shipments to experience a decline for the first time in more than six years.

Gartner’s latest market report found the Asia-Pacific region suffered a decline in shipments of 5.8 per cent year-on-year during Q4, 2008 – the first drop after 27 consecutive quarters of growth. Though shipments still grew by 6.5 per cent through 2008, revenue also dropped by 2.8 per cent over the year.

Year-on-year revenue in Australia and New Zealand for the fourth quarter fell 36.5 per cent, compared with China (-6.7 per cent), India (-18.1 per cent), and Korea (-28.3 per cent).

Gartner research vice-president, Jennifer Wu, said the drop could be attributed to two primary factors.

“A lot of organisations are holding on to their IT budgets in the current economic climate,” she said. “It’s hurt the mature markets the most, which is compounded by the uptake of virtualisation, which is shrinking the consumption of servers in those mature markets.”

2009 will follow a similar trend, Wu said.

“The best scenario we’ve seen is for the market to start to increase in shipments again in 2010,” she said.

x86 servers were the worst hit, suffering a revenue decline of 17.7 per cent and shipments decline of 5.4 per cent during Q4.

Wu said SMBs were spending the least. In contrast, demand for blade servers triggered a shipment increase of 13.5 per cent, driven mostly by large enterprises.

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