FY 2009 was a lean year for
and in India both href="http://dqindia.ciol.com/content/dqtop20_08/IndustryOverview/2008/108080103.asp">
x86 and non-x86 servers
registered a measly growth of just about 4%. One of the biggest
spoilers last year were verticals like IT, BPO and manufacturing going
slow on purchase of new servers. Looking at 2010, the system vendors
are optimistic about a turnaround in the server market and the growth
far better than last year.
The worldwide server market is showing some signs of stabilization.
Reports from IDC and Gartner suggest that 3Q 09 was a good quarter with
sequential growth. According to IDCs 3Q worldwide server tracker, it
said that the worldwide server market declined 17.3% year over year to
$10.4 billion in the third quarter of 2009 (3Q09). Although this is the
fifth consecutive quarter of year-over-year revenue decline, the market
grew sequentially for the first time since 4Q08. Reflecting on this,
IDC analyst Jed Scarmella, said, “It could be that we are
seeing a return to spending faster than we initially thought, or it
could be that purchases got delayed from Q2 into Q3. We think Q1 and Q2
was the bottom of the recession, and we are on a slow, steady recovery."
Server unit shipments declined 17.9% year over year in 3Q09, a
significant improvement over the 30.1% year-over-year decline
experienced in 2Q09, but grew a healthy 12.4% quarter over quarter--the
largest sequential unit growth since 2005. Meanwhile another report by
Gartner said that the server revenues declined by 15 % globally and
stood at $10.7 billion. Despite the decline it was up by 10.2% compared
to the last quarter.
The 3Q 09 trends suggest that the market exceeded expectations and the
x86 server demands are improving as result of infrastructure refresh.
IDC says that the x86 server revenues experienced their largest
sequential quarterly revenue increase in nearly five years. According
to Matt Eastwood, Group Vice President of Enterprise Platforms at IDC:
"We believe that platform migration is once again gaining steam in the
market and the post-recession server deployment patterns will establish
the technology agenda in the data center for the next business cycle.
For server vendors, after five quarters of market contraction, the next
few quarters will be critical to determining the technology platform
winners and losers in the years ahead.”
The turnaround by end of 2009 was echoed by many vendors during DQ Top
20. Most of them are pitching hard on recession-proof verticals like
education and government and are trying to gain more market share and
value. Specifically, on the x86 side, the coming two quarters are going
to be critical for many vendors to reclaim the lost ground in H2 09.
Server Market Inches Towards Recovery
FY 2009 was a lean year for