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Server shipments down, virtualisation blamed

Virtual massacre
Thu May 28 2009, 13:39

USING IMPECCABLE if slightly banal logic, IDC has declared that the drop in worldwide server shipments resulted in an across the board revenue slump for server makers in the first quarter.

The market research outfit reckons server unit shipments dropped off by a whopping 26.5 per cent year-on-year in Q109 to just 1.49 million units, the steepest slump in half a decade. Similarly, revenue was down 24.5 percent to a paltry $9.9 billion in the first three months of the year.

X86 servers purportedly felt the blow harder than lower-end Unix servers, with x86 revenue falling 28.8 percent to $5.1 billion, whilst non-x86 servers fell by 19.4 percent to $4.8 billion. This, IDC posited, was probably due to the fact Unix OSes deal mainly with mission-critical workloads, rather than faffing about with more generic tasks like e-mail, print and web serving which can easily be virtualised anyway.

Virtualisation, incidentally, is a big reason for the server industry's decline, with even small businesses finding it rather more cost effective to consolidate workloads rather than buy a bunch of marginally more expensive physical servers which also require more costly maintenance and upgrades. As small businesses grow and expand, many are finding virtualisation a more frugal and flexible option moving forward.

Blade servers also took a bit of a tumble in the first quarter, with top blade runner Hewlett-Packard seeing its blades revenue fall by an astounding 26.2 percent to just $2.91 billion.

IDC isn't all doom and gloom about the server market's prospects, however, claiming that the segment should see something of a recovery by the fourth quarter as the recession eases and IT budgets slowly grow back to a shadow of their former size. IBM also saw a steep drop in revenues of 19.9 per cent, whilst Dell was the worst affected vendor with its blade servers suffering a staggering 31.2 per cent revenue slump.

Cutting stuff.


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