Server sales continue to plummet

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Sales of servers worldwide fell by 30.1 percent year on year during the second quarter of 2009, according to the latest survey from IDC.

It's the fourth consecutive quarter that revenues have fallen and the lowest revenues from the sector since IDC started watching the market in 1996.

All classes of servers were affected - volume systems fell, year on year,  by 30 percent, and midrange enterprise revenue by 28.1 percent. High end server sales were also affected to the tune of a decline of 32 percent, year on year.

But the continuing decline in server sales gives some room for optimism, according to Matt Eastwood, a senior analyst at IDC. "Fewer servers have been shipped over the past four quarters than at any time since 2005 and it is clear that the worldwide server installed base is aging rapidly," he said.

"IDC believes that IT customers around the globe will begin to focus on the future once again, making strategic compute platform decisions for the next business cycle," he said. That means companies will buy more servers and IDC believes that the market will stabilize in the second half of this year.

Overall, IBM rules the server roost with 34.5 percent share, HP has 28.5 percent share, Dell and Sun are number three and four with 12.4 percent and 10 percent factory revenue share.

But there's servers and servers. Non X86 servers, based on RISC, EPIC and CISC fell 32.2 percent year over year. IBM has 53.3 percent share here, followed by HP with 19.2 percent share and Sun with 17.3 percent share.

Microsoft Windows based servers suffered a 27.7 percent decline year over year. Linux server revenue fell 28.9 per cent year on year. Unix servers fell 30.9 percent year on year.

The X86 server market stayed weak in the second quarter, although IBM managed to grow its share. IDC thinks that because large organizations budgets have been trimmed, they've been waiting for the latest AMD Istanbul and Intel Nehalem server CPUs to ship.