Worst may be over despite EMEA server sales decline in Q3


Worst may be over despite EMEA server sales decline in Q3

Microscope contributor

Revenue from European server sales fell more than 25% in the third quarter but sequential growth from the second quarter has led market research company IDC to suggest the “worst may be over”.

According to IDC,server revenue in EMEA for the third quarter fell to $2.9bn and just under a quarter less units were shipped in the period. But a sequential rise of 1.9% in revenue and 8.4% in units was the first in the market since the fourth quarter of last year.

Beatriz Valle, IDC analyst for European Systems and Infrastructures Solutions, admitted the sequential growth was “very subdued”.

But added that server vendors were “hopeful that things will pick up in the fourth quarter, which is traditionally strong in the corporate space due to end-of-year budget renewals”.

She stressed that the performance of the market in the fourth quarter would be “critical to measure where the market is heading in the medium term”.

The sequential rise in revenues and units was also reported in Gartner’s recent report on the worldwide server market’s performance in the third quarter.

HP led the market, despite a 24% fall in revenue with IBM in second place. Sun recorded the biggest revenue decline (down nearly 42%) while Fujitsu’s revenue fell 33%.

IDC reported market momentum was in favour of x86 servers with revenues reaching $1,7bn, rising 16.7% sequentially, compared to $1.2bn for non-x86 products, down 14% sequentially.

But there was a huge difference in average sale price between the two platforms demonstrated by the fact non-x86 servers accounted for 41% of server revenue but made up only 2.7% of all servers shipped in EMEA.

Nathaniel Martinez, director of IDC European Systems and Infrastructure Solutions, said there had been better than expected performance in the UK,Germany and Spain.

The overall EMEA server market environment remained “challenging” but “platform migrations, consolidation projects and datacenter rejuvenation investments are bringing some activity to the market”.

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