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IDC slashes UK server outlook after slow start to 2009

Microscope contributor

Resellers surviving on hardware run rates should take note that IDC has forecast a dramatic downturn in the fortunes of the UK server market this year, with SMEs and large enterprises spending even more cautiously than first anticipated.

The analyst reckons UK server revenues will drop 27% this year and shipments will tumble 16%, as all industries led by the banking and manufacturing sectors hold on tight to their wallets.

“Based on our data in the first quarter we anticipate a massive drop in the market this year,” Nathaniel Martinez, IDC programme director for European server research told MicroScope.

Virtualisation was compounding the general slowdown incorporate sales as “the rate of deploying new servers when implementing virtualisation is getting lower and lower”, he said.

Other corporate and SME customers were freezing spending plans and lengthening upgrade cycles, the analysts added and sales across all form factors including blades would be down this year.

Customers continued to focus on core virtualisation projects with some pull through for servers and storage, said Mike Rodwell, commercial director at Computacenter but he agreed all were spending more cautiously.

“In the current climate we are seeing any discretionary spend kept to a minimum and new projects are going through significant diligence internally before they are approved,” he added.

The numbers forecast by IDC resonated with Tom Kelly, UK managing director at Logicalis.

“I think the industry will need to accept that for this calendar year the market will be about 20% down and cost bases will need to be managed accordingly,” he said.

Last month, Greg Davis, head of Dell global partner network said resellers that would succeed are those with skills in selling solutions around virtualisation, power and cooling, security or recovery and back-up.

“Those solutions show strong ROI and right now if customers are going to spend money they are looking for very solid ROI,” he said.

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