Public sector spending freeze hits UK server sales

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Public sector spending freeze hits UK server sales

Microscope contributor

Austerity measures in the UK public sector resulted in more modest sequential x86 server sales growth in Q2, according to IDC.

Shipments declined 9.3% on the last quarter to 74,000 units and were up only 17.9% on the year ago period when sales bottomed out.

"There was some softness in the market," said Nathaniel Martinez, IDC programme director for European server research. "The feedback from vendors was that they saw massive cuts in public sector spending."

Ironically, while the government was tightening its belt the banking vertical, which caused the global economic crisis, continued to recover with spending holding up in the quarter, he added.

Refresh cycles were also witnessed in the Manufacturing sector and the green-field Telco space as cloud providers build the infrastructures on which to base their services.

Rack unit sales were up 15.3% to represent more than half of the UK market as blades grew 57% to account for nearly 30% with the remainder made up by Tower sales, which declined 2.2%.

HP consolidated its lead at the top of the UK server market with growth of 22.4% but Dell - which also lost ground in the PC space recently - could not mirror the traction it gained in Q1 as growth slowed to 6.7%.

Martinez at IDC suggested that Dell had "suffered from the poor level of sales activity in the public sector and not as well positioned in the telco space as HP."

The recovery in IBM's System x business was apparent as sales grew 27%, while Fujitsu, which has made infrastructure products a strategic priority, grew 46%.

However, Sun Microsystems shipments declined 15%, suggesting that the company is sticking to its promise of steering clear of a bun fight in the low-end of the market.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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