Server sales dip

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Server sales dip

Paul Kunert

Shifting dynamics in the server market following the trend of customers consolidating and virtualising their environments saw server sales fall last year but average sales prices rose, according to analyst IDC.

According to IDC data, server shipments in the UK grew 6 per cent to 387,000 in 2007, factory revenue at $2.7bn (£1.35bn) remained flat year-on-year, although it declined 8 per cent when converted to Euros.

Broken down by platform, x86 unit shipments (94 per cent of the entire market) grew 8 per cent - the rate has slowed from 15 to 20 per cent in recent years - while dollar revenues rose 9 per cent. UNIX shipments fell 20 per cent and revenues declined 5 per cent.

"The biggest impact on resellers has been the slowing unit growth rate and the opportunity to increase attach rates," said Nathaniel Martinez, programme director for European server research at IDC.

The move to virtualisation and the need for richer configurations was reflected in average sales price increases on x86 and UNIX systems of 7 and 18 per cent respectively, said the analyst.

Customers were buying fewer UNIX and x86 servers to run multiple workloads and configuring systems with more memory, disk capacity and CPU to run a virtual environment.

"Increased margins are one upside but to be more effective resellers will need to take a more solutions-based approach," Martinez warned.

The trend was set to continue, predicted Terry Walby, storage and data centre technology solutions director at Computacenter.

"The virtualisation environment is becoming more mainstream and resellers will need a higher level of technical understanding to provide design advice and support for customers," he said.

John Osborne, general manager for servers and storage at Computer 2000, said big enterprise solutions were key to its business in the first six months of 2007 but there had been a shift to SME sales in the second half and there was more pressure on price in that period.

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