Server sales down for the third quarter in a row

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Sales of servers have dropped for the third consecutive quarter, according to a report from IDC.

IDC reported a decline in revenue for the first quarter of 24.5 per cent year over year to $9.9 billion (£6.1 billion). This is the lowest that quarterly server revenue has been since IDC began keeping track 12 years ago.

Shipments of servers during the first quarter also dropped by 26.5 per cent, the lowest in the last five years.

Matt Eastwood, group vice president of Enterprise Platforms for IDC, said: "Market conditions worsened in all geographic regions during the first quarter as customers of all types pulled back on both new strategic IT projects and ongoing infrastructure refresh initiatives."

"Most enterprise organisations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilisation.”

The leaders in the market were HP and IBM in joint first followed by Sun and Dell in joint third, although Dell’s server revenue declined by 31.2 per cent.

It is not all bad news though, as IDC does not think this trend will continue.

Eastwood said: “IDC believes that while these strategies are effective in the near term, server demand will begin to improve in the second half of the year as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010."

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