Server factory revenues contract during first quarter

The worldwide server market has continued to contract during the first quarter of 2002 as IDC reports that revenues have declined by around 20%.

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By  Matthew Southwell Published  June 5, 2002

The worldwide server market has continued to contract during the first quarter of 2002, according to IDC. The analyst house reports that as capital spending continued to remains elusive revenues have declined 20% from US$13.4 billion in 1Q01 to US$10.7 billion in 1Q02.

Despite this contraction, Vernon Turner, IDC's Group vice president of Global Enterprise Server Solutions, remained positive, as he believes the market is improving.

“Relatively flat sequential growth for Sun Microsystems, Dell, and Compaq’s Industry Standard Server Group all help point to firming conditions for the volume server market and a return to a more predictable demand,” he says.

Mark Melenovsky, IDC’s research manager for Server and Infrastructure Hardware research also believes that things are looking up. He says new technologies, such as Blade servers, will encourage market growth.

“The Blade server market started the first quarter with a nice baseline… Especially strong demand for this new form factor was documented in Western Europe, particularly in high performance clustered environments,” he says.

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