EMEA server market to continue to decline until mid-2010

Latest IDC EMEA server forecast shows 39.3% drop in revenues in second quarter

Tags: Economic crisisIDC Middle East and AfricaUnited Arab Emirates
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By  Mark Sutton Published  June 27, 2009

Server revenue in the EMEA region will continue to decline in the second calendar quarter of 2009, according to IDC’s Quarterly Server Forecast.

The analyst company says that server revenue for the quarter will be down to $2.9 billion, a 39.3% drop from the same quarter in 2008.

The drop represents the fourth consecutive quarter of year-on-year decline, with no return to growth expected until the third quarter of 2010.

Nathaniel Martinez, IDC program director for European Systems and Infrastructure Solutions commented: “In 1Q09, every sector of the economy felt the pressure of the global crisis, with most of the countries in Western Europe heading into recession and economies in Eastern Europe often paralyzed by the credit freeze. IDC has lowered its forecast expectations to reflect the full impact the deepening recession has had on the server market.”

The decline in demand will be reflected more in revenue numbers rather than than shipments, due to an ongoing trend for lower value of shipments. Revenue decline is expected to hit the bottom in 1Q10, at $2.6 billion, although buyer sentiment and interest are expected to be more positive by end of 2009.

The x86 server market is expected to be least affected by revenue decline, owning to demand for blade servers, although the lower end of the market will continue to take market share from the higher end as companies look to lower priced solutions.

Giorgio Nebuloni, research analyst, European Systems and Infrastructure Solutions said: “Increased consolidation, rationalization needs, and budget constraints within companies will play a major role in shaping server demand. On the other hand, non-x86 revenue, whose decline will remain in the double digits in 1Q10, will make a decisive comeback in the second half of 2010 due to pent-up demand for specific scale-up refreshment projects in the corporate space.”

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