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EMEA server markets down in Q1 2012

IDC says server shipments and revenues both dropped in first quarter

EMEA server markets down in Q1 2012
Server shipments were down due to economic turmoil in EMEA.

EMEA server markets slipped in the first quarter, with both shipment numbers and revenue down year-on-year and sequentially, according to figures from IDC.

The IDC EMEA Server Tracker showed revenue down 11.9% from the same quarter last year, to factory revenues of $3.1bn, which also marked a 23.9% from the first quarter. Shipment numbers were down 3.8% year-on-year to 556,877, and 13.1% from Q1.

The market saw the second consecutive quarter of annual revenue declines, and the first double-digit decrease since Q3 2009, caused by the overall harsh economic environment.

"EMEA server vendors in 1Q12 continued to face up to a number of market challenges, compounded by a very difficult economic environment. Overall, the EMEA server market in 1Q12 was in line with IDC expectations and presented a very mixed picture in terms of server spending, with countries across the region showing important discrepancies in terms of trends. Large HPC projects and investments in public cloud infrastructures from hosters and Web 2.0 players and private cloud infrastructure projects in the large enterprise continue to play out significantly in those differences," said Nathaniel Martinez, research director in the Enterprise Server Group for IDC EMEA.

Sales of x86 servers made up 73% of total market value, at $2.2bn, while non-x86 were down 28.7% to $841.9m.

The Central and Eastern Europe, Middle East and Africa region (CEMA), saw mixed results by country, although the region was down overall by 3.7% to $752.96m.

Jiri Helebrand, research manager, IDC CEMA commented: "Central and Eastern Europe, the Middle East, and Africa [CEMA] combined recorded the first negative quarter in over a year and 1Q12 resulted in a 3.7% year-on-year decline totaling $752.96 million. An uncertain economic environment, coupled with austerity measures in the public sector across many countries in the region, had an adverse effect on server demand. Despite the overall unfavorable economic conditions, Central and Eastern Europe [CEE] remained positive. Strong server sales in Russia helped to offset shrinking demand in the rest of CEE, enabling the CEE region to grow 4.0% year on year to reach a total market value of $397.72 million. The Middle East and Africa [MEA] region recorded the third consecutive decline, with server sales at $355.25 million, down 11.0% year on year. Performance across the countries was mixed, with Saudi Arabia and Israel among the countries with positive growth, while Turkey and South Africa recorded double-digit declines."

By device type, blade server shipments were stable, while density optimized machines saw shipments increase. Despite a 0.6% year-on-year decline in sales, Windows was the leading server OS, with 52% of the market, while Linux sales increased 6.5% to $750m, or 20.7% of the total market.

By form factor, racks accounted for 50.5% of the market, tower or standalone servers were 26.6% of the market and blades 19.9%. All form factors saw a decline in shipments, but blades declined the least.

"Approximately 90,000 blade servers were sold in EMEA in 1Q12, with volumes overall stable year on year, thanks to a few large HPC deals with Intel Xeon-based machines in Western Europe. While this helped x86 blade revenue to stay flat year on year, non-x86 blades saw a stark double-digit contraction, leading to a 5% annual decline in overall blade revenue in the region," said Giorgio Nebuloni, senior research analyst, Enterprise Server Group, IDC EMEA.

"Density optimized machines in the meantime are continuing to show strong growth, and doubled their volumes from 1Q11 to reach almost 20,000 units, mostly driven by large cloud service provider installations this quarter. Overall, modular servers - including both blades and density optimized machines - accounted for 20% of the server nodes shipped in the region for each of the past four quarters. This shows that demand for compact, ever more powerful computing solutions is rock solid, but also puts EMEA data centre facilities increasingly under pressure to deliver unparalleled power density on a per-rack and per-square-meter basis," said Nebuloni.

By vendor, HP regained the top spot from IBM, with 38.3% market share compared to IBM's 26.3%. Dell was third with 14% share, followed by Oracle with 7.2% and Fujitsu on 5.8%.

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