Server Spending Slows, But Blades Benefit

Worldwide server unit shipments in the fourth quarter of 2008 declined 12 percent from a year earlier, while revenue was down 14 percent to $13.5 billion, according to new data from IDC.  “All server vendors, geographies, and technology segments were impacted significantly as the global recession gained momentum and market conditions weakened as the quarter progressed,” said Matthew Eastwood, group vice president of IDC’s Enterprise Platforms Group. “It now appears the slowdown will worsen before any improvement is seen in late 2009 or early 2010.”

IBM maintained the lead in overall server market share with 36.3 percent, according to IDC, followed by HP (29.0 percent), Dell (10.6 percent) and Sun Microsystems (9.3 percent).The only sector of the server market to see unit growth was blade servers, where revenue grew 16.1 percent year-over-year on shipment growth of 12.1 percent. Blades now represent 10 percent of the server market’s revenue, with HP holding leading with a 54.8 percent market share, followed by IBM at 21.7 percent.

“While the x86 market declined double digits, blades remained a bright spot as the only section of the market showing positive unit growth, gaining 8.8 percent over those shipped in the fourth quarter of 2007,” said Dan Harrington, research analyst, IDC’s Enterprise Platforms Group. “End users continue to invest in blades as an attractive option due to their TCO advantages and energy efficiency benefits.”

The focus on efficiency will continue to prompt companies to seek ways to optimize their data center costs, according to Eastwood. “In the near term, IT customers will increasingly look for IT optimization projects with strong ROI potential and extend virtualization, consolidation, and migration programs in order to lower capital and operational costs while improving efficiencies.”

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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