Worldwide Server Factory Revenue Declines by 16 Percent

The latest server factory revenue statistics from IDC show a server market that has reversed itself from last year’s double-digit growth and slipped into double-digit decline.

IDC cites the global economic situation as the culprit of the 16 percent decline.

The latest server factory revenue statistics from IDC show a server market that has reversed itself from last year’s double-digit growth and slipped into double-digit decline.

In the second quarter of 2001, worldwide server factory revenue decreased from its second quarter of 2000 peak of $14.4 billion to $12.1 billion.

Like in the first quarter of this year, the United States experienced the most precipitous downturn in the market, with revenue declining 25 percent. During the second quarter,
the slowdown spread to other areas of the world, with most regions experiencing a decline. Revenue in Japan decreased 20 percent, in Canada it decreased 13 percent, in Western Europe 8 percent, in the Asia-Pacific region 3 percent, and in the rest of the world 11 percent.

“Even though we knew that the server market would be affected by the economic situation, we did not expect a decline of this magnitude,” said Vernon Turner, IDC’s vice president of Global Enterprise Server Solutions. “This is the biggest decline that the server market has experienced over the past five years.”

The one market segment where growth continued was in the rack-optimized space. Shipments there increased by 46 percent, resulting in revenue growth of 13 percent. In contrast, revenue in the non-rack-optimized server market fell 23 percent.

“This shows that infrastructure-oriented technology is still being deployed in traditional enterprises,” Turner said.

NetWare-based systems on the other hand showed a much larger revenue decline than any other server platform. Year-over-year revenue comparisons found a 34 percent decrease.

IBM continued to hold its lead over competitors and was the only top-five player to increase its revenue worldwide, exhibiting 5 percent growth. Although Dell avoided declining server revenue, its year-over-year revenue growth was flat. According to IDC’s data, the top-five vendors in the worldwide market based on revenue share were: IBM (26 percent), Sun Microsystems (16.5 percent), Compaq (16.1 percent), Hewlett-Packard (14 percent), and Dell (7 percent).

Although worldwide shipments declined 3 percent to 1.04 million in 2Q01, Dell and IBM increased their shipment counts, with 31 percent and 6 percent growth, respectively. Dell’s strongest growth came from outside of the United States. According to IDC, the top five vendors based on shipment share were: Compaq (25 percent), Dell (17 percent), IBM (14 percent), Hewlett-Packard (10 percent), and Sun Microsystems (7 percent).

IDC’s Worldwide Quarterly Server Tracker provides data about quarterly shipments and revenue. Data is segmented by vendor, family, model, region, operating system, price band, CPU type, and architecture.

To purchase the Worldwide Quarterly Server Tracker, contact Hoang Nguyen at +1 508 935 4718 or hnguyen@idc.com.

Related Stories:
U.S. Economic Slowdown Impacts Worldwide Server Revenue
Decline in U.S. Server Sales Pulls Down Worldwide Server Market
Latin America Server Market Yields Mixed Bag for Second Quarter