Worldwide server market declines 7.7%

Revenues from server shipments dropped by 7.7% year-on-year to $US10.9 billion during the first quarter of 2013, marking the fifth decline in the past six quarters.

The IDC figures show the revenue drop was partly due to a 39% drop in shipments to 1.9 million for the quarter.

There was a 17.1% decline in high-end system revenues and an 18.3% decline in mid-range systems, while the low end of the market witnessed a much smaller fall of just 3.1%.

HP led the market with 26.9% marketshare, followed by IBM (25.5%), Dell (18.5%), Fujitsu (5.1%), Oracle (4.8%) and Cisco (4.1%).

“Customer demand for new servers is being impacted by ongoing server consolidation, technology transitions, and challenging macroeconomic conditions across the globe. In fact, every geographic region except Asia-Pacific experienced revenue contraction in the quarter,” says Matt Eastwood, IDC enterprise platforms general manager.

“It is clear that challenging market conditions are increasing the competitive dynamics for server market share globally, particularly since compute represents a critical element of larger IT transformations that continue to reshape broader enterprise IT market opportunities.”

The declines are a further blow to companies such as HP and Dell, which are struggling to gain a foothold in the tablet and smartphone markets while PC sales decline.