Server Markets: Falling But Stable
Added 22nd Jun 2009This represents the fourth consecutive quarter of year-over-year spending decline for servers and a further acceleration in the pace of worldwide market deterioration.
In total, IDC forecasts that the market will see eight quarters of year-over-year revenue declines and expects annualized 4-quarter rolling server spending will drop by 30.3 percent or $19.1 billion (about Rs. 95500 crore) during the 2Q08 to 2Q10 period. Additionally, IDC believes 2Q09 represents the largest year-over-year server sending decline the market will experience in this negative business cycle as the rate of market decline improves significantly in the second half of 2009 and early 2010.
"IDC has lowered its 2Q09 forecast by 8.5 percent or nearly $1 billion (about Rs. 5000 crore) from our previous forecast as the depth of the worldwide recession increased in the first half of 2009," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Although we are now forecasting a 22.1 percent year-over-year decline in server spending for 2009, the worst of the market contraction is behind us. In fact, by the end of the third quarter this year, nearly 90 percent of the cumulative market contraction will have been realized as the market begins exhibiting significant signs of stabilization. It's important to note that IDC believes many IT users will begin making strategic compute platform decisions during the remainder of 2009 in advance of improving business conditions and server demand in 2010."
In calendar year 2009, spending on volume systems will decline 21.5 percent year over year on an 18.5 percent year-over-year decline in unit shipments as market conditions for the segment begin to improve modestly in the second half of 2009. Midrange enterprise demand is expected to weaken in 2Q09 with 2009 spending down 9.6 percent year over year. High-end enterprise spending is forecasted to decline 35.2 percent year over year in 2009 as capital budgets in large enterprises remain constrained throughout the year. In total, server spending is forecasted to be down 22.1 percent year over year in 2009 on an 18.3 percent year over year decline in units.
IDC's Server Taxonomy
IDC's Server Taxonomy maps the eleven price bands within the server market into three price ranges: volume servers (servers priced less than $25,000- about Rs. 12,50,000), midrange enterprise servers ($25,000 to $499,999- between Rs. 12,50,000 and Rs. 2,49,99,950) ), and high-end enterprise servers ($500,000 or more, about Rs. 2,50,00,000). The revenue data presented in this release is stated as customer revenue for a server system. IDC presents data in terms of customer revenue, or end-user spending, to better represent the total amount of spending in the server market for forecasting purposes. Customer revenue represents the amount of money paid by end users for products and IDC uses customer revenue to illustrate our server forecasts because many of our clients find spending to be a more useful concept than vendor revenue for market planning.
IDC's Worldwide Quarterly Server Forecast is a quantitative tool for analyzing the global server market on a quarterly basis. The Tracker includes quarterly shipments (both ISS and upgrades) and customer revenue, segmented by region, operating system, price band, form factor, CPU type, and architecture.
