Australian server market suffers worst crash in history!

Stan Beer
Wednesday, 03 June 2009 11:12

Your IT - Home IT

Just days after an announcement server sales have crashed elsewhere in the world during the first quarter, the Australian server market has followed suit, suffering its worst decline on record. The contraction, outlined in a new report from IDC was nothing short of breath-taking, completely erasing five years of growth.

Yesterday, iTWire reported that the EMEA server market suffered 34.3 percent drop in the first quarter, the worst result for that region in 13 years.
 
According to IDC's Australia Quarterly Enterprise Server Tracker, the result for Australia was even worse, showing that server and hardware-only makers such as Dell and the now acquired Sun were doing it especially tough in the early months of 2009.
 
IDC's research showed the overall server market in Australia contracted year-on-year with units declining by -38.9% and revenue by -38.8% compared to the first quarter of 2008.

The downturn hit both the proprietary plays like Sun and IBM, as well as the commodity space.
 
The Australian x86 server market shrank to its smallest recorded figure since Q1 of 2004, erasing five years of annual growth. Year-on-year, x86 units dropped -38%, while revenue contracted -46.4% compared to Q108.
 
"The first quarter of 2009 represented the biggest percentage falls witnessed since the server market was tracked by IDC, exceeding the contraction experienced from the dotcom burst. Business confidence is low and spending evaporated accordingly. The market did find some salvation in Government, Health and Education which helped prevent a deeper decline," said Matthew Oostveen, Research Manager, Asia Pacific Enterprise Servers and Datacentres at IDC.
 
Despite the contraction in the market, IDC's research showed no change to the market rankings with HP leading Dell and IBM in the x86 market. A notable performer was Acer which doubled its marketshare of unit shipments (from 2.8% to 6.7%) with success in the Education market, one of the few areas where spending has been sustained.
 
The non-x86 server space which includes RISC, Itanium, and CISC mainframe servers also declined with revenues contracting -26.6% when compared to the first quarter of 2008.
 
IDC's tracker revealed that IBM remains the market leader in non-x86 servers in Australia. Despite the hype surrounding distributed computing methodologies, System Z brand continued to perform strongly.
 
"Looking forward the market should rebound from the Q1 slump in the second quarter, however, IDC doesn't expect to see a return to business as usual just yet. 2009 will remain challenging for vendors and the channel as businesses continue to closely monitor capital expenditure," said Oostveen.
 
New servers based on Intel's Nehalem x86 architecture were released to the market at the start of Q2 which will provide vendors with an opportunity to convince consumers to resume spending. "However, even when the fog of a depressed economy lifts it will be some time before companies are spending freely again," Oostveen added.