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  • Gartner Confirms Server Sales Were Awful in Q1

    June 8, 2009 Timothy Prickett Morgan

    If you were hoping that the market researchers at Gartner would somehow have a rosier opinion of how the server market did in the first quarter of 2009–or would somehow forecast that the year would get better than its rival IDC said it would do in last week’s issue–well, you can just forget it. Gartner has been tracking the server racket for longer than IDC, and said the first quarter was the worst one in the history of the business.

    By Gartner’s math, the server business took a 24 percent haymaker to the cut, dropping revenues to $10.1 billion, and shipments fell by 24.2 percent to 1.72 million boxes. Gartner measures server revenues and shipments from vendors or their channel partners into end user accounts, while IDC measures vendor factory revenues. IDC said last week that it reckoned that factory revenues for servers fell by 24.5 percent to $9.9 billion and shipments fell by 26.5 percent to just under 1.5 million units.

    “The significant decline that occurred in the fourth quarter of last year has extended into the beginning of this year,” explained Jeffrey Hewitt, research vice president at Gartner. Hewitt and his team put together the quarterly server numbers at Gartner, which with the IDC numbers are akin to report cards for the vendors and their channel partners. “While this was not unexpected, the severity of the decline was greater than predicted on a worldwide level. The ongoing weakness of the global economy affected all server segments.”

    And all geographies. Gartner said that server revenues in Q1 were down 21.2 percent in the United States, dropped by 33.8 percent in Western Europe, absolutely plummeted by 47.7 percent in Eastern Europe, and were relatively better in the Asia/Pacific region, “only” declining 13.5 percent. When that kind of decline sounds good, you know things are bad.

    As was the case with IDC’s original projections for the first quarter of this year, Gartner said that the results it counted up for server sales and shipments for Q1 were worse than anticipated. And like IDC, Gartner is warning the IT community that it probably won’t get better before 2010.

    “The outlook for 2009 suggests that it will be a weak year on the whole in the server space, and that from a yearly standpoint, the global server market is unlikely to return to a position of growth until 2010,” said Hewitt. So buckle up, people, this ride could get bumpy.

    Gartner doesn’t provide details on server sales by operating system, as IDC does, in its public documents (you have to pay if you want to see that), but it does break it down into X64, RISC/Itanium Unix, and Other. Gartner believes that X64 server shipments fell by 23.9 percent to 1.65 million machines, and revenues declined by 27.1 percent to $5.45 billion. On the RISC/Itanium Unix front, shipments were down by 31.3 percent to 64,510 units, but revenues only dropped by 20.4 percent to $2.95 billion. Other machines accounted for a tiny 7,343 units, down 26.1 percent compared to the first quarter of 2008, but revenues were only down 19.3 percent to $1.76 billion. Mainframes are in this Other category, and maybe IBM‘s Power Systems i boxes are. Maybe not. Gartner doesn’t say.

    Added up across all architectures and geographies, Gartner believes that IBM once again edged out Hewlett-Packard as the top money maker in the first quarter, with $3.12 billion in sales (down 20.4 percent), compared to HP’s $2.92 billion (down 25.8 percent). You can see who is more dependent on the X64 server racket, right? Dell‘s sales came in at $1.24 billion (down 24.7 percent), Sun Microsystems‘ revenues fell to $975.5m (down 26 percent), and Fujitsu rounded out the top five with $598.5m in sales (down only 18.3 percent). All other vendors together comprised $1.31 billion in sales, declining more than the market with a 28 percent drop.

    The second quarter will look as bad. Brace yourself.

    RELATED STORIES

    Server Sales Breakdown Bigtime in the First Quarter

    The Economy Gives the Server Biz a Flat Tire in Q4

    Server Sales Slumped As 2008 Stumbled to the Holidays

    Server Sales Decline in the Third Quarter

    X64 Servers See Pricing Pressure in Q2, Big Box Sales Grow

    Server Buyers Shop Like It’s 1999 in the Second Quarter

    Gartner Revises HP’s Server Sales Downward for Q1

    U.S. Drags Down Server Sales in Q1, But Weak Dollar Helps

    The Server Biz Enjoys the X64 Upgrade Cycle in Q1

    Linux and Windows Server Sales Outpace the Market in Q4

    Gartner Gives Annual Report Cards to Server Makers

    IDC Says Server Buyers Weigh Economy and Power in Q3

    Emerging Markets and Virtualization Drive Q3 Server Sales

    Server Sales in Q2 Reach Heights Not Seen Since 2000

    The Market for Servers in Europe Is Hot

    Virtualization, Consolidation Drive Server Sales in Q1

    Server Sales Up a Bit in 2006, But Q4 Looks a Bit Weak



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    Tags: Tags: mtfh_rc, Volume 18, Number 22 -- June 8, 2009

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TFH Volume: 18 Issue: 22

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    Table of Contents

    • With No Power6 QCMs, IBM Waits for Power7
    • Gartner Confirms Server Sales Were Awful in Q1
    • Manufacturers to ERP Vendors: Give Us More Functionality
    • As I See It: Smarten Up
    • IBM Helps Customers Understand the Cost of Paper
    • More Power Systems Price Changes and Tweaks
    • Write-Downs Hammer Agilysys Financials in Fiscal Q4
    • Arrow Revises Its Fiscal Q2 Outlook Downward
    • Dataram Pushes Entry and Midrange Power System Memory
    • Big Blue Names Eight New IBM Fellows

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    • Big Blue Readies Power10 And IBM i 7.5 Training for Partners
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