Server market dips but is expected to grow

Despite a decline in server shipments in 2009, analyst firm Gartner is predicting growth in the x86 server space.

“This is due to users preference towards Nehalem-based servers,” principal Gartner research analyst, Erica Gadjuli said. “Virtualisation technology may slow down volume growth in high-end servers,”

Server shipments declined by 3.8 per cent in Asia-Pacific market in 2009, according to Gartner. Vendor revenue also collapsed by 6.2 per cent compared to 2008 levels.

However, there was strong growth in Q4 and the Australian and New Zealand server market rebounded representing positive year-on-year growth by 21 per cent.

Unit shipments in Australia declined by 5 per cent, according to principal research analyst, Erica Gadjuli.

“The increase of revenue while shipments decline indicates that higher configuration servers were the preference during the quarter,” Gadjuli said. “Compared to one year ago, it was being driven by virtualisation, new workload in high performance computing and datacentre deployment.”

“Server revenue in Australia saw a rebound in Q4, thanks to active spending by the public sector.”

Most vendors experienced growth expect for Sun Microsystems, which declined by 20.6 per cent compared to last year’s Q4.

IBM led the way, followed by HP and Dell.

Gadjuli expects the Australian server market to grow by another 5 to 7 per cent this year. Revenue should increase by another 5 per cent.

“The majority of revenue growth will come from x86 servers,” she said. “The maturity of the Australian market is limiting growth speed.”

Total server shipments to the Asia-Pacific region during Q4 was 417,531 units. Vendor revenue reached $US2.07 billion. According to Gartner, the Asia-Pacific region emerged as the fastest growing server market in terms of volume. This was driven largely by the x86 segments.

x86 servers accounted for 53.1 per cent of total market revenue in Q4, compared with 46.7 percent in the previous year.

Gartner identified two socket servers were the ‘sweet spot’ during the quarter and one socket servers experienced year-on-year growth.

Gadjuli said the RISC/Itanium Unix server platform will continue to face pressure in the market this year.

Revenues for the RISC/Itanium Unix platform was impacted the most declining by 12 percent from 2008. Blade servers in Asia Pacific recorded a revenue increase of 9.8 percent and shipments were up 8.9 percent for the year.

Asia-Pacific server vendor estimates Q4

By revenue, market share, and growth

• IBM: $US839.5m, 41.8 per cent, 5.8 per cent
• HP: $US 679.9m, 31 per cent, 15.2 per cent
• Dell: $US226.4m, 9.5 per cent, 25.2 per cent
• Sun: $US135.5m, 9 per cent, -20.6 per cent
• Lenovo: $US34.4m, 1.6 per cent, 12.7 per cent
• Others: US158.5m, 7.1 per cent, 17.6 per cent

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