Returning confidence lifts server sales

Returning confidence lifts server sales

Gartner report reveals server sales improving

Several integrators and distributors are claiming a return of business confi dence is starting to drive an uptick in infrastructure hardware spending.

A Gartner report released last week found Australian server sales improved during the second quarter of the year against tougher regional conditions. According to its fi gures, Asia-Pacific experienced a 17.2 per cent year-on-year decline in server shipments. Server vendor revenue was also down 15 per cent over the same period to $US1.71 billion. However, the Government stimulus plan saw Australia buck the trend and chalk up revenue decline of just 2.5 per cent. Revenue also doubled between Q1 and Q2, 2009.

Data#3 general manager, marketing and alliances, Mark Phillips, said that while business had been down in both PC and server segments, there were early signs of an uptick in the server market.

“We’re seeing an increase in interest in the x86 and blade environment as organisations look to consolidate down from the big box servers,” Phillips said. “We see things improving macro economically going forward. It’s not going to be a swift and signifi cant process, but we’re not looking at a declining market.”

Ethan Group client business manager, Shadi Haddad, said the integrator had witnessed a rise in spending stability across both corporate and government customers. Ethan predominantly plays in the x86 space, he said, which had seen an increase as customers looked to virtualisation and consolidation. At the same time, some customers were buying the chunkier hardware.

“What we’re seeing in the market is a normalising from an engagement cycle perspective,” Haddad said. “Before, people were staying away and resisting spending. There’s more engagement now – people are back.”

He expected things to normalise over the next 18 months as confi dence continues to come back. Distributors, too, are seeing an upswing in server business. Avnet general manager, Gavin Lawless, said it had been a tough time for most product categories from January-May as organisations held off spending and made do with existing technology.

“The reality is we’ve been through a very tough time, but humans are infl uenced by their surroundings, and they are opening their newspapers to see report after report about how the economy has bottomed out,” he said. “The economic sentiment is much better now.”

Lawless predicted the market would continue to improve going forward, with little expected change to current trends.

“There has been a general shift to x86 servers for the past year or two,” he said. “That will continue, although there is still a good market for Unix systems. I don’t think the economic climate will cause any major shift in market trends.” itX general manager, Greg Newham, was also optimistic about the market conditions and said business was going well.

“People are quoting our server vendor, Sun, more often and we’re getting bits of business from a wide range of verticals,” he said. “Government spending got turned back on in Q4 of the financial year, and the x86 business is experiencing strong growth of over 40 per cent year-on-year.”

Digicor sales director, Richard Huang, said the exchange rate crash in Q4, 2008 had significantly impacted its server sales.

“The dollar dived some $0.40 in two months, meaning vendors had to increase their prices signifi cantly – it had a major impact,” Huang said. “The Australian dollar has improved and steadied, and added business confidence. People are coming back."

Digicor has seen a slight increase in sales from Q2, which Huang said was a good sign.

“Over time, slowly but surely business will return,” he said.

Gartner server analyst, Erica Gadjuli, claimed virtualisation, on x86 servers particularly, was impacting server shipment volumes.

“Gartner is forecasting that server spending in Australia will slowly be showing positive growth again in 2010,” she said. “This is mainly because businesses are currently continuing to be cautious in their investment. To save costs, most of them will take, or have taken, measures such as extending useful life of existing servers by upgrading the components, deferring purchase until next year.”

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Tags GartnerData#3x86 server marketserver vendor


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