Server demand expected to slow

Dubai: Server demand in Europe, the Middle East and Africa (EMEA) is expected to slow down in 2009 and is unlikely to recover until 2010 due to the economic slowdown, an industry expert has said.

"With nearly all technology segments under pressure - x86 and non-x86 platforms - virtualisation may add to the pressure and could pave the way for a 'perfect storm' affecting server refreshment in the second part of 2009.

"x86 installed bases, especially for large, tech-savvy accounts, have been considerably reduced through better use of technologies such as multicore and virtual machines," said Beatriz Valle, IDC analyst with the Enterprise Server team.

The Middle East and Africa region fared slightly better than other regions but also experienced a significant decline of 11.4 per cent in revenue and 8.1 per cent in shipments.

The Middle East region felt the combined effects of the global economic crisis and falling oil prices in 2008, and was not able to remain afloat, reporting an annual revenue drop of 15.4 per cent for x86 platforms and 6.7 per cent for non-x86 servers. For 2008, server revenue in EMEA declined 3.8 per cent to $17.5 billion (Dh64.2 billion) from $18.2 billion in 2007. However, the number of servers shipped increased by 2.5 per cent to over a quarter of a million units.

According to an IDC report, factory revenue in the EMEA server market reached $4.4 billion in the fourth quarter of 2008, an annual decline of 19.4 per cent, with shipments down by 12.4 per cent to around 650,000. This was the steepest annual revenue decline since the dot-com crash of the third quarter of 2001.

Hewlett-Packard enjoyed the top revenue spot for 2008, widening the gap to its closest competitor and enjoys a six full percentage points market share advantage for the full year. Industry-standard ProLiant servers generated more than $4 billion in 2008. Progress in the non-x86 segment, especially during the fourth quarter, contributed to the results.

IBM saw revenue decrease 6.1 per cent in 2008 over 2007.

Sun Microsystems maintained the same market share in the fourth quarter and for the full year, relative to the same period of the previous year.