Blade Watch

Server bulletin

According to IDC’s Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 5.2% year over year to $12.6 billion in the third quarter of 2008 (3Q08). This is the largest quarterly revenue decline since the fourth quarter of 2002 as technology spending slowed around the world. Server unit shipment growth of 2.8% year over year in 3Q08 represented the slowest increase in server shipments since 4Q06.

Volume systems revenue declined 7.2% year over year in the third quarter, the first decline for this important market segment in more than 14 quarters. In the midrange, revenue for midrange enterprise servers declined 9.5% year over year while revenue for high-end enterprise servers grew 4.0% year over year, the third consecutive quarter of growth for the segment.

“The server market experienced significant deceleration in the third quarter with particular weakness in September. The slow down impacted a wide range of traditional server technologies with improved demand for blades and IBM System z notable exceptions,” said Matt Eastwood, group vice president of Enterprise Platforms at IDC. “Many OEMs experienced significant pricing challenges in the quarter and revenue declines were experienced in all regions except Latin America and the Middle East and Africa (MEA). Enterprise budgets continue to face increased scrutiny as IT organizations of all types look to run their hardware harder and defer acquisitions wherever possible.”

We’ll have to see. I remain kind of split regarding this, yes the ‘credit crunch’ has bitten and some businesses are being badly affected by this, which will affect the demand for servers. At the same time, the integration projects from different mergers and acquisitions could offset this. Those organizations which have bought elements of a business or integrated with a competitor will need to integrate their systems, bring on new users, need new infrastructure to achieve this.

Increasingly it is becoming apparent that how you use the technology is as important as your business practices, that you invest in your IT operationally affects what services, what benefits over the competition you can offer. That the IT works on DEC Alpha servers is great, but could I be more efficient on another platform using x86 servers and virtualization? Can I achieve more at less cost and more ‘end user benefit’.

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