No one was expecting for the server market to turn in a particularly strong second quarter, with so many different chips for systems either just entering the market or about to enter the market in the summer and fall. New processors always mean price/performance improvements in systems, so some customers buying now insist in price kits on current iron and others defer purchases entirely so they can get the shiny new boxes. Either way, sales in the current quarter have to go down.
And that is precisely what the box counters at IDC have figured out as they cases the server racket for the period running from April 1 through June 30. Server revenues on a global basis contracted by 4.8 percent, to $12.6 billion, and shipments were down 3.6 percent, to 2 million boxes.
Server sales tend to be cyclical and personal to your organization at the same time, there are of course drivers to increased shipments, such as the release of a new operating system like Red Hat Enteprise Linux 6.2, or Microsoft Windows Server 2012, as well as a new processor or chip set or market trends such as consolidation and virtualization. There are a mixture of things, there is the challenge that for many the four year old server is good enough, demand for infrastructure is linked to profitability and demand within the organization for capacity or extra functionality and reduced costs through reduced complexity, in a challenging operating environment many will be committed to investment, committed to reducing complexity and innovating their technology offering until the cost of doing so is realized. We’ll see I suspect a combination of Windows Server 2012 and the new chip-sets in the x86 space should improve server sales, and as existing markets settle and get less demanding, new ones are opening up looking for opportunities for new services and opportunities for revenue generation.