Worldwide server revenue declined 6.2% year over year to $11.9bn during the second quarter of 2013, according to a report from the International Data Corporation (IDC).
According to the report, the server unit shipments reported a 1.2% year over year drop during the quarter to 2m units, marking a third consecutive quarter of decreasing sales.
The volume systems revenue decreased by 2.4% year over year, while the demand for midrange and high-end systems went down by 22.3% and 9.5% respectively during the quarter.
IDC Enterprise Platforms group VP, Matt Eastwood, said that most SMB and enterprise server customers around the world continue to focus on consolidation, virtualisation, and migration initiatives aimed at increasing efficiency and lowering datacentre infrastructure costs.
"At the same time, challenging economic conditions are dampening demand for new IT projects necessary to grow the server market globally," Eastwood said.
"It is clear that the competitive dynamics in the server market remain fierce as the leading server vendors work to offset weak demand for generally higher margin Unix and blade servers with lower margin rack and density optimised servers."
IBM led the worldwide server market with a 27.9% factory revenue share during the quarter, followed by HP with a 25.9% share, but reported a 17.5% year-over-year drop in revenue due to low demand for x86-based ProLiant servers.
For the second quarter of 2013, Dell and Oracle held third and fourth place with 18.8% and 6% factory revenue shares respectively, followed by Cisco with a 4.5% share.
Cisco and Dell reported increasesin factory revenues by 42.6% and 10.3% respectively during the quarter.
