Worldwide server market declined 4.8% to $12.6bn during the second quarter of 2012 compared to $13.2bn recorded during the corresponding quarter in 2011, due to weakening of demand especially in Western European countries and Japan, according to new report.
According to International Data Corporation (IDC) Worldwide Quarterly Server Tracker report, it is the third consecutive quarter revenue decline.
Similarly, server shipments declined 3.6% during the quarter to 2 million units and it is first year-over-year decline in server shipments since third quarter of 2009.
IDC Enterprise Platforms group vice president and general manager Matt Eastwood said server revenue declined for the third consecutive quarter in 2Q12 as the market continued working its way through a number of technology transitions impacting customer demand for x86, Unix, and mainframe class systems.
"That said, it is also clear that economic uncertainty is weighing on the market and the sales cycle is lengthening," Eastwood said.
"Regionally, server demand in Western Europe and Japan was particularly soft while server revenue in the U.S. and Asia/Pacific managed to grow modestly."
During the quarter, HP and IBM jointly held the number 1 with a market of 29.6% and 29.2% respectively.
HP’s server revenue declined 5% during the quarter, with flat sales of x86-based ProLiant servers and decline in Integrity server demand.
With softening of demand for System x, Power Systems, and System z ahead of a number of major product transitions, IBM recorded a 8.2% year-over-year decline in its server revenue losing 1.1% of its market share.
Dell continues to hold on to the third place with 16% market share though its revenue declined 5.9% during the quarter.
Oracle maintained the number 4 position with 6% market share, though its revenue decreased 20.1% compared to 2Q11.
During the quarter, Fujitsu remained at number 5 position with 3.9% market share, with its revenue declining 42.1% year over year.
Microsoft Windows server demand was up 0.3% during Q2 hardware revenue reaching $6bn representing 47.9% of overall quarterly factory revenue, up 2.4 points over corresponding auarter in 2011.
Linux based servers accounted 22.1% of all server revenue, up 1.4 points when compared with the second quarter of 2011.
The demand for high performance computing (HPC) and cloud infrastructure deployments positively impacted Linux based servers, with hardware revenue increasing 1.7% year over year to $2.8bn during the second quarter.
Revenue of the Unix based servers recorded 20.3% decline in Q2 to $2.3bn accounting 18.4% of quarterly server revenue
Non-x86 servers, including servers based on RISC, EPIC (Itanium-based), and CISC processors, declined 19.4% year over year to $3.9bn during the quarter.
Blade server revenue increased 6.3% and shipment increased 4.1% during the quarter compared to last year.
Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $2.1bn in revenues, representing 16.9% of quarterly server market revenue.
"It is important to note that IDC believes that server demand will begin to improve in the second half of 2012 following a number of critical product refreshes which continue to be announced," Eastwood said.
