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June 13, 2012

EMEA server sales down by 11.9% in Q1 of 2012: IDC

Server sales declined due to global meltdown

By CBR Staff Writer

The Europe, the Middle East and Africa (EMEA) server market revenue declined by 11.9% to $3.1bn in the first quarter of 2012, according to the latest figures from International Data Corporation (IDC).

The annual server shipments declined 3.8% to 556,877 units. The qauarter-on-quarter performance was even weaker compared to the annual figures which recorded double-digit drop in both the value and the volume reporting 23.9% and 13.1% decline respectively.

This was the second consecutive quarter of annual revenue declines and the first double-digit decrease since the third quarter of 2009, in the midst of the first downturn.

The x86 server segment remained the main growth engine, with revenue of $2.2bn, equivalent to 73% of the total value market.

IDC EMEA Enterprise Server Group research director Nathaniel Martinez said EMEA server vendors in 1Q12 continued to face up to a number of market challenges, compounded by a very difficult economic environment.

"Overall, the EMEA server market in 1Q12 was in line with IDC expectations and presented a very mixed picture in terms of server spending, with countries across the region showing important discrepancies in terms of trends," he added.

"Large HPC projects and investments in public cloud infrastructures from hosters and Web 2.0 players and private cloud infrastructure projects in the large enterprise continue to play out significantly in those differences."

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In the Western European market, x86 servers generated sales of $1.6bn or 71.8% of total factory revenue in 1Q12, while non-x86 sales were $668.5m, marking just 28.2% of the total Western European market.

IDC EMEA Enterprise Server Group senior research analyst Beatriz Valle said, "The Western European region is a mature market and the difficult macroeconomic conditions, as well as the uncertainty about the future of the euro area, compounded the current slowdown in server spending, particularly in the non-x86 market, leading to server sales declines sharper than in other EMEA subregions.

Central and Eastern Europe, the Middle East, and Africa (CEMA) combined accounted for the first negative quarter in over a year and 1Q12 resulted in a 3.7% decline totaling $752.96m.

Central and Eastern Europe (CEE) remained positive despite an uncertain economic environment, coupled with austerity measures in the public sector across many countries in the region, which had an adverse effect on server demand.

The CEE region grew 4% to $397.72m led by strong server sales in Russia that helped to offset shrinking demand in the rest of CEE.

x86 revenue reached $2.2bn, marking 73% of the total market, though a decline of 3.4% annually.

EPIC servers experienced the sharpest fall in non-x86 shipments, down 46.5%, followed by CISC and RISC systems, down 34.3% and 16.8%, respectively.

By operating system, Windows held 52% of the market, generating hardware spending of around $1.6bn and Linux was the only operating system to experience positive growth up by 6.5% at $750m or 20.7% of total market sales.

In the vendor market, HP gained the top spot in the EMEA server market in 1Q12 for the first time since the fourth quarter of 2007, held by IBM in 4Q11.

The vendor outperformed IBM by 11.9 percentage points despite a decline of 19.1%.

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