Worldwide server revenues down 4.8 percent

Worldwide server revenues fell for the third consecutive quarter, according to the International Data Corporation (IDC).

Factory revenues for the server market fell by 4.8 percent year on year to $12.6 billion in the second quarter, with analysts citing economic uncertainties and a strong refresh cycle back in 2010 for lowering demand.

Overall unit shipments decreased 3.6 percent year on year to 2.0 million units during the same period.  This was the first year on year decline in shipments for almost three years.

While the IDC expects the market to improve with major product refreshes coming into place in the second half of the year, demand in Europe and Japan was particularly slow analysts said.   IDC’s EMEA server market stats, released in June, showed an 11.9 percent decline in the region.

HP and IBM remained at the top of the market standings, with 29.6 and 29.2 percent factory revenues in the second quarter respectively.  

However most of the top five vendors saw revenues decline.

HP’s revenues dropped 5.0 percent, while IBM fell by 8.2 percent.   

Fourth placed Oracle saw revenues decline 20.1 percent, with Fujitsu hit the hardest as server revenues dropped 42.1 percent during the quarter. Dell was the only major vendor to see an increase, with revenues up 5.9 percent.

“Worldwide 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,” said Matt Eastwood, group vice president and general manager, enterprise platforms at IDC.

“That said, it is also clear that economic uncertainty is weighing on the market and the sales cycle is lengthening.”