IDC divides the server market into three market segments - low-end entry-level servers (priced below 25,000 yuan), mid-range servers (priced between 25,000-499,999 yuan) and high-end enterprise servers (priced above 500,000 yuan) level). This is the first time since 2002 that revenue in all three market segments has declined simultaneously.
Among them, the low-end entry-level server market was the most affected, with quarterly sales shrinking by 30.5% year-on-year. The mid-range market also fell by 13.6 percentage points, while the high-end market fell by 19.5%.
Matt Eastwood, a senior executive at IDC Group, said: "The server market around the world declined in the first quarter of this year as users stopped building new IT projects and slowed down the pace of IT equipment upgrades."
Among the five major server manufacturers, Dell was the most affected. Their server revenue fell by 31.2% in the quarter, HP fell by 26.2%, Sun also fell by 25.5%, IBM fell by 19.9%, and Fujitsu/Fujitsu-Siemens fell. 18.8%. However, IBM and HP still rank among the top five server manufacturers, with their market share reaching 29.3%.
However, Eastwood made a more optimistic forecast for the server market in the second half of this year. He said: "Currently, most enterprises are slowing down the pace of purchasing new IT equipment. On the contrary, they are focusing more on expanding existing equipment." However, we believe that although this trend will have a certain impact on the server market in the near future, it is expected that by the second half of this year, the global economy is expected to recover in 2010. So the demand for servers will go up."