Server sales hit their lowest point in 13 years, dropping by 30% in the second quarter of 2009, according to and IDC report.

According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 30,1% year over year to $9,8-billion in the second quarter, marking the fourth consecutive quarter of revenue decline and the lowest quarterly server revenue since IDC began tracking the server market on a quarterly basis in 1996.
Server unit shipments declined 30,4% year over year in the quarter, accelerating from the 26,5% decline experienced in the first quarter and representing the largest ever year-over-year quarterly server unit decline as customers continued to defer server refresh activities.
Revenue for all classes of servers weakened further in the second quarter, with volume systems declining 30% and midrange enterprise revenue off 28,1% year over year. The slowdown extended to the high-end enterprise segment where revenue declined 32% when compared to the same quarter one year ago. This is the third consecutive quarter that all three server segments have experienced a year-over-year revenue decline in the same quarter.
"Over the past four quarters, the worldwide server market has experienced significant revenue deceleration in all geographic regions as the economic recession has deepened," says Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Fewer servers have been shipped over the past four quarters than at any time since 2005 and it is clear that the worldwide server installed base is aging rapidly.
"In the weeks and months ahead, IDC believes that IT customers around the globe will begin to focus on the future once again, making strategic compute platform decisions for the next business cycle, and driving more predictable server demand as market conditions stabilize in the second half of 2009."
IBM held on to its number one spot in the worldwide server systems market with 34,5% market share in factory revenue for the second quarter and gaining 1,8 points of share in the quarter on the performance of System x and System p.
HP maintained the number two spot with 28,5% share for the quarter, on a 30,4% year-over-year revenue decline. Dell and Sun held the number three and four market positions with 12,4% and 10% factory revenue share respectively. Dell's factory revenue declined 26,8% and increased its market share by 0,6 points year over year while Sun's factory revenue declined 37,2% year over year. Fujitsu/Fujitsu-Siemens maintained its fifth-place standing in terms of factory revenue, with 3,5% market share in the quarter.
The market for non-x86 servers, including servers based on RISC, EPIC, and CISC processors, declined 32,2% year over year to $4,7-billion in the quarter. After outperforming x86 servers recently, this is the first time in the past six quarters that non-x86 servers have underperformed x86 servers in the market.
IBM maintained its leadership position, posting 53,3% share in this segment, followed by Hewlett Packard (19,2%) and Sun Microsystems (17,3%), respectively, based on factory revenue.
Microsoft Windows server revenue was $3,7-billion in the second quarter, showing a 27,7% year-over-year decline and comprising 38,1% of all server revenue in the quarter. Windows servers account for the single largest segment of spending, by operating system, in the worldwide server market.
Linux server revenue declined 28,9% year-over-year to $1,3-billion in the quarter. Linux servers now represent 13,8% of all server revenue, up slightly from 13,5% a year ago.
Unix servers experienced a 30,9% revenue decline when compared with the second quarter of 2008. Worldwide Unix revenues were $3,1-billion for the quarter, representing 31,5% of quarterly server spending. IBM gained 7,4 points of share year over year and holds the leadership position in the Unix server market, posting 41,4% share in this segment, followed by Sun Microsystems (27,3%) and Hewlett Packard (24,8%) respectively, based on factory revenue.
The x86 server market remained weak in the quarter, declining 28,1% in the quarter to $5,2-billion worldwide as unit shipments declined 30% to 1,4-million servers. This is the lowest x86 server revenue since third quarter of 2003, with the top three x86 server vendors all experiencing server revenue declines of 20% or more in the quarter. IBM exhibited the strongest x86 performance of the top three OEMs, gaining 1,4 points of market share on a 21,8% year-over-year factory revenue decline. HP led the market with 36,9% revenue share while Dell held second place with 23,7% revenue share and IBM maintained the third position with 17,5% revenue share.
"x86 servers continued to show marked weakness due to economic instability throughout the second quarter. While the year-over-year revenue decline is particularly steep, it should be noted that the comparison was to a strong second quarter in 2008, which had the highest second quarter revenue for the x86 market since 2004," says Daniel Harrington, research analyst, Enterprise Server Group.
"This quarter's performance was not unexpected, and with the lack of normalcy from seasonal patterns it should be noted that unit shipments did increase quarter over quarter. IDC believes that due to constrained IT budgets, users refrained from investing what capital they had in preparation for the significant product refresh led by the latest AMD Istanbul and Intel Nehalem server CPU's, which began ramping during the quarter. Indications from the market support an optimistic view for x86 servers in the coming quarters."
The blade server market segment experienced quarterly revenue declines for the second consecutive quarter with factory revenue falling 12,1% year over year on a 19,8% year-over-year shipment decline. Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $1,2-billion in the first quarter, representing 11,7% of quarterly server revenue. IBM exhibited the strongest blade server performance of the top five OEMs, gaining 3,8 points of market share on 2,3% year-over-year factory revenue growth. HP led the market with 52,9% revenue share as IBM held second place with 27,2% revenue share and Dell maintained the third position with 9,1% revenue share.