Server shipments still down

In the second quarter of 2009, Asia Pacific continued its downward trend in server shipments with a 17.2% year-on-year decline, with shipments totaling 323,388 units.

Server vendor revenue for the second quarter reached $1.9 billion, down 15% compared with the same period a year ago, according to Gartner.

Generally, constrained server spending remained in the background for most medium and large enterprises in Asia Pacific, although there was growth in units shipped (11%) and revenue (4.6%) over the previous quarter.

The sequential growth came particularly from Australia, benefiting from the government’s stimulus program. Australia had a slight revenue decline of 2.5% year-on-year, while it doubled from 1Q 2009. Gartner expects the government’s stimulus plan will continue to inspire business confidence in Australia and drive further server demand.

In other developed countries, weak server demand generally continued to persist when compared with the same quarter of 2008, with the biggest revenue declines recorded in Singapore (-36.8%), Hong Kong (-48.3%), Taiwan (-33.7%) and Korea (-30.7%).

Similar to Australia, all these countries saw growth over the previous quarter in unit shipment and revenue, except Singapore. A combination of seasonal low server spending in the second quarter and a still-cautious level of business confidence led to further contraction quarter-on-quarter in server shipments (-5.2%) and revenue (-38.4%) in Singapore.

In China, the peak in purchasing in 2Q 2008 led to a drop of -2.5% year-on-year in the second quarter of 2009.

Mainframes had another strong quarter with 31.8% growth year-on-year, due to successes mainly in Australia and the South Korean financial sector. On the other hand, RISC/IA 64 platforms declined 23% over the same period last year.

All major server vendors saw a year-on-year revenue decline except Dell. HP retained the leading position in server shipments with 29% market share, with the majority of them in the x86 platform.

In revenue terms, IBM maintained its first position by controlling 39% of total revenue in 2Q 2009. Although IBM saw strong growth of mainframes this quarter, its power systems continued to suffer under the impact of global downturn and reported a double-digit revenue decline during the quarter.

Dell increased its share of shipments to 22.9% in 2Q 2009, however, continued to feel the pressure of the weak economy as volume fell 12.3% year-on-year. The company had a better picture in terms of revenue during the quarter as it continued to take advantage of its direct sales model that appeared to help in increasing its product’s selling price.

Because of the uncertainty surrounding the effect of Oracle’s purchase of Sun Microsystems, the latter’s overall server revenue went down 33% year over year while its revenue share went down three points to 9% in the second quarter of 2009.