IDC: 2Q Server Sales Off 30%, Biggest Decline In Years

   DOW JONES NEWSWIRES 
 

Global computer server sales revenue dropped 30% to $9.8 billion in the second quarter, the fourth-straight quarter of the declines and the biggest since research firm IDC began tracking the server market.

But it said an aging installed server base could help lead to more predictable demand as the market stabilizes the rest of the year.

The second quarter's 30% shipment decline was also worse than the first quarter's 27% drop. The first quarter's 24.5% revenue decline was the biggest seen by IDC until the latest period's slump. The second-quarter sales total was also the second in a row below $10 billion - they are the first two periods since 1996 to breach that figure.

"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," said Matt Eastwood of IDC.

The recession is mostly to blame for the sales woes as businesses continue to throttle back on information-technology spending. Unlike the last recession, however, server makers aren't drastically reducing prices.

International Business Machines Corp. (IBM) again had the highest market share by factory revenue at 34.5%, up 1.8 percentage points. Hewlett-Packard Co. (HPQ) was next with 28.5%, while Dell Inc. (DELL) and Sun Microsystems Inc. (JAVA) were far behind at 12% and 10%, respectively. Of the four, Sun saw the biggest revenue drop at 37%.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]