MEA server revenue falls 23.9% in first quarter

Server revenue in the Middle East and Africa (MEA) slipped 23.9% in the first quarter of the year, according to IDC’s year-on-year figures. The analyst firm does not foresee this market trend changing for the better in the short term, according to a statement released by the company.

"The contraction is a direct result of the sharp downturn in the global economy and the escalation of the financial crisis," said Stefania Lorenz, CEMA Systems research director at IDC. "Economic growth in some of the countries across the region has come to a standstill, presenting a real challenge to all IT businesses."

The greater region of Europe, the Middle East and Africa (EMEA) posted a 34.3% slide in server revenue, making it the fastest year-on-year decline since IDC began recording in 1996.

"After negatively affecting server spending in the finance and automotive sectors, the economic downturn spread to all economic segments at the start of 2009, leading to recessionary environments in many countries in EMEA. While the technology drivers and customer needs remain unchanged, organizations and IT departments react to poor trading conditions and falling demand by streamlining their balance sheets and postponing and downsizing non-urgent IT investments," said Nathaniel Martinez, program director for European systems and infrastructure solutions at IDC.

The best performing class were midrange servers, with a decline of 27.8% in the first quarter compared to the same period in 2008. High-end servers posted the sharpest fall, sliding 40.4% annually. According to IDC, countries in Central and Eastern European areas suffered the worst declines, with sales down 43.7%.

"IDC believes that server spending cuts are a short-term response to degrading economic conditions, but in the long-term, organizations will re-initiate IT infrastructure investment to lower overall cost structure and operate at a higher level of efficiency through virtualisation, automation, and power-saving technologies," added Martinez.

IDC’s findings showed HP had the largest share of EMEA revenue for the quarter, with US$1 trillion, followed by IBM’s $847 billion, Sun’s $351 billion, Dell’s $260 billion and Fujitsu Siemens with $198 billion.

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