Spring Means Hopes for Server Business Revival

If you live in the Northern Hemisphere, the signs of spring finally coming to life are all around – crocuses shooting up from the ground, buds on trees and green lawns. It just so happens, too, that, at this time of the year, we’re seeing stronger signs of new life in the economy and in the IT industry.

Take spending on servers, for example. Even though we haven’t seen first-quarter 2010 results, we at least know that the trend is up. IDC says so, anyway. The analysts recently released numbers that showed revenue from servers in the fourth quarter last year declined 3.9% from 2008, to $13 billion, as shipments rose 1.9% to 1.9 million units. That was the sixth consecutive quarter that revenue fell year over year, according to IDC.

Wait! you may be thinking. That’s revenue loss. How can that be positive? Well, that’s why you should always read the inside of a book before you judge it.

IDC says that the fourth quarter was the second consecutive period of sequential quarter-over-quarter revenue growth, according to an article that I read about the statistics. So, even though things may not be looking so good on a year-over-year basis, it’s looking up for quarter-on-quarter business.

What’s behind the improvements? Apparently, there’s a rebound in spending on volume servers. Spend is up 9.9% year over year. Also, the revenue decline for mid-range servers, priced between $25,000 and $250,000, slowed in the fourth quarter to a drop of 5.3% decline year over year, compared to a 9.5% fall in the third quarter.

IBM is still on top of the server market, leading in the quarter with a more than 35% share. The company, however, saw revenue decline 6.5% year over year. And Hewlett-Packard followed with a 30.5% share, with revenue rising 0.8%. Third-place Dell had a 11.5% share, as revenue grew 4.5% due to an increase in sales to enterprise, public sector, and data-center customers, IDC said, in the article. In fourth-place was Sun Microsystems (recently bought by Oracle). Sun saw a 17.3% drop in revenue, holding an 8% share in the quarter. Of the top five, Fujitsu placed last, with a 7.2% increase in revenue and a 4.6% revenue share figure.

Hopefully, the rise in server spending will maintain its staying power. From where I sit, providing monitoring services to companies, I can definitely report a trend in greater interest for safer, more secure server performance, and I’m confident that will continue, too.