Oracle worst hit as EMEA server market revenue drops 10.5 per cent in Q1

The server market took another hit in the first quarter of 2013, with factory revenue dropping by 10.5 per cent and shipments declining by 5.7 per cent in the Europe, Middle East and Africa (EMEA) region.

The first three months of the year saw factory revenue for servers dropping to $2.8 billion (£1.8 billion), while shipments slumped to 520,000, putting the EMEA area significantly behind overall global declines in the server market.

This is the sixth consecutive quarter that revenue has dropped in the server market for the region, a disappointing reversal of European business investment in servers in 2010 and early 2011, which gave initial hope of a recovery in the sector after the 2009 recession.

Echoing global figures, HP remained in top position, despite revenue declines of 13.5 per cent, while IBM saw a drop of 23.5 per cent. Dell saw the only growth among the top five companies in the EMEA server market, with revenue rising 12.6 per cent. Fujitsu's revenue decline was the smallest at 0.5 per cent, while Oracle's was the largest at 32.1 per cent.

Revenue for servers running on x86 architecture declined by just 1.5 per cent, while non-x86 server revenue dropped a whopping 34.8 per cent. Sales of x86 servers accounted for 80.4 per cent of the EMEA market for the first time, sealing the fate of older systems.

“The transition to x86 accelerated this quarter. In Western Europe, annual demand for x86 servers was almost flat, with revenue down 0.9 per cent while sales of non-x86 legacy architectures dived by 35.7 per cent year on year. RISC sales were particularly hit, down by 49.8 per cent year on year, whereas mainframe revenue suffered single-digit declines of 4.8 per cent,” said Beatriz Valle, senior research analyst of the Enterprise Server Group at IDC EMEA.

“Big organisations in the corporate space and government are consolidating existing infrastructure using high-end x86 servers, with demand for legacy architectures at an all time low.”