We saw you admire that rack: UK server sales are finally recovering

Splice the mainbrace, boys! Bulging treasure chests GREW in Q2


Crack open the champers, suppliers - the UK server market actually GREW in Q2, ending five consecutive quarters of misery for those left brushing the dust off their systems.

Factory revenues went up four per cent in calendar Q2 to $501m as legacy systems rebounded due to increased project work that followed mainframe product refreshes.

The non-x86 platforms posted year-on-year factory revenue growth of 65 per cent to around $200m but the volume side of the UK server space fell 16 per cent to circa $301m.

In units terms, some 70,000 boxes were shipped during the quarter representing a drop of four per cent in x86 to 68,000 units but doubling in legacy to 2,000 individual servers.

Giorgio Nebuloni, EMEA server research guru at IDC, told us the jump in legacy kit caught the analyst out a little, saying that more sales "leaked" from Q1 to Q2 than it had expected.

He said IBM's Power 7+ and Oracle's M5 and T5 processor families tempted banking, insurance, further education and some mid-range organisations to upgrade. This fed through into their numbers, as they were the only legacy vendors to grow.

Successes in the x86 sector were harder to come by, said IDC as customers held out for Intel's E5 chip, announced at IDF, and shipping in the next few months.

Sales of both rack and blade server went backwards by more than 20 per cent, but tower machines grew by roughly a quarter on the same period a year ago.

Cisco was the only major x86 player to post growth in Q2.

IDC warned it still expects the UK server market to decline in 2013.

"x86 should pick up in Q3, mostly in Q4 and throughout 2014," Nebuloni told us, "but we are still forecasting a decline of eight per cent in non-x86 spending for the year".

The local economy is improving, though – the Bank of England again raised Q3 growth forecasts today – so the platform refresh could provide some uplift.

"We are crossing our fingers, and should be through the worst [of the downturn now],” said Nebuloni. “The market is stabilising and spending should start to flow again if nothing unexpected happens in the economy." ®

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