John Paczkowski

Recent Posts by John Paczkowski

Server Shipments Up, but Global Economy Drags Revenue Down

There’s good news and bad for server manufacturers in Gartner’s latest survey of their market. Server shipments are growing, but the revenue from those shipments is in decline.

In the second quarter of 2012, worldwide server shipments charted a 1.4 percent increase year over year from the second quarter of 2011, according to Gartner’s newest data. Meanwhile, worldwide server revenue for the same period declined 2.9 percent. Even Hewlett-Packard, which, based on revenue and shipments for the period, leads the worldwide server market, saw declines of more than 5 percent in both metrics.

The reason? The U.S. and Asia were the only two regions to post any growth for the quarter at all. And unsettled economic conditions in other regions dragged metrics down for everyone. To wit, server shipments in the U.S. rose 8.4 percent during the second quarter, bolstering revenue growth by 6.5 percent. But when lumped together with lousy numbers for pretty much everyone but Asia, their overall effect was muted.

So what’s behind the revenue decline for the period? Gartner analyst Jefferey Hewitt says it’s a combination of purchasing delays in advance of new hardware announcements and server spending constraints.

“An anticipated refresh in the mainframe segment obviously played a role here,” Hewitt told AllThingsD. “This segment is still relatively significant in terms of revenue, and IBM has announced new systems, which typically slows sales until the new systems are released and begin to “ramp up” in sales. … But as economic conditions improve and new systems in the mainframe and Unix space gain market traction, revenue should come back to the positive position — at least into single-digit growth.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik