Gartner: Hardware market to defy economic slump

The hardware market in general is still growing, with the main areas of growth being low-end Linux systems and high-end mainframes, says the analyst house

Forecasts of economic gloom do not apply to the hardware market just yet, according to analyst firm Gartner, which has predicted that the market for both PCs and servers will remain in growth this year, and at least for the start of next year.

Gartner believes the continued growth will be spurred by companies buying servers for consolidation and virtualisation, and by strong emerging markets.

The predictions came out of the Gartner IT Hardware Insights forum, which was held at the company's UK headquarters in Egham, Surrey, on Wednesday.

"We don't believe that all of the hardware markets have reached the consolidation stage yet," said Gartner research director Annette Jump, speaking at the forum. "Some products may show some of the characteristics [of the consolidation phase of an industry] and some products may reach that stage, but not the overall market." According to Jump, the emerging markets hold the key to growth for many IT companies, with the key markets being Mexico, South Korea, South Africa, Indonesia, Central and East Africa.

"Overall, the market [for servers] is looking pretty strong," added Adrian O'Connell, principal analyst at Gartner. "Even in the US, demand has calmed a bit, but the [hardware] market has stayed relatively strong." The UK market has also been less active, he added.

Senior research analyst Errol Rasit said the period from 2008 to 2009 will be marked by a split in the market for hardware. "At the high end and the very low end, we have two very large groups who are spending," he said. Linux-based systems are a beneficiary of this trend, thanks to the move away from high-end Unix systems to x86-based systems.

Another beneficiary is IBM which, according to Gartner, is seeing a resurgence of interest in the zSeries mainframe. Companies that used to use large-scale, x86-based multi-processor systems are now "buying larger systems to achieve economies of scale", Rasit said.

But, for servers, the Unix market is still dominated by Sun, added Rasit. "Sun is doing a good job of maintaining [the] number one [position]."

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