APAC Q4 server results dulls full-year growth

The Asia-Pacific server market, excluding Japan, contracted 4.9 percent last year over 2007, largely dragged down by a dismal performance in the last quarter, according to research firm IDC.

Released Monday, IDC's Asia-Pacific Quarterly Enterprise Server Tracker indicated a 4.6 percent year-on-year decline in server shipments for fourth-quarter 2008, marking the first drop since 2002, or after 25 consecutive quarters of growth. The change in growth pattern mirrors that of the region's PC market, which also saw its first fall in shipment after a decade of expansion.

Numbers from another research firm Gartner, also reflected similar market movements. Its report earlier this month noted a 5.8 percent decline in the server market during the fourth quarter of 2008. Gartner, however, pointed to a positive growth in server shipments for full-year 2008.

Fall in most markets
Across the region, IDC said nearly every market experienced a steep, double-digit fourth-quarter decline in server spend over the same period in 2007. China, Thailand and Vietnam saw milder shipment dips, each registering a single-digit year-on-year decrease.

"It was an absolutely nerve-wrecking quarter when six of the top seven markets witnessed almost a third of server spending plunge on a year-on-year basis," Rajnish Arora, IDC's director of Asia-Pacific enterprise servers and workstations research, said in the report. "The modest, single-digit decline in server spending in second-half 2008 in [China] was expected after an astounding 30 percent surge in second-half 2007, underpinned by massive infrastructure buildout in the run-up to the Olympics."

According to Arora, Hong Kong was the most badly hit market as it is home to several global and regional financial services companies. Server spend there plummeted 52 percent during the fourth quarter of 2008, he noted.

He added that Singapore saw a 19.6 percent year-on-year plunge in server shipments during the same period, despite recording two consecutive quarters of double-digit growth. Spending on non-x86 servers, typically used for running mission-critical business applications, further worsened in the country after registering a 34 percent decline, compared to a decrease of 23.1 percent in third-quarter 2008.

For full-year 2008, x86 server spending for the overall region declined 4.3 percent after six consecutive years of growth, according to IDC. China and India saw strong growth at 7 percent, which helped stemmed a decline in the non-86x segment to just 1.4 percent year-on-year, the firm said.

Big Blue leads pack
According to IDC, IBM was the top server vendor in the Asia-Pacific region last year, despite seeing a slight dip in market share at 37 percent. Hewlett-Packard was second, capturing 32.2 percent market share.

Sun Microsystems ranked third but saw its market share dip by 17.2 percent year-on-year to 10.6 percent, due to a slowdown in demand for the vendor's Unix servers.

Fourth-placed Dell Computer captured nearly 10 percent of the market spend, although it was the fastest growing in terms of shipment. Chinese server maker Langchao rounded up the top five list, grabbing just 1.4 percent of 2008 total regional server spend.

In a statement Friday, IBM said it garnered 41.9 percent of the Southeast Asian server market in the final quarter of 2008. In the Philippines, Big Blug said it registered a 57.1 market share.