FRAMINGHAM, USA: According to IDC's Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 14 percent year-over-year to $13.5 billion in the fourth quarter of 2008 (4Q08), marking the second consecutive quarter of market decline. Worldwide server unit shipments declined 12 percent in 4Q08 when compared with the year-ago period.

For the full year 2008, worldwide server revenue declined 3.3 percent to $53.3 billion, while worldwide unit shipments grew 2 percent to 8.1 million units. This is the first time the server market has exceeded 8 million units in a calendar year, reflecting continued demand for new physical servers even as virtualization makes significant gains in the enterprise.

Volume systems experienced the sharpest impact, with a year-over-year revenue decline of 16.8 percent. Midrange enterprise demand weakened with a year-over-year decline of 14.5 percent, while the high-end enterprise segment saw a revenue decline of 7.5 percent when compared to 4Q07.

This is the first time since 2002 that all three server segments have experienced a year-over-year revenue decline in the same quarter, illustrating the immediate impact of the economic downturn, which worsened in the same quarter.

Top 5 Corporate Family, Worldwide Server Systems Factory Revenue, Fourth Quarter of 2008

IDC's Worldwide Quarterly Server Tracker, February 2009