FRAMINGHAM, USA: Customer spending in the worldwide server market is expected to decline 29.6 percent to $10.6 billion in the second quarter of 2009 (2Q09), according to IDC's Worldwide Quarterly Server Forecast.

This represents the fourth consecutive quarter of year-over-year spending decline for servers and a further acceleration in the pace of worldwide market deterioration.

In total, IDC forecasts that the market will see eight quarters of year-over-year revenue declines and expects annualized four-quarter rolling server spending will drop by 30.3 percent or $19.1 billion during the 2Q08 to 2Q10 period.

Additionally, IDC believes 2Q09 represents the largest year-over-year server sending decline the market will experience in this negative business cycle as the rate of market decline improves significantly in the second half of 2009 and early 2010.

Matt Eastwood, group vice president, Enterprise Platforms, IDC, said: "IDC has lowered its 2Q09 forecast by 8.5 percent or nearly $1 billion from our previous forecast as the depth of the worldwide recession increased in the first half of 2009. Although we are now forecasting a 22.1 percent year-over-year decline in server spending for 2009, the worst of the market contraction is behind us. In fact, by the end of the third quarter this year, nearly 90 perceent of the cumulative market contraction will have been realized as the market begins exhibiting significant signs of stabilization. It's important to note that IDC believes many IT users will begin making strategic compute platform decisions during the remainder of 2009 in advance of improving business conditions and server demand in 2010."

In calendar year 2009, spending on volume systems will decline 21.5 percent year over year on an 18.5 percent year-over-year decline in unit shipments as market conditions for the segment begin to improve modestly in the second half of 2009. Midrange enterprise demand is expected to weaken in 2Q09 with 2009 spending down 9.6 percent year over year. High-end enterprise spending is forecasted to decline 35.2% year over year in 2009 as capital budgets in large enterprises remain constrained throughout the year. In total, server spending is forecasted to be down 22.1 percent year-over-year in 2009 on an 18.3 percent year-over-year decline in units.