Will CEE Server Sales Ever Stop Falling?

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01 Sep 2014

Prague, September 1, 2014 ─ The server market in Central and Eastern Europe (CEE) remained on a downward trajectory in the second quarter of 2014, shrinking in value by 10.0% year on year to $349.95 million. According to market research and advisory company IDC, shipments totaled 72,728 units, representing an 8.2% volume decrease from the same period in 2013.

"Continuous transition away from legacy systems and a trend toward consolidating IT infrastructure are the main factors eroding server market value," says Jiri Helebrand, research manager at IDC CEMA. "A growing number of organizations across the CEE region are considering cloud services as part of their new IT purchases, which leads to a smaller on-premise server footprint." This is evident in the non-x86 server segment, where revenue declined year on year by 32.0% to $53.79 million, while x86 server revenue contracted a comparatively minor 4.4% to total at $296.17 million.

Additional strain has been put on the market due to geopolitical risk surrounding the Russia/Ukraine crisis. Unsurprisingly, Ukraine was the worst performer in the CEE region during Q2 2014, although the Russian market fared rather well due to ongoing demand from service providers. Server deliveries in Poland, the Czech Republic, and Hungary all posted double-digit year-on-year declines in value terms, owing to a lack of large projects."

"The outlook for upcoming quarters is more optimistic, as we expect sales to be driven by server refreshes and by Windows Server 2003 migration projects, as the support for this OS will end in July 2015," adds Helebrand.

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