The Australian and New Zealand server market has declined sharply in the first quarter of 2001 dropping 17 per cent compared to Q1 2000, according to Gartner's Dataquest.
The fall has spread to the entire Asia-Pacific region with unit shipments dropping 12 per cent. This compares with growth in excess of 20 per cent for the region in the corresponding first quarter of 2000.
Gartner's Dataquest regional server program manager, Matthew Boon, said flat growth in Australia compared to a year ago is a worrying sign that corporate companies have delayed purchases during the quarter.
In Australia, unit shipments for Q1 2001 were 14,323 compared to 16,734 in Q4 2000. For the entire Asia-Pacific region unit shipments for Q1 2001 were 136,104 compared to 155,334 in Q4 2000.
"All in all the past quarter was a tough one; the drop in units compared to Q4 2000 was fairly severe, but signs are that companies in the [Asia-Pacific] regional centres such as Australia and Singapore have delayed, rather than cancelled purchase decisions, to see if the slowdown is a protracted one or not," he said.
"Its a sign that IT spending in Australia in the first quarter of 2001 was tight; hopefully we have hit the dip and it will level off in the next two quarters."
Boon warned that a looming Federal election could be a real wild card just as the IT climate starts to improve later in the year.
Vendor market share remained the same, only IBM and Dell increased their overall share this quarter with Big Blue moving to 18 per cent, Compaq 16 per cent, Hewlett-Packard 15 per cent, Dell 9 per cent and Sun Microsystems 6 per cent.
Boon said IBM's eServer rebranding contributed to its increase in market share and Dell has been aggressively chasing the price-sensitive end of town.
"Although [IBM and Dell] have been able to increase market share the question is just how sustainable this is," he said.