Nervous businesses in Western Europe are upgrading old servers or buying low-end systems rather than the high-end products they would have bought a year ago, according to a report released by Dataquest Inc., a unit of Gartner Inc., on Friday.
The Western European server market continued to weaken for the third consecutive quarter, the report said. Revenue in the third quarter fell by 21 percent year on year to US$3.62 billion, while overall shipments fell by 7 percent compared to the same period last year to approximately 248,000 units.
Intense price competition and buyers' decisions to maintain their installed infrastructure rather than buy new products were to blame for the discrepancy between sales and revenue figures, Gartner said.
Worst hit were scalable enterprise systems, such as RISC (reduced instruction set computer)/Unix-based systems, with a drop of 36 percent in unit sales and 33 percent in revenue, the report said.
The telecommunication and finance sectors have seen the sharpest drop on spending over the past six months, said Gartner, but there is increasing pressure in all industry segments.