Worldwide Server Market Spending Will Decline 22.1% in 2009, But Market Shows Signs of Stabilization, According to IDC

FRAMINGHAM, Mass.--(Business Wire)--
According to IDC's Worldwide Quarterly Server Forecast, customer spending in the
worldwide server market is expected to decline 29.6% to $10.6 billion in the
second quarter of 2009 (2Q09). 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 4-quarter rolling server
spending will drop by 30.3% 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.

"IDC has lowered its 2Q09 forecast by 8.5% or nearly $1 billion from our
previous forecast as the depth of the worldwide recession increased in the first
half of 2009," said Matt Eastwood, group vice president of Enterprise Platforms
at IDC. "Although we are now forecasting a 22.1% 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% 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% year over
year on an 18.5% 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%
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%
year over year in 2009 on an 18.3% year over year decline in units:

Worldwide Server Revenue and Year-Over-Year Growth Forecast, 2008-2013

(revenues in US$ millions)

REVENUE
Server Class 2008 2009 2010 2011 2012 2013
Volume $31,386 $24,611 $25,659 $27,278 $28,726 $30,112
Midrange Enterprise $12,536 $11,337 $11,144 $10,873 $10,975 $11,248
High-End Enterprise $13,164 $8,530 $7,486 $7,402 $7,357 $7,175
Total $57,087 $44,478 $44,289 $45,553 $47,057 $48,535

GROWTH
Server Class 2008 2009 2010 2011 2012 2013
Volume N/A -21.5% 4.3% 6.3% 5.3% 4.8%
Midrange Enterprise N/A -9.6% -1.7% -2.4% 0.9% 2.5%
High-End Enterprise N/A -35.2% -12.2% -1.1% -0.6% -2.5%
Total N/A -22.1% -0.4% 2.9% 3.3% 3.1%

Source: IDC Worldwide Quarterly Server Forecast, June 2009

IDC's Server Taxonomy

IDC's Server Taxonomy maps the eleven price bands within the server market into
three price ranges: volume servers (servers priced less than $25,000), midrange
enterprise servers ($25,000 to $499,999), and high-end enterprise servers
($500,000 or more). The revenue data presented in this release is stated as
customer revenue for a server system. IDC presents data in terms of customer
revenue, or end-user spending, to better represent the total amount of spending
in the server market for forecasting purposes. Customer revenue represents the
amount of money paid by end users for products and IDC uses customer revenue to
illustrate our server forecasts because many of our clients find spending to be
a more useful concept than vendor revenue for market planning.

IDC's Worldwide Quarterly Server Forecast is a quantitative tool for analyzing
the global server market on a quarterly basis. The Tracker includes quarterly
shipments (both ISS and upgrades) and customer revenue, segmented by region,
operating system, price band, form factor, CPU type, and architecture. For more
information, please contact Hoang Nguyen at 508-935-4718 or hnguyen@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services,
and events for the information technology, telecommunications, and consumer
technology markets. IDC helps IT professionals, business executives, and the
investment community make fact-based decisions on technology purchases and
business strategy. More than 1,000 IDC analysts provide global, regional, and
local expertise on technology and industry opportunities and trends in over 110
countries. For more than 45 years, IDC has provided strategic insights to help
our clients achieve their key business objectives. IDC is a subsidiary of IDG,
the world's leading technology media, research, and events company. You can
learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of
their respective holders.

IDC
Matt Eastwood, 508-935-4502
meastwood@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com

Copyright Business Wire 2009