Report: Server market grows, generates less revenue

As cloud computing and virtualization technologies continue to disrupt the private sector, the server market is undergoing significant changes. According to a new report by IDC, the global server market generated approximately $11.8 billion in revenue during the first quarter of 2012, down 2.4 percent from the first quarter of 2011.

Conversely, server unit shipments increased by 2.7 percent year-over-year to 2 million units, IDC noted. This is the second-highest quarterly total ever recorded in the first quarter of a calendar year.

"The server market worked through a transitional period in the first quarter of 2012 as suppliers prepared to introduce numerous critically important x86 server offerings," IDC enterprise platforms general manager Matt Eastwood said. "At the same time, difficult year-over-year compares helped distort some results across other segments of the market."

According to a report by Morgan Stanley, the growing number of cloud servers will also disrupt the market. Public cloud servers, in particular, are forecast to expand at a compound annual growth rate of 60 percent through 2013, which will impact both cloud and on-premise system markets.

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