Analyst firm IDC has found that factory revenue in the worldwide server market decreased 2.4 per cent year over year to US$11.8bn in the first quarter of 2012; the second consecutive quarter of year-over-year revenue decline.

On a year-over-year basis, volume systems experienced 2.1 per cent revenue growth. This was the ninth time in the previous ten quarters that volume system demand improved year over year. At the same time, demand for midrange and high-end systems experienced year-over-year revenue declines of 11.2 and 10.2 per cent respectively in 1Q12. The midrange and high-end were impacted by difficult year-over-year compares combined with transitions in the technology refresh cycles typical for these segments.

"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. At the same time, difficult year-over-year compares helped distort some results across other segments of the market," says Matt Eastwood, group vice president and general manager, Enterprise Platforms at IDC.

"Regionally, Americas was flat year-over-year while EMEA experienced a sharp double-digit decline in server spending. However, the larger concern for server vendors was the sharply lower revenue growth in Asia/Pacific, including China. China is one of only three countries that regularly spend more than US$1bn quarterly on servers and any sustained reduction in revenue growth would be troubling for the market," he explained.