Africa’s server market revenue slumping, huge economic challenges to blame

Server market in Africa continues to struggle with the second quarter of 2012 marking the third consecutive quarter of decline in shipments, and the fourth in revenue slump.

Global tecgnology research firm Gartner attributes the consistent trends to the huge economic challenges. Other regions showing similar trends include Europe and the Middle East.

“Each of the three key sub regions saw revenue decline: Eastern Europe by 1.3 percent, the Middle East and Africa by 0.5 percent and Western Europe by 14.7 percent. This weakness was evident in both technological and geographical segments,” Adrian O’Connell, research director at Gartner said.

In Africa, Europe and the Middle East, server shipments totaled over 585,000 units in the period thus showing a decrease of 4.4 percent from the same period last year. Revenue from server totaled $3.3 billion, a decline of 11.6 percent from the same quarter last year.

The three were however not alone in having difficulty in the second quarter of 2012 as Japan and Latin America also showed a declining trend. Asia/Pacific on the other hand attained only a modest growth.

Experts say that vendors operating in Africa, as well as Europe and the Middle East, face stiffer challenges, such as lack of long-trem growth drivers, compared to the the thriving regions.

“The region’s economic malaise is limiting the short-term outlook,” O’Connell said.

According to O’Connell, introduction of new products can help trigger some improvements in server demands in the three regions toward the second half of the year.

The key issue for vendors however remain one of execution to make the most of the competitive opportunities, he explained.

Global server shipments increased by 1.4 percent in the second quarter of 2012, over last year’s, while revenue declined by 2.9 percent year-on-year, Gartner reported.

According to Jeffrey Hewitt, research vice president at Gartner, the slight unit growth for the quarter in question was distinguished by a slump in revenue on the global basis with geographical variations continuing to be showed based on the current contrasts in economic conditions by region.

With regard to global revenue growth, the United States and Asia/Pacific showed growth for the quarter. The rest of the regions declined.

x86 servers continued to grow although at a moderated rate with 1.8 percent rise in units for the 2012 second quarter while revenue increased by 5.6 percent. On global basis, RISC/Itanium Unix servers continued to decline for the period. A 14.9 percent fall in shipment was noted in addition to a 17.9 percent drop in vendor revenue, compared to the same quarter in 2011.

“The ‘other’ CPU category, which is primarily mainframes, showed a decline of 3.0 percent,” Hewitt said.

From the regional perspective, the United States showed significant growth in shipments with a 8.4 percent increase, in addition posting the highest vendor revenue growth at 6.5 percent.

HP recorded the lead for the quarter based on revenue posting a worldwide server vendor revenue of $3.7 billion for a total share of 29.1 percent for the second quarter of 2012. Leading in server shipments, HP also retained its worldwide title in the second quarter of 2012.

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