The Server market in Europe Middle East and Africa (EMEA) experienced in 2002 its weakest year in more than 4 years, according to new results from Dataquest, a unit of Gartner. Server shipments declined 1% 2002 with shipments totalling 1,37 million of units. Revenues declined by 12% compared to 2001, totalling $15 billion.

According to Karen Benson, Principal Analyst at Gartner, new business opportunities were few and far between for vendors in 2002. Following a period of prolonged weakness, where users have been focusing on optimising existing infrastructure and demonstrating return on investment, the priority for vendors was to address the needs of the installed base to protect and maximise the potential opportunities within those accounts. The market ended the year in a slightly more positive way. There are signs that demand is stabilising, with two consecutive quarters of year-on-year shipment growth in the second half of 2002, though, the growth is very moderate: Q4 saw shipments increase of only 1.3% compared to the same period in 2001. Moreover, the news is not good from a revenue perspective. Price pressure and product mix fluctuations are causing revenues to decline across the server range. Gartner said on-going spending caution, longer project cycles, sustained pricing competition and a shift in product mix towards the low-end, will result in further revenue declines in 2003, bottoming out in 2004. Ongoing interest in high-end Unix platforms for consolidation projects will result in positive revenue growth in this segment of the market but will not be enough to offset the decline in midrange server deployment and pricing pressure, according to the analyst.

Dell Computer, Sun Microsystems and Fujitsu Siemens were the best performing vendors in 2002, while market shares of IBM and HP declined last year. The obvious reason in such changes is the overall economic state and consumer’s concentration on cheaper servers.