IBM, Hewlett-Packard (HP), Dell and Sun Microsystems watched their yearly and quarterly server revenue sink as the US slips deeper into a recession and the global economy slows down, according to IDC, a market research firm. Shipments and revenue from blade servers reflected the one piece of positive news from the IDC report.

"All server vendors, geographies, and technology segments were impacted significantly as the global recession gained momentum and market conditions weakened as the quarter progressed," IDC's Matthew Eastwood said in a statement.

For 2008, worldwide server revenue fell 3 per cent year-over-year for a total of $53.3 billion. For the year, server system shipments increased only 2 per cent for a total of 8.1 million units. Those numbers reflected the worse returns since the first quarter of 2002, just after the dot-com bubble burst.

Unit shipments between October and December fell 12 per cent from a year ago, while revenue dipped 14 per cent as every major vendor saw sales fall. Server sales were flattened by the global recession, and also a faster-than-expected drop-off in Western Europe and Asia, according to IDC Group Vice President Matthew Eastwood.

Also, sales of the three varieties of servers all fell during the quarter, marking the first time since the dot-com collapse and recession, according to IDC. This year is starting out with the same down feel. "Things really fell off in January and February," Eastwood said. "We're setting ourselves for a pretty poor first quarter."

HP's quarterly server revenue fell 10 per cent for a total of $3.9 billion, which put the company in second place behind IBM. Dell also watched its server revenue fall 10 per cent for a total of $1.4 billion. Sun's revenue fell 14 per cent for a total of $1.3 billion and Fujitsu/Fujitsu Siemens' revenue fell 15 per cent for a total of $567 billion.

In 2008, IBM remained the worldwide revenue leader with revenues totaling $17 billion. However, Big Blue's revenue totals were 2 per cent less than in 2007. HP's annual server revenue slipped about 2 per cent for a total of $15.8 billion. Dell watched its 2008 server revenue drop 1 per cent for a total of $6.2 billion. Sun's revenues fell about 8 per cent for a total of $5.4 billion and Fujitsu's revenue fell 4 percent to $2.6 billion, according to IDC.

The one area that did show some positive signs was the blade market. Overall, blade server revenue increased 16 per cent in the fourth quarter of 2008, while shipments increased 12 per cent. HP dominated the market with a 54.8 per cent revenue share. IBM followed with a 21.7 per cent revenue share. For 2008, blade server revenue increased 33 per cent for a total of $5.4 billion.

Blade servers are self-contained all-inclusive computer servers with a design optimized to minimize physical space. Whereas a standard rack-mount server can exist with (at least) a power cord and network cable, blade servers have many components removed for space, power and other considerations while still having all the functional components to be considered a computer.