Server market held back by hard drive shortages

29 February 2012

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29 February 2012 | Angeline Albert

The global server market is still suffering from supply issues caused by a shortage of hard disk drives, according to IT research company Gartner.

Extreme floods in Thailand, a centre for hard disk manufacturing, in October last year resulted in the worldwide server market experiencing a 5.4 per cent decline in revenue in the last three months of 2011. Although server shipments increased by 4.5 per cent, this was not enough to satisfy demand.

Revenue for the global server market in quarter four of 2011 was $13.9 billion (£8.7 billion) down from $14.7 billion (£9.2 billion) in the same quarter of 2010.

Jeffrey Hewitt, research vice-president at Gartner said the floods meant “many providers could not meet the demand in the last weeks of 2011”.

“We expect the negative impact of these drive supply issues to continue into quarter one 2012,” he added.

IBM was the market leader in the worldwide server market based on revenue, ending the year with $4.7 billion (£2.9 billion) in revenue for the fourth quarter of 2011, but revenue at the business had fallen by 10.2 per cent when compared to the same quarter in 2010.

Gartner said buying organisations’ rising demand for smart phones and tablets that require easily accessible web content had fuelled demand for servers and data centres in 2011.

“2011 was a year that saw worldwide server growth driven by mega data centres and the explosion of client devices such as smart phones and tablets accessing web content,” said Hewitt.

In November, SM reported that hard disk manufacturer Pace expected profits to be hit to the tune of $9.5 million (£5.9 million) after the Thai flooding caused supply chain disruptions.

Rival manufacturer Seagate Technology also previously said its ability to supply hard disk drives will be “significantly constrained” in the first half of 2012.


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