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Server market and ESS revenues will have a sharp fall due to COVID-19 spreads
International Data Corporation (IDC) said that the server market will decline by 11.0% in Q1 and 8.9% in Q2 and then return to growth in the second half of the year.
IDC Worldwide Quarterly Server Tracker and Worldwide Quarterly Enterprise Storage Systems Tracker show that server market revenues will decline 3.4% year over year to $88.6 billion. It is also predicted that external enterprise storage systems (ESS) revenues will decline by 5.5% to $28.7 billion in 2020 because of the COVID-19.
Negative impact on IT infrastructure markets
COVID-19 which was originated from China and has spread all over the world assumes a broad negative impact on IT infrastructure markets. While IT buyers’ demand expectations are changing, short-term component price increases. IDC research director of IT infrastructure Kuba Stolarski says,
IDC research director of IT infrastructure Kuba Stolarski
“The impact of COVID-19 will certainly dampen overall spending on IT infrastructure as companies temporarily shut down and employees are laid off or furloughed. While IDC believes that the short-term impact will be significant, unless the crisis spirals further out of control, it is likely that this will not impact the markets past 2021, at which point we will see a robust recovery with cloud platforms very much leading the way.”
Therefore, for the second quarter, the impact on other regions will increase. Many businesses are being forced to move to cloud services to meet their compute and storage needs. This growing demand forces the IT infrastructure in cloud service provider data centers.
New IT delivery models are being adopted
This tendency in the market causes two results, decreasing demand from enterprise buyers and increasing demand from cloud service providers. If we look at the bigger picture, a decline essentially in the server market is striking. The external storage systems market will have a sharp fall in 2020. Natalya Yezhkova, research vice president, IT Infrastructure said,
“The IT infrastructure markets are already going though a transformation and shifts in end user spending will bring an even faster changing IT buyer landscape. While the current crisis brings tensions and uncertainty to the market, it also will push organizations to expedite adoption of technologies and IT delivery models that help with optimization of IT infrastructure resources.”
