Apps & Software

Server Sales Follow PC Sales Down The Toilet (HPQ) (DELL) (MSFT) (INTC)

It would make sense that as businesses cut back on spending for PCs they would also cut back on the purchase of servers. One of the things computers and servers have in common is that the chips made by Intel…

By Douglas A. McIntyre
Published February 25, 2009, 6:12am ET · 1 min read

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It would make sense that as businesses cut back on spending for PCs they would also cut back on the purchase of servers.

One of the things computers and servers have in common is that the chips made by Intel (INTC) two years ago are powerful enough to handle most of the processing done on machines today. That makes it easier to defer buying new machines.

What server companies must have imagined was the next piece of bad news has come true. According to research firm IDC, server sales dropped 13% in the last quarter of 2008. Reuters reports that “IDC said it was the steepest decline since the dot-com bust nearly seven years ago.”

Those hurt by the fall-off where the usual suspects: Dell (DELL), IBM (IBM), HP (HPQ), and Sun (JAVA). Of course, Microsoft (MSFT), which supplies a large number of servers with their operating software, also is a casualty.

What may be just beneath the surface of the news is that the recession may not be the only reason the server sales are dropping. Virtualization software from companies including VMWare (VMW) and Microsoft are allowing fewer servers to do more work. If that is true, even with an economic recovery, the server market will never be as robust as it once was.

Douglas A. McIntyre

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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