Server and storage revenue to drop in 2020 due to coronavirus: IDC

The latest IDC report indicated that revenue from server and storage business will drop in 2020 due to the spread of coronavirus.
Netmagic data center IndiaServer market revenues will decrease 3.4 percent to $88.6 billion in 2020.

External enterprise storage systems (ESS) revenues will dip 5.5 percent to $28.7 billion in 2020.

The server market is expected to drop 11 percent in Q1 and 8.9 percent in Q2 and then return to growth in the second half of the year.

The ESS market is forecast to dip 7.3 percent in Q1 and 12.4 percent in Q2 before returning to slight growth by the end of 2020.

China will see the greatest negative impact in the first quarter of 2020 while other regions will start to experience the impact in the second quarter.

Industries such as transportation, hospitality, retail, etc. are facing significantly reduced consumer activity and business closures and others are being hit by an unexpected wave of demand for services, including video streaming, Web conferencing, and online retail.

Many businesses are considering the adoption of cloud services to fulfill their compute and storage needs. This spike in demand put pressure on the IT infrastructure in cloud service provider datacenters leading to demand for servers and system components.

As a result, the IT Infrastructure market has two submarkets going in different directions: decreasing demand from enterprise buyers and increasing demand from cloud service providers. This dynamic is impacting the server market the most, resulting in a moderate decline for the overall market in 2020.

The external storage systems market, with a higher share of enterprise buyers, will experience a deeper decline in 2020, said Kuba Stolarski, research director, IT Infrastructure at IDC, in a statement.

The server market is expected to deliver a compound annual growth rate (CAGR) of 4.9 percent over the 2019-2024 forecast period with revenues reaching $116.6 billion in 2024. The external ESS market will see a five-year CAGR of 1.3 percent growing to $32.4 billion in 2024.

The IT infrastructure markets are already going through a transformation and shifts in end user spending will bring an even faster changing IT buyer landscape, said Natalya Yezhkova, research vice president, IT Infrastructure at IDC.

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