Research figures from IDC indicate server sales fell of a cliff in the first quarter of this year, sales were down 25 percent year-over-year to $9.9 billion. The research firm says this is the lowest figure since the firm started monitoring the server market 12 years ago.
Dell was the vendor hardest hit, with server revenue falling 31.2%.
IDC said they expected the situation to continue, although they predicted some recovery by 2010.
"Market conditions worsened in all geographic regions during the first quarter as customers of all types pulled back on both new strategic IT projects and ongoing infrastructure refresh initiatives," said Matt Eastwood, IDC's group vice president.
All three server sectors - volume, midrange, and high-end systems - registered a decline in sales. This is the first time this has happened since 2002.