IT hardware buyers apply brakes

By RICHARD WOOD

Large enterprises have put the brakes on buying IT storage hardware and servers this year, after going overboard last year.

A surprising 96 per cent of New Zealand corporates surveyed by analyst firm Gartner Dataquest in September are not planning big storage acquisition, and 82 per cent are saying no to major server acquisition.

The results are part of a regional survey of 850 enterprises across Asia/Pacific, which was completed in September.

Regionally the "no storage" figure was 75 per cent, which itself was regarded by Gartner as a major headache for vendors.

The regional "no servers" figure was not too bad at 66 per cent.

The reasons behind the abrupt halt in New Zealand are not hard to pinpoint, according to Gartner.

Last year was supposed to be the year of the great IT downturn and many in the industry were looking for a turnaround this year. But while the global IT industry was being squeezed, the local operations of server vendors were pumping product.

Shipping figures from Gartner tell the story, with server shipments locally up 50 per cent during the first three quarters of last year when compared with the same period in 2000.

In the third quarter of last year there was a total of 3072 sold, compared with 1678 in the previous year's third quarter.

"Throughout last year vendor Compaq was aggressively marketing Intel [processor based] servers and we saw direct selling vendor Dell hit the market towards the middle of last year," said Gartner's Asia/Pacific principal analyst for hardware platforms, Mathew Boon.

According to Mr Boon, Dell shipped 510 servers in the third quarter of last year, up from 214 in the same period of 2000. Compaq went to 848, from 480.

"We've seen a lot of growth in New Zealand in the last three or four quarters, and growing at a much faster rate than throughout the region. This tells me that sales are going to slow down considerably."

Mr Boon said storage had also been overdone. The prevailing wisdom, during the IT downturn last year and following September 11, was that the storage industry was recession-proof.

The continuing digitisation of information in all aspects of business was supposed to keep the demand rolling.

He said this was still the case, but from a "raw disk" perspective the growth was not as predicted. Instead, growth was seen as coming more from spending on storage management software.

When it comes to utilising storage Gartner has found that rates within corporates vary markedly among countries, with New Zealand, Australia and India leading the pack at just over 60 per cent.

The Gartner Dataquest report is entitled Asia/Pacific: Server and Storage User Wants and Needs, 4Q01.