Enterprise server sales decline after 15 years of steady growth

After the financial crisis of 2008 and companies and business groups turning to digital business, the amount of server sales has been accompanied by significant growth every year. Let’s see the peak of this growth in 2020, which can be attributed to the corona virus epidemic. But it seems that this growing trend has stopped after 15 years and companies show less desire to use enterprise servers.

According to a new report from research firm Omdia, the priorities of businesses are changing, and many of those that previously used the services of large cloud providers are moving towards artificial intelligence-based computing.

According to some analysts, companies and cloud service providers are very concerned about missing out on a wave of market opportunities brought about by intelligent chatbots like Chatgpt. As a result, these ensembles lead to the training of artificial intelligence models. Many buyers have delayed getting general-purpose servers, preferring to make a significant investment in AI servers.

Examining market data provides us with interesting results. In the first quarter of 2023, only 2.8 million servers were sold, which is significantly lower than the seasonal sales average. In fact, the decline in server sales from the fourth quarter of 2022 to the first quarter of this year was the largest decline in server sales in history.

Meanwhile, Omdia analysts predict a 12% decline in server sales in 2023, as the sales of servers configured with artificial intelligence processors have seen an unprecedented increase. The demand for Microsoft, Google and Meta servers has grown a lot in the first quarter of this year, and this acceptance by businesses can be attributed to the focus of these technology giants on artificial intelligence programs such as Bard, Copilot and I-JEPA.

Another reason for the decrease in the sales rate of servers is the increase in their average useful life. Analyzes show that the useful life of a server is now 6.2 years, which was only 4.1 years a decade ago. Meanwhile, according to some European server providers, the useful life of servers sometimes reaches 9 to 10 years.

The results of these reports show that although companies’ need for computing is increasing; But companies prefer to use calculations based on artificial intelligence models and they are looking for their future in this technology.