The worldwide managed server market declined by one-quarter in the first quarter of this year, it has been revealed.
Research carried out by IT industry analyst IDC found factory revenue in the worldwide server market declined 24.5 per cent year over year to $9.9 billion (£6.2 billion).
Matt Eastwood, group vice president of enterprise platforms at the group, commented: "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."
He went on to say that enterprise organisations are deferring new IT procurements and are instead trying to extend managed server lifecycles and improve asset utilisation.
Mr Eastwood added that demand for dedicated servers will begin to improve in the second half of the year as firms look to rebuild ahead of economic recovery in 2010.
Last month, managed services provider Utropicmedia Global Solutions commented that the hosting sector is making greater use of virtual application servers as companies attempt to deliver software-as-a-service with fewer limitations.