Finance sector leads in global server revenue

The financial services industry continued to lead all vertical markets in server revenue, as it accounted for 25.3 percent of worldwide server revenue in 2007, according to Gartner. Total world server revenue in 2007 was US$54 billion.

The finance sector includes three major subsegments: investment services, banking and insurance. Global server revenue for the sector was US$13 billion.

The communications market was a distant second at 14.4 percent, or US$7 billion. The government market was the third vertical, with 11.5 percent of total server revenue. This amounted to US$6 billion.

In Hong Kong, financial services accounted for 43.8 percent of Hong Kong server revenue in 2007. This is followed by the services sector which accounted for 15.2 percent for the same period.

Credit crunch

"The recent US credit crunch negatively impacted the US financial services sector's server spending towards the end of 2007. Large projects were delayed or reduced into smaller projects because of financial institutions' weak financial performances and concern over the economic outlook," said Kiyomi Yamada, principle research analyst at Gartner.

"However, we did not see serious spending cuts on a global basis. Many financial institutions need to continue to invest in their servers to gain competitive advantage through their IT infrastructure upgrades."

The global communications sector's growth (11.3 percent year on year) outpaced all other major verticals in 2007 because of spending increases on network upgrades and strong broadband demands.

"Server consolidation and server upgrades continue to be the main driver for the revenue growth in the financial sector in order to stay competitive," said Annie Chung, principal research analyst, Gartner. "The heavy loading of stocks transaction in 2007, together with increasing businesses relationships with the mainland, was the key to boosting server revenue in the mentioned sectors."