Vendor revenue in the global server market contracted for the first time after nine quarters of "historic" growth, according to IDC.
The analyst reported that the second quarter of 2019 saw revenue decline 11.6 per cent year on year to just over $20bn (£16.3bn) - the first decrease since Q4 2016.
A slowdown in demand from cloud providers and hyperscale customers were factors in the decline, IDC added.
All classes of server were affected, with high-end systems revenue experiencing the biggest blow, contracting 20.8 per cent to $1.3bn. Volume server revenue was down 11.7 per cent to $16.3bn and mid-range server turnover was down 4.6 per cent to $2.4bn.
"The second quarter saw the server market's first contraction in nine quarters, albeit against a very difficult compare from one year ago when the server market realised unprecedented growth," said Sebastian Lagana, research manager of infrastructure platforms and technologies at IDC.
"Irrespective of the difficult compare, factors impacting the market include a slowdown in purchasing from cloud providers and hyperscale customers, and an off-cycle in the cyclical non-x86 market, as well as a slowdown from enterprises due to existing capacity slack and macroeconomic uncertainty."
The long-running battle between Dell and HPE for market share resulted in a tie in Q2.
Dell took a 19 per cent share of the market, with HPE hot on its heels with 18 per cent.
IDC declares a statistical tie in the worldwide server market when there is a difference of one per cent or less in the share of revenues or shipments among two or more vendors, resulting in the two rivals having to share the crown.
Both suffered a year-on-year decline in their revenue, with Dell seeing a 13 per cent fall to $3.8bn and HPE a three and a half per cent decrease to $3.6bn.
Third-placed Inspur saw its share of the market grow 32.3 per cent to $1.4bn. The top five was rounded out by joint fourth-placed Lenovo and IBM, who saw their revenue slide 21.8 per cent and 27.4 per cent, respectively.
Some say performance, others say money but it may be systems and processes that carry the day
Microsoft and Accenture entity buys up €12m firm
This week is the deadline for the Channel Innovation Awards. So, why is it worth celebrating innovation in the market today?
NTT Security CEO on the rise of 'bad-guys-as-a-service', Orange's security M&A spree and NTT's integration roadmap
In part one of CPI's Security Summit series, editor Josh Budd sits down with NTT Security's CEO Matt Gyde