Blog
Server demand dips as downturn bytes
1st June 2009
The seasonal surge in user demand for the Tutor2u blog and other online resources last year caused our rather ancient server to crash leaving the website lying low for a while. So this year we are watching the performance of our new upgraded server with added interest. Elsewhere the recession has caused steep cutbacks in IT investment as businesses scale down their spending on upgrading systems or postpone them until conditions improve.
The result has been a sharp fall in revenues and profits for the server industry which is a good example of an olgiopoly. According to this BBC news article, the five big server vendors - HP, IBM, Dell, Sun Microsystems and Fujitsu/Fujitsu Siemens - all suffered a double digit percentage drop in revenue. And incomes have fallen for server operating systems hitting businesses such as IBM and Microsoft - an example here of the concept of derived demand.
Click below for other related blogs on the idea of derived demand
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.