IT analyst Gartner says that worldwide Power i server revenues were down 31.5% to just over $180 million in the first quarter of 2009.

In the last issue of iNEWSWire UK, we reported rival analyst IDC's estimate that first quarter Power i revenues were down 44% in EMEA from the same period a year ago. According to Gartner, revenue for i OS-powered hardware in EMEA was actually only down 28% compared to the same period last year, although the platform also dipped by 16.7% in the first quarter of 2008. Within those figures, the analyst says that sales of older "legacy" System i hardware have nearly dropped off the radar with a 90.8% decline in Q4, 2008 and 89% in Q1, 2009.

UK-based Gartner senior analyst Errol Rasit is keen to stress that contrary to previous reports in this newsletter and others, his firm is still keeping a close eye on the i.

"As a part of our quarterly statistics definitions we still continue to publish an IBM i number, or i5 or AS/400 or whatever you want to call them these days," he says. "Our research has been continuous so we’ve tracked the migration of the i business from the legacy System i, as IBM would refer to it, to the new Power Systems."

Looking at the AIX side of the Power Systems equation, Rasit says that sales were strong last year and the year before that. In the Unix server space, Sun's message on Sparc was slightly confused and HP had already migrated much of its base to Itanium-based hardware. And contrary to analysts' expectations, there was still strong demand for high-end model 595 beasts even though new Power 6 processor-driven model 575s and lower were offering big leaps in performance and capacity. But then the recession caught up with the Power p and as IBM sells far more AIX-driven Power Systems than their i-driven counterparts, that meant a bigger hit overall.

"Unfortunately, the economy took its toll and it has affected every single part of the market," says Rasit. "I can barely think of a region that has escaped it. I can barely think of a vertical market that has escaped it. I can barely think of a product segment that has escaped it as well."

The analyst points out that even sales of blade servers, which have risen exponentially since their introduction in 2002, hit the buffers and fell for the first time in the first quarter 2009.

"We haven’t seen declines like this in the market place since records began in these terms," he says. "I think we’re at a 2005 level of revenues now and a 2002 level of volumes. Unfortunately, IBM, like its competitors, couldn’t buck that trend and the results kind of speak for themselves. The first decline we saw for AIX was minus 7% in Q3 of 2008 and then Q4 and Q1 were slightly worse – minus 13.7% and minus 13.5% for AIX year-on-year. So you can see that between the decline of i and AIX, you’re looking at about 10 percentage points going up to about 20 percentage points between the two product lines, but in absolute terms AIX has shed the most."

Rasit does predict a decline, albeit a fairly gradual one, in the i's fortunes over time. But he believes that IBM is not going to walk away from the platform and will continue to support it as long as its life is "foreseeable".

He says: "I suppose you could almost view that part of the market as an iceberg in that it’s a very large market in terms of customers that are out there, it’s quite broad and spread out and it will take a long time to melt as customers gradually migrate away from the platform. But there’s still value in that platform today and IBM are doing quite a good job, I think, of providing an environment that is cost-effective for these customers.

"The Power System is a great example of that – if you were to go to a blade chassis, for example, as an IBM customer, you can mix in an X86 blade and you can run an AIX blade or an IBM i blade alongside it and manage it all through IBM Director so you don’t have to buy a unique system to run your i apps, you can run them alongside existing architecture."