Worldwide, server revenue declined 24% in the first quarter of 2009 compared with the previous year's first quarter, and server shipments dropped an almost identical 24.2%. These were the largest year-over-year declines the server industry has experienced in recent memory, Gartner says.

"It was the biggest drop [we've seen]," Gartner analyst Martin Reynolds says. "The astonishing thing is it's a bigger drop than we saw after the dot-com crash."

Analyst firm came to a similar conclusion last week when it said worldwide quarterly server 24.5%   year-over-year to $9.9 billion -- the lowest revenue total seen since IDC began tracking the quarterly server market 12 years ago.

Virtualization technologies that let servers run multiple applications at once have lessened the need to purchase new machines. But economic turmoil is clearly the biggest factor in customers delaying or canceling server purchases.

"If your business isn't growing, you don't need to buy any new servers at all," Reynolds says.