Cloud is a mess for a lot of things, and is still much more hype than reality, as far as replacing most anything but email, that would otherwise have been affordable in-house (one reality it does bring is lower cost for potential risks, that might later be brought in-house, sporadic short-term needs, or building out from having zero network infrastructure and no need for a domain).
What is happening with traditional servers, though, is consolidation. Between hardware and licensing costs, redundant 1S and 2S boxes can do a good job of handling most workloads well enough for internal uses, and saves space and cost to run. IoW, I really don't see the cloud causing a decline in traditional server sales, as much as, just like desktops, performance of servers has far exceeded, "good enough." Virtualization software being mature enough to not have to constantly fiddle with it, the CPUs getting faster year over year, and storage getting faster and cheaper year over year, is creating its own cycles of unit sales decline, as old server installations are refreshed. Every 5 years or so, you can basically cram about double the crap you could before into a new server of similar cost, and operational cost savings will tend to make up for any added costs for getting a beefier server, or licensing for special software (various VMWare add-ons, backup appliances, VSANs, etc.).
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