What's in Store for 2005?

2005 promises to be a good year for data center managers on the lookout for new servers and storage kit, according to analyst firm IDC (see IDC Makes 2005 Predictions).

The firm today unveiled its technology predictions for the coming year, which contained good news for businesses looking to purchase new hardware. Commoditization and downward pricing pressure are the two big trends for 2005, Frank Gens, IDCs senior vice president of research, explained during a teleconference earlier today.

Data center managers will be rubbing their hands at the prospect of the server price cuts that have characterized the last few years continuing. This is being driven, in no small part, by the growing popularity of blade servers, according to IDC’s analysts (see Get Set for Server Savings and 64-Bit Blades Battle).

Gens points to Dell Computer Corp.’s (Nasdaq: DELL) entry into the blade server market last month as evidence of the sector's strength, and explains that the U.S. will lead 2005’s blade charge, followed by Western Europe and Asia/Pacific (see Dell Releases Blade Server).

But blades are not IDC’s only hot technology for the coming year. (see The Heat Is On and Data Center Heat Wave). Low-cost, high-capacity drives will force similar price cuts in the storage market.”Of the storage arrays shipped in 2005, almost 20 percent will be in the form of low-cost, high capacity drives," says Gens.

IDC is not the only analyst firm to notice this trend. Goldman Sachs & Co. recently produced a report that highlighted growing enterprise demand for low-end storage hardware, suggesting that the technology is breaking out of its traditional SMB (small and medium-sized business) niche. With companies shifting their older and less critical data on to cheaper storage media, this is driving the popularity of low-end storage arrays (see IT Spending Coughs & Splutters).

There could also be some good market opportunities coming up in Japan for storage and networking vendors, according to IDC. Next April, the Japanese Government is expected to enact legislation to support the use of electronic documents in business, which could have major implications for suppliers, according to Gens.

The analyst also pointed to some of 2005’s key verticals. These include the manufacturing sector, which is currently looking to drive supply chain efficiency, and the financial services sector, where banks will be looking to consolidate their payment systems. In the aftermath of the recent Vioxx debacle, the life sciences industry could be another potential money-spinner for vendors. Increasingly, Gens feels, life sciences firms will be building systems to monitor drug safety, and if necessary, take them off the market.

— James Rogers, Site Editor, Next-gen Data Center Forum0