Server Market Sees Uptick

The server market is finally seeing an uptick after more than two years of steady decline"one of those indicators that observers look at when trying to determine how well the IT economy is recovering as a whole. But it may be hard to project servers onto the entire market; much like the situation in the PC market, server sales aren't growing in the best way possible"sales of large systems to enterprise customers. Rather, the surge in servers is coming mainly in low- and medium-priced systems, according to market researcher IDC.

Is that bad? Not necessarily. For one thing, says IDC, the growth of cheaper servers indicates a move toward large-volume deployment, a good sign, as companies seem willing to spend to meet exponentially increasing data-movement needs in spite of tight budgets. The sales figures also means good news for companies targeting the market with more inexpensive servers: IBM, Hewlett-Packard, and particularly Dell saw excellent quarterly gains. That leaves Sun (a longtime purveyor of more expensive, proprietary server hardware) as the chief loser in the equation. Indications are that the company has already smelled the coffee and awakened to its need to go after revenue share in the smaller-margin space. Sun plans to add x86-based technology from Intel and Advanced Micro Devices to go alongside its proprietary SPARC-chip server line. The continuing competition will be good for smaller consumers.

Still, how to fix things in the large-enterprise market? One answer, perhaps, is blade servers, and the IDC figures bear that out. The study tallied 50,000 blade server sales for the quarter, almost half of the year's total to date. Blades"which allow large shops to stack more server equipment in smaller spaces and to easily swap out units as needed"seem to be gaining more momentum and attention from both manufacturers and users. Blade manufacturers still need to solve some basic heat-dissipation questions, as server rooms stack more equipment, and observers add that better management software needs to accompany blade equipment.

But networking needs are just going to continue to increase, and the combination of a robust blade market with the standard server market may be just the thing to keep the server space growing into 2004.

RELATED ARTICLESServer Market Grows For Second Consecutive Quarter - TechWeb

The worldwide server market grew by 2 percent in the third quarter, a higher-than-expected jump that was driven primarily by demand for low- and medium-priced systems.

Blades Advance In The Data Center - Storage Pipeline
Blade servers will likely be at the heart of utility-computing environments, which should enable business-technology managers to shift server, storage, and networking resources to respond in real time to business demands.

Sun Serves Up Refreshed Product Lines - TechWeb
In moves designed to bolster the company in the hotly competitive server market, Sun Microsystems unleashed a barrage of 20 products at a marketing event in Germany.