The Virtualization Room

Mar 21 2007   9:41AM GMT

Server sales slip on virtualization

Alex Barrett Alex Barrett Profile: Alex Barrett

One of the overarching questions I’ve had since I started covering virtualization is how will it influence the kinds of server purchases IT managers make? Is it better to buy several small, slim servers, e.g., blades, or a single large and beefy one? Now we know. Virtualization is prompting IT managers to buy fewer larger boxes, richly configured with multi-core chips and oodles of RAM. So much so that yesterday, the venerable market research firm IDC did something it seemingly never does: changed its server sales forecast in a downward direction. An article on ZDnet states:

IDC on Tuesday lopped 4.5 million units off its forecast for the number of x86 servers to ship in the second half of the decade after concluding that virtualization and multicore processors are cutting into purchases.

That 4.5 million number is a major change–about 10 percent of the servers the market analysis firm had expected would be sold from 2006 to 2010. In addition, the firm trimmed its spending forecast by $2.4 billion.

But at the same time, I’ve had countless conversations with executives from the first- and second-tier server vendors that virtualization remains a key area of focus for them, that sure, what they lose in quantity of servers sold, they’ll make up for in quality of servers sold, blah blah blah. Now, I’m no MBA, but ten bucks says that the IBMs, Suns, Dells and HPs of the world are going to find ways to offset their losses. Need lots of memory? Great — but don’t expect any huge price reductions on 4GB DIMMs. Need more I/O? Don’t just add another Gigabit NIC, why don’t you upgrade the whole kit-and-kaboodle to 10Gig Ethernet?! You get my drift…

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