Feeds

Server sales do drunk cat bounce in 2010

Bad news for Oracle, better news for Dell

Beginner's guide to SSL certificates

For the last three quarters, the server business has been on the upswing, with strong growth relative to the perfectly awful sales levels set at the end of 2008 and in the first half of 2009. Intel is making money hand over fist, and even Advanced Micro Devices has put some black ink on its bottom line. The server business is back, right? Not so fast.

The server analysts at TheInfoPro have been speaking to what they say is a representative sample of the Fortune 1000 and a slew of midrange customers, and did detailed interviews with 252 of them to take the pulse of the server racket from March through early June. And if you are a server peddler hoping for big bucks later in 2010 and a rebound to 2007 server spending levels in 2011, you are going to be disappointed.

"People keep talking about a server refresh in 2010, that this is a year of recovery," explains Bob Gill, managing director of servers at The InfoPro, which was founded in 2002 by a bunch of Gartner, Giga, and Bell Labs analysts. "We just don't see it. We are not seeing the turnaround we had expected."

It was not a huge surprise to Gill last year when CIOs and IT managers said that they would be cutting back on server spending in 2009, given the state of the economy, but it was the first time since the company was founded that this had happened.

Now, 2010 is being given the dubious honor of being the second time when TheInfoPro's server survey is projecting a decline in server spending for the year. (Granted, the company does not have 20 years of data. But then again, IDC and Gartner, which have been around forever, only have data from the 1990s forward as well.)

In the latest survey, 38 per cent of IT shops said they were cutting their overall server spending in 2010, with only 25 per cent saying they planned to increase their budgets. Another 37 per cent said their budgets would be stable (meaning the budget was 5 per cent higher or lower than 2009's spending levels).

That is actually a bit worse than IT shops were expecting when they were polled about their 2010 plans back in the third quarter of 2009. If you look at the more recent polling from IT shops for 2010 spending on server gear, the cuts are deeper than the increases on a weighted average basis, which means server budgets as a whole are trending slightly down.

Looking ahead to 2011, the situation looks somewhat more optimistic, says Gill, with 39 per cent projecting flat spending for servers and 33 percent expecting to increase spending; but 29 per cent of those polled are expecting cuts.

Gill concurs with something that many of us have been predicting for years, which is that the virtualization effect would cause a downdraft in server footprint sales. "Server virtualization has permanently dampened hardware unit demand as virtualization's footprint grows within the enterprise," Gill wrote in his latest server report.

In an interview with El Reg, Gill said that vintage machines that were due to be replaced - many of them which were due to be replaced in late 2008 or throughout 2009 - are indeed being replaced this year. And new workloads are getting new iron, as they typically do.

Security for virtualized datacentres

More from The Register

next story
It's Big, it's Blue... it's simply FABLESS! IBM's chip-free future
Or why the reversal of globalisation ain't gonna 'appen
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
CAGE MATCH: Microsoft, Dell open co-located bit barns in Oz
Whole new species of XaaS spawning in the antipodes
Microsoft and Dell’s cloud in a box: Instant Azure for the data centre
A less painful way to run Microsoft’s private cloud
AWS pulls desktop-as-a-service from the PC
Support for PCoIP protocol means zero clients can run cloudy desktops
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.