Server sales do drunk cat bounce in 2010
Bad news for Oracle, better news for Dell
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.
I used to wonder why Gartner and friends existed - who would want a report on the server market?
Sadly i now realise that the people who use and need these reports are the money people who directly or indirectly affect the share prices by buying or selling.
This means that no matter how much an El Reg reader (read: IT professional in some form) might think a report content is nonsense, said report can still make or break a company/product!
Re: so Windows and Redhat the winners
No we are running Sybase 15 on Solaris 10. Since you opened the conversation, I have already transferred all my data and schema from Sybase to SQL Server and done the tests. This is a massive system to transfer so no margin for errors, or jokes. My SQL Server runs on my PC 3.4G Ram, 2 core, the Solaris box is a proper production box with 32G memory, don't want to give much detail for obvious reasons. Any ad-hoc query like count, group by anything I've thrown at it runs quicker on my PC SQL Server. I have 20m rows in some tables. The more complicated stuff still runs much faster on SQL Server. I challenge you to do the same, if Sybase wins I'll buy you a beer or 2.
I think this is a Sybase shortcoming not Unix but don't have time or space to run Sybase on a Windows box. I know the optimisation on Sybase is no good so wasn't surprised but was surprised by the margin, ranges from 1.5 to 5x.
Re: so Windows and Redhat the winners
"We are moving a big chunck to Windows from Solaris, Sybase gets migrated to SQL Server for performance reasons (but that would be next year)."
Good luck with that one. if you are expectiong a performance increase, I guess that you are running Sybase System 10 on Solaris 2x...