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Server sales do drunk cat bounce in 2010

Bad news for Oracle, better news for Dell

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The latest survey from TheInfoPro shows server software spending growing in 2010, with "fantastic growth" projected for Microsoft this year, and Red Hat and VMware are expected to do well, too. Only four per cent of IT shops polled by the consultancy said they were cutting their Microsoft server software spending, with 29 per cent saying they would boost it and 67 per cent saying they would hold steady.

For Microsoft, the main propellant for its Windows Server business is the fact that the R2 update of Windows Server 2008 is "fully cooked and ready to go," which means companies that had been waiting to upgrade until R2 are going to do it now. It is a safe bet that the Windows Server 2008 R2 upgrade cycle is what will drive the bulk of server spending in 2010.

However, if customers virtualize - most likely using VMware's ESX Server and related vSphere tools - the odds are that their footprint count will stay the same or decline. The Microsoft spending numbers would seem to indicate that many shops expect to keep their Windows-based server footprints about the same, with some increasing.

Only nine per cent of IT shops said they were cutting spending on Red Hat's soft wares, with 41 per cent holding pat and 50 per cent increasing their budgets. About 18 per cent of CIOs and IT managers polled by TheInfoPro said they were chopping their VMware budgets - perhaps to move to Microsoft, Red Hat, or Citrix Systems products for server virtualization - but 42 per cent said they would hold steady and 40 per cent said they would boost their VMware spending.

As far as server hardware vendors go, Dell is currently doing the best in terms of recovery from the economic meltdown. "Dell was the first to fall off the railroad tracks and is it rebounding first," says Gill. About 30 per cent of IT shops said they would be boosting their spending on Dell server iron, with 20 per cent making cuts and half saying they would stay about the same. About 31 per cent of companies said their budgets for Hewlett-Packard gear would increase this year, compared to 26 per cent making cuts and 43 per cent remaining the same.

Big Blue is more or less in balance, with 27 per cent expecting to raise server spending on machines with the IBM label, 48 per cent staying the same, and 25 per cent making cuts. Gill says that IBM's System x business "is poking its head out of the hole" and that "Power6 and Power7 customers are completely in love with IBM and they are not going anywhere."

Which leaves Oracle, formerly known as Sun Microsystems, as far as the server racket is considered. "On the hardware side, there is a fairly horrific story for Oracle, but with a silver lining," says Gill.

The spending pie chart for Oracle servers for 2010 is split almost perfectly into three pieces, with a third saying they will spend more on Oracle iron (by definition, they would almost have to, considering how far Sun's sales collapsed in calendar 2009), one third staying the same, and the remaining third cutting back.

The reason is that there are two types of Solaris customers. The first were people using Sun iron and Solaris as a base for Oracle databases, and these people are thrilled that Sun's servers have found a home. The other people - mostly developers, software companies, financial services firms with lots of custom code - picked the Solaris and Java stack for their applications and Oracle databases to back-end them they are not happy about Oracle owning the whole stack.

Many of the latter have been looking at using Red Hat's stack for software and moving to new iron, generally x64-based servers. Gill says that "an extremely high" 21 per cent of Oracle's server customers are planning to dump Oracle iron for something else, and 26 per cent on top of that are thinking about it.

The silver lining is that a small portion of customers (a few percent of those polled) who were in the process of moving off Solaris and towards RHEL have stopped their migration and are buying the Oracle stack. ®

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