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Virtualisation and cloud computing are key aspects of the storage, server and networking industries today.

Many companies are now providing technology to enable a virtualised environment or encouraging people to move into a cloud, pushing the energy as well as hardware savings.

For a business this can be great. The less hardware you need the lower the cost, be it power and cooling, the staff to manage it or the initial outlay to buy a product.

But for the vendors both big and small this will also mean less hardware is being purchased.

Are cloud/virtualization solutions/projects affecting sales? In many ways yes, but let’s step back for a second, the market for servers can be challenging this year as a result of economic conditions, many might be holding off on buying more servers/IT equipment until they see how sales/revenue is, or maybe trying to get a little more ‘value’ than simply refresh their hardware.

We’ll have to see, for the SMB market we need to evaluate whether they need a server, or could use a cloud service to provide their email/backup/file server solutions – though the data protection and ownership issues might present a challenge. There’s still the tactile element, I like to see/own the systems that run my business, handing it over can seem a step to far – though it depends on your relationship with your IT.

In the enterprise market, sales will be down probably, but those buying servers will be ‘filling their boots’, those organizations migrating data centers, integrating new businesses all need new servers either for their virtualization projects, to standardize on ’standard platforms’ or simply to ensure we’re not moving a server when we can provision and supply one already in place in the new data center.

Cloud/virtualization changes the server market from one of application teams buying servers for their need, to application teams buying service they need within the enterprise. The IT within the enterprise is therefore becoming indirectly a service provider, once that happens, I wonder how long the server as an asset will be kept – will we not keep refreshing the hardware because the applications aren’t tied to the server? That the barriers to doing so are removed – I’ll keep buying the latest and most efficient servers every 18-24 months and bin/recycle it rather than keeping the server for a thousand years, because it’s just too much to move that application off it.

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One Comment

  1. lukeshutler says:

    So, are cloud/virtualization solutions/projects affecting server sales? Well, I’d say you’re absolutely right to bring in the economic argument. While the server market can be challenging this year, the root cause is in the economic downturn rather more than any threat from the uptake of interest in cloud computing or virtualisation solutions. So, I wonder whether this is a question we should be asking ourselves at all?

    Leaving the server sales argument to one side, virtualisation and cloud computing could well create a market where ‘apps teams buy servers’ to a market where ‘apps teams buy services’ but simply put, cloud computing and virtualisation are evolutions of data centres and both are business delivery models that require a mix of software, services and hardware – a trio that will always be complimentary and co-exist in any infrastructure, virtual or otherwise.

    We at IBM have been focusing our efforts around creating a hardware, software and services stack that brings together the strengths of the web-centric cloud computing model and today’s enterprise data center, providing dynamic allocation of computing resources for a mix of workloads on a massively scalable, secure, heterogeneous and virtualized infrastructure

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