Server Market Faces Disruption in 2014

Zewde Yeraswork, EETimes
1/14/2014 09:54 AM EST

NEW YORK — Public clouds and virtualization will cause a major shift in the server market in 2014 that’s already underway, according to one server analyst.

Additional factors that influence the shift include: the presence of white box vendors -- contract manufacturers who create the product for others to brand -- in Taiwan especially, Chinese cloud companies who will do business locally but not with the traditional US-based server vendors, and the emergence of high-density servers and microservers.

US-based companies are active in the cloud segment, but their performance is expected to fluctuate quarter by quarter. While the overall server market is projected to grow, the increase is likely to be sluggish.

Sameh Boujelbene, senior analyst at Dell Oro, said that she expects a modest increase in server shipments for 2013. “Virtualization has been impacting server purchases and the move to more private and public clouds has really affected their purchase behavior,” she said. Boujelbene said the portion of servers in the cloud is going to grow, but the servers sold to the enterprises are going to decline. “That’s a fact,” she said, “everyone agrees.” Some analysts are optimistic about the enterprise market, but they say it will grow at a slower rate.

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