November 28, 2006
Virtualization Slowing Server Sales
Virtualization.info recently posted an link to an article on InfoWorld stating that Q3 server sales are down and that Gartner attributes this to virtualization. I think that this trend is still in the infancy stage. I work with a lot of companies who are still just starting to play with virtualization.
Over the next few years I think that virtualization will become a standard in the industry. As a result this will impact companies like HP, IBM, and Dell resulting in fewer total server sales, however I this doesn’t have to mean the end of these companies. As more and more companies adopt virtualization as a standard, they will stop needing lots of small server. Instead they will move away from 1 & 2 CPU systems to 4 & 8 CPU systems.
It will be interesting to see how Dell will react to this. Dell has a reputation for being extremely aggressive in the server sales arena, many times taking a loose on margin just to win a deal.
Off the topic: Don’t think my silence about the recent Microsoft / Novell agreements means I don’t have an opinion about it. My head is still spinning and I need a little time to develop an appropriate statement. I will say however, that I think this may bring about the first “fork” in the Linux source.
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