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.