Computing - Server
Opportunities and Possible Pitfalls Facing Blade Servers
July 29, 2002 / Peter Lin / Computer System Research Team
3 Page, Radar

Abstract

In 2001, Compaq and HP beat competitors IBM, Dell, and Sun to the punch with the release of one-way blade servers. Following the HP-Compaq merger in 2002, each company's respective blade server lines will continue to coexist. HP's blade servers will target the telecommunications market, while Compaq's ProLiant blade servers will be intended for general use. In addition, HP has released two-way and four-way blade servers to seize a portion of the e-mail hosting and lower-end database market. However, in view of the poor performance of the global economy and corporations?lower IT expenditures, this Radar will examine the likelihood of whether these new products will be able attract corporate users and drive server sales.  

Looking at the demand side, considering the global economic recovery will not be especially strong in 2002, and due to uncertainty regarding the outlook for the information industry, lower IT expenditures will result in fewer server sales worldwide.  On the supply side, the present lack of unified specifications for blade servers will slow the spread of this product. Over the short term, it will be difficult for blade servers to attract new or replacement purchasers from the corporate sector. At this point in time, server vendors' release of a product with which corporations are unfamiliar will have difficulty snatching an increased market share.

As price competition heats up, forcing server profit margins down, server vendors will be able to make up for the lost profits through the management software sold with blade servers. Additionally, the capacity-on-demand advantage of this product, which allows users to add blades as needed rather than replacing the entire machine, will likely further boost sales. As the economy begins to gradually recover and corporations look to save physical space, in the long term, blades will replace bulky pedestal servers, and compete on the same level as rack mount servers.   

 

To get MIC's complete insight, please log in.