Tuesday, March 20, 2007

Sun winner as IDC validates Jonathan Schwarz's Bus Metaphor

As I wrote in a recent post The comeback story of Sun, Sun seems to have made some good solid bets in hardware and they seem to be paying off. Jonathan Schwarz recently wrote a post on the move towards bigger servers entitled The Glamor in Mass Transit. The latest IDC report on servers confirms his core arguments. Here are some excerpts from the IDC release:
According to IDC's updated forecast, multicore and virtualization will cost the x86 market more than 4.5 million shipments and $2.4 billion in customer spending between 2006-2010. Overall, x86 shipments that were once projected to increase 61% by 2010 are now facing just 39% growth during that same period.

Other highlights from this study include;

  • Server revenue growth rates will be lower in comparison, but are reduced to a lesser extent than shipment growth rates as customers deploy more richly configured systems in terms of memory, disk, and I/O to balance the increase in processing and server utilization.
  • Despite the decline in the number of physical shipments, over the forecast period, growth in the number of effective processors continues to climb at a 25% annual rate due to multi-core technology advances.
  • The number of virtual servers rises dramatically at a CAGR of 40.6% during 2005-2010 so that by the end of the forecast period, more than 1.7 million physical servers will be shipped for virtualization activities resulting in 7.9 million logical servers. This represents 14.6% of all physical servers in 2010 compared to just 4.5% of server shipments in 2005.

The big winners of this trend would be companies like Sun and VMWare. Software vendors for database and storage servers could also benefit as the number of effective processors continues to grow at 25%. This is one reason per core pricing may be here to stay.

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