Rackmount Server Sales Surge

  • Written By: R. Krause
  • Published: August 17 2000

Rackmount Server Sales Surge
R. Krause - August 17, 2000

Event Summary

July 31, 2000 - IDC reports that unit sales of rack-optimized Intel-based servers increased over 55% from 4Q99 to 1Q00, compared with a 2% decline for the overall Intel server market.

In the meantime, major Intel server vendors are planning to increase their rack-optimized products offerings in the coming months.

Market Impact

This trend has been obvious for a long time, so we're surprised it took the market so long to catch up to the pundits. Levity aside, we have been anticipating a shift from a pedestal-centric model to a rack-centric model for a while. (see "Dell's High-End Rackmount Servers - Challenging Compaq's Wintel Dominance") Vendors and customers have been getting the "grow up not out" (GUNO) message. Recent figures indicate an increase in momentum toward that model. Although one quarter's numbers hardly mean an overwhelming trend, the 50+% increase in the face of a 2% decline of server sales overall shows its strength. IDC has estimated that 94,000 rack-optimized servers were sold in the US in 1999, we believe the figure is closer to double that amount.

We believe the major part of the reason for the stunning increase is the recent acceptance of "server appliances" and "thin" servers, systems that are usually rack-mounted. These small, focused-functionality devices - typically caching servers or Web servers - have experienced tremendous growth in recent months. Rather than buying an eight-CPU, 7U-high (1U = one "rack unit" = 1.75" high), companies like ISPs are choosing to buy 1U-high servers that have one or two CPUs. The incremental cost to add a server is significantly lower for these units, making them desirable for companies expecting healthy growth but still watching the dollars.

Whatever the reason, we expect vendors and consumers to increase their focus on rackmount servers in the coming year.

User Recommendations

Although rackmount servers are not for everyone, they have a lot of built-in advantages: no-footprint-increase when adding more systems (up to a point); easier administration (everything's in one rack, the admin can check fault-light status at a glance); centralized equipment.

Small companies with clearly bounded requirements should still consider pedestal/tower configurations before moving to rackable systems. For these companies, the usual growth issues relate to disk storage space, and they should just buy a system with enough base features and internal expansion capability. In addition, vendors are increasingly designing their pedestal systems to be rack-mountable, so users should look for this capability. However, buying a rack-optimized system is not necessary at this stage.

Mid-size and large companies, especially those expecting an increase in traffic/usage (either internal or external), need to look at servers that best address their needs. Users need to understand if the usage will be compute-intense, storage-intense, transaction-intense, I/O intense, etc., and base their purchase decisions accordingly. For general-purpose computing, you should consider a system with a good balance of CPUs, disk drives, PCI slots, and so forth. For Web caching or serving, go for an appliance, maybe buy some rackable external storage, plan to buy more later.

comments powered by Disqus