Changing Landscape of the Server Business

Based on our extensive research and market study of semiconductors, electronics and technology sectors over the past one year, we have come up with the following top trends in Traditional Server Market  for 2013.

The traditional server market which was and is currently dominated by Intel processor based products is undergoing significant changes on multiple fronts. These changes can be primarily attributed by the need of small and big corporations alike to reduce costs associated with purchase and maintenance of servers. More and more servers need to be added every year at a company’s datacenter due to the exploding data usage among customers and the power usage of the traditional servers even when they are in idle mode makes them ineffective cost-wise. However the need to maintain 99.99% uptime of the websites or data availability makes these costs necessary. The year 2012 has seen several initiatives to solve this problem and is detailed below:

  • —Microservers: Microservers or Fast Array of Wimpy Nodes (FAWN) are servers which stack multiple mobile processor chips which consume less power into a single product. These servers use Atom or Centeron chipsets from Intel or the ARM mobile chipsets which are well known for their low power consumption capabilities. The idea is to split an application’s duties into tiny pieces and spread them evenly across the network. SeaMicro and Calxeda are the prominent companies producing Microservers. Hewlett-Packard has announced that its Project Moonshot will be using ARM and Atom microprocessors and that the microservers market is expected to account for 15% of all server sales by 2015. HP is also working with Calxeda to produce these FAWN machines. Recently, AMD purchased SeaMicro validating the change that servers built from hundreds of low power processors will work just fine. Compared to traditional server systems up to 89% less energy and 94% less space is used by Microservers, while reducing overall costs up to 63%.
  • —Cloud Computing: Cloud computing is not new to the market and it has already reached a scale where large corporations are actively using these services to reduce server overheads. However, MarketsandMarkets expects this to further proliferate into the medium and small sized businesses aggressively in 2013 due to the realization of cost benefits offered by companies like AWS (Amazon Web Services). Microsoft Office 365, Google Docs and Rackspace etc.
  • —Build Your Own Server (BYOS): Companies like Google, Facebook and Amazon have been designing and building their own servers, networks using partners in China and Taiwan for a long time. These companies need huge datacenters across multiple locations across the world to maintain uptime and meet demand from their users. As such the servers from Intel, HP and Dell are costly although they are also manufactured in Asia and hence cutting the middle man out will provide significant cost savings. Companies like Quanta, Compal, Foxconn and Flextronics are the ones who do the manufacturing based on designs provided by their customers.
  • MarketsandMarkets expects this trend to further proliferate by using direct servers manufactured from Asia in their data centers by other big companies like Apple, Samsung etc in 2013.

 

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