Wednesday, August 4, 2010

South African Server Market: Current and Future Trends

The South African server market has undergone some interesting changes in the past years and this newsletter serves to provide some more insight into the local server market dynamics.

The total server market declined 19% year-on-year during 2009, as global economic conditions created havoc with IT budgets, especially when refreshing hardware. The slowdown in IT spending had the biggest effect on PCs and servers, as IT decision-makers were forced to extend the lifespan of their hardware in order to make the most of reduced IT budgets.

That said, reduced IT budgets acted as a catalyst for x86 servers as competitive pricing and diversified usage of these servers replaced many of the more traditional EPIC, RISC and CISC server environments.

Source: IDC EMEA Server tracker Q1 2010
The above chart indicates the adoption rate of x86 server technology, clearly demonstrating that x86 architecture is taking market share away from the others. We are not only seeing this trend in unit terms but also in revenue terms due to the increased performance capabilities of multi-core, 64-bit x86 servers that encourage end-users to adopt them for mission critical applications and databases.

Source: IDC EMEA Server tracker Q1 2010

The above chart indicates the current composition of the server market in terms of rack factor. Compared to a year ago, in line with the worldwide trend, there has been a dramatic increase in blade servers as a result of the focus on optimisation and efficiency.

Specifically, today's IT decision-makers are required to reduce cost, and the IDC estimates blade servers will account for 25% of overall server shipments in SA by 2014. Blade servers have been driving demand because of their ability to reduce floor space within data centres.

The most recent models have improved tremendously in terms of expanded memory and reduction in hot spots. Vendors have also started shipping blades with storage and networking within the chassis to encourage blade architecture within the data centre. Blade servers are also widely associated with virtualisation projects.

IDC believes the future of the local server market in the country will be driven by three key areas, namely: 1) Lowering costs through investment in virtualisation, cloud computing and SaaS; 2) Aligning business and IT for competitive advantage; and 3) Risk management in turbulent times.

To be successful in this market in the coming years, vendors and partners will need to educate their customers about the solutions available to them with the focus on the long-term strategic difference these technologies can make to the client's growth, competitive position and success in the future.

IT Web

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