It seems like only yesterday that the need for big data storage and servers exploded on a global scale, sending stock prices through the roof and putting even the smallest server manufacturers on the map as the market soared at a CAGR of over 31 percent.
So everyone lived happily ever after, right?
Not quite.
The Global Servers Market has had incredible success in the past. Unfortunately, for the 2013-2018 forecast period, TechNavio analysts have identified key factors that are hindering market growth at a CAGR of only 0.5 percent.
What Happened?
During the 2012-2016 forecast period, companies worldwide heavily invested in servers to cope with the influx of enterprise data usage. Since, the market has faced stagnation. Simply put, enterprises outgrew their server technology and with high implementation costs, most companies looked to the alternative: virtualization.
Virtualization Technology
Virtualization technology has a major impact on the way enterprises are designing their computing infrastructure. With the increasing adoption of virtualized computing infrastructure, enterprises are finding it easier to manage their work. Adopting virtualized technology enables enterprises to run multiple servers on the same equipment, reducing the demand for additional servers.
Furthermore, virtualization technology addresses problems such as scalability and manageability, which is driving the demand for such solutions among enterprises. By eliminating a traditional server, enterprises can enjoy many perks like:
- Data virtualization
- Desktop virtualization
- Application virtualization
- Storage virtualization
- Network virtualization
- Hardware virtualization
Network administrators are able to monitor and efficiently manage the working of the data center infrastructure using virtualized server infrastructure. Virtualized computing equipment also has the potential for higher productivity compared to traditional computing equipment.
Is there an upside for the Global Server Market?
In short, yes! As the market stands, almost 75 percent of servers are X86-based and, until recently, had an impressive adoption pattern. With the adoption of X86-based servers, enterprises are able to gain access to a wide range of applications which can be easily supported on this platform. But this soon backfired as an overdependance on component suppliers occured.
However, a new trend is emerging in the market that shows enterprises choosing to build customized “In-house” servers rather than buying from vendors. These custom servers are especially popular with companies that are heavy into social media/internet marketing.
Thanks to the Open Compute Project (OCP) Foundation, “whose mission is to design and enable the delivery of the most efficient server, storage and data center hardware designs for scalable computing”, X86-based technology isn’t just available through component suppliers anymore.
According to the OCP website, they want to “enable the development of the most efficient servers, storage and data center infrastructure from a useful work per total cost perspective, in order to bring computing to people at the lowest cost and widest distribution”.
By developing these custom servers, OCP makes it much easier for enterprises to invest in the server that they want, without needing constant and costly upgrades.
If this project succeeds, and others follow in its footsteps, there should be no reason why the Global Servers Market shouldn’t see a vast improvement in the years to come.
For more information, view our 2013-2018 Global Servers Market report.
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