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Global Economics

Slower Growth for Server Shipments

Market researcher IDC trims its forecasts for server shipments and spending because customers are buying fewer, more powerful systems

IDC has lopped 4.5 million units off its forecast for the number of x86 servers to ship in the second half of the decade after concluding that virtualisation and multicore processors are cutting into purchases.

That 4.5 million number is a major change - about 10 per cent of the servers the market analysis company had expected would be sold from 2006 to 2010. In addition, IDC trimmed its spending forecast by $2.4bn.

It said: "Overall, x86 [server] shipments that were once projected to increase 61 per cent by 2010 are now facing just 39 per cent growth during that same period."

The reason for the change is that customers are buying fewer, more powerful systems, according to IDC. Virtualisation lets a single system run multiple operating systems simultaneously, while multicore processors amplify the consolidation trend by enabling individual servers to handle more work.

EMC subsidiary VMware leads the market for x86 server virtualisation, which lets a single physical machine house multiple operating systems in compartments called virtual machines. Xen, an open source competitor commercialised by XenSource and others, is now built into the prevailing versions of Linux, Red Hat Enterprise Linux and Novell's Suse Linux Enterprise Server. And Microsoft plans to release its own comparable technology, code-named Viridian, in 2008.

IDC forecast the number of servers used to run virtual machines will increase significantly from 2005 to 2010. In 2010, 1.7 million physical servers will be shipped to run virtual machines - 14.6 per cent of the total shipments compared with 4.5 per cent in 2005.

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