Server costs will rise next year, users warned

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Server costs will rise next year, users warned

Arif Mohamed

Analyst firm IDC has warned technology buyers that server costs are likely to rise across the board next year.

According to IDC, this follows a long period where costs fell by around 20% a quarter as suppliers competed hard for volume sales and servers used more commodity components and technologies.

Martin Hingley, vice-president of IDC's European systems group, said, “The average price of servers in Europe typically dropped 20% each quarter – from the largest mainframes to the smallest blades. But we think that server prices will go up on average over the next few years staring next year."

Hingley attributed the price inflation to three factors: the dollar increasing in value against the euro; the addition of 64-bit servers to the mainstream, with the addition of memory above 4Gbytes in size; and higher software licensing costs as a result of the rise in dual and multicore processors. “These things will boost server prices,” said Hingley.

Gartner vice-president George Weiss said, “The server market will see big changes in the next three years. Multicore and multithreading technologies will mature, Linux will challenge Unix in datacentres, and hypervisors will be the main virtualisation software.”

But he added that organisations could achieve savings in hardware costs from server virtualisation. “This will come almost entirely from reducing the hardware and from related savings in other areas, such as space, power and cooling,” he said.


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