Web services to create $4.3bn hardware market

As IT moves to adopt web services, IS managers will end up spending more money on hardware than on software, according to an IDC...

IS managers will end up spending more money on hardware than on software as it moves to adopt web services.

IDC analyst Vernon Turner predicted that the move to web services would create a $4.3bn (£2.6bn) hardware market by 2007. Software spending will reach $3.4bn (£2bn), while spending on services would account for $7.5bn (£4.6bn) - nearly half of the $15.2bn IDC expected IS managers to be spending on web services four years from now.

IDC estimated that total spending on web services will approach $3bn in 2003.

"Even though your revenues in the traditional hardware field are flat, you have to expand your opportunity," Turner said.

In a recent survey of IT buyers, Turner said more than 80% of respondents were planning at least an "incremental hardware purchase" as part of their web services plans. More than 30% expected to buy "all new" server and storage hardware. 

The IDC analysts expected to find that web services would typically be deployed on existing hardware, and that the web services hardware market would not be significant.

"In fact, the data has shown the exact opposite," Turner said. "We were actually surprised when we saw the hardware numbers."

The survey also found that 90% of respondents expected to be deploying web services by 2004, and that 77% expected to roll them out by this year.

Turner said that many of the hardware sales enabled by web services would be generated by switching "serious" workloads, such as database and transaction-oriented jobs, to commodity systems.

"If you can build modular architectures that are highly granular... you can start to remove workloads that were on the high end to a 2U server," he said.

Robert McMillian writes for IDG News Service

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