Server costs set to rise, warns IDC

The cost of servers is likely to rise next year, analyst firm IDC has warned.

The cost of servers is likely to rise next year, analyst firm IDC has warned.

According to IDC, this follows a long period during which costs fell by about 20% a quarter. This was due to suppliers competing hard for sales and servers using more commodity components and technologies.

"The average price of servers in Europe has typically dropped by 20% each quarter, but we think that server prices will go up on average over the next few years, starting next year," said Martin Hingley, vice-president for the European systems group at IDC.

He attributed this price rise to the dollar increasing in value against the euro, the rise of 64-bit servers with larger memory, and higher software licensing costs as a result of dual-core and multicore processors. "These things will boost server prices," said Hingley.

George Weiss, vice-president at analyst firm Gartner, 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 gain savings in their 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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