IDC Forecasts Worldwide Appliance Server Market Explosion
- By Scott Bekker
The worldwide appliance server market is expanding at breakneck speed. A new
report from IDC estimates that the worldwide appliance server market will
develop into an $11 billion industry by 2004, from a market that was
significantly under $1 billion in 1999.
Appliance servers will be adopted by both enterprises and small businesses, IDC
says, but for different reasons. "Today's service providers and dot-coms
are demanding reliable and scalable solutions to provide dedicated functions
for their organizations. Alternatively, many small offices and businesses are
looking for inexpensive, reliable ways to build a network and to get their
business connected to the Internet," said Mark Melenovsky, research
manager with IDC's Worldwide Commercial Systems and Servers research program.
IDC (www.idc.com) warns that the explosive
growth of the appliance server space will come at a cost. According to IDC,
portions of the appliance market will be highly cannibalistic of the
traditional space - in other words, appliance servers will take market share
from general-purpose servers. Additionally, general-purpose server vendors will
begin customizing parts of their traditional server offering, effectively
turning their machines into appliance servers as well.
IDC sees 2000 as a pivotal year for appliance servers. The analyst firm
predicts that the market will become more diverse and that high-growth areas
will focus on specific applications and specific end-user segments.
According to the IDC report, Solutions in a Box: Appliance Servers Shake
Up the Server Community, network attached storage (NAS) will represent the
largest opportunity for appliance servers, accounting for more than half the
market's value through 2004. Revenues in the Web server segment, however, will
increase the fastest. The compound annual growth rate (CAGR) in this segment
will be more than 130 percent, compared with a 73 percent CAGR for the overall
market. - Isaac Slepner
Scott Bekker is editor in chief of Redmond Channel Partner magazine.