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IDC: Server Appliance Market Booming

Analyst firm IDC remains bullish on the appliance server market, predicting worldwide revenues of $31.4 billion in 2005 and the emergence of appliances for e-mail, gateways and databases.

IDC calculated revenue growth in the appliance market was 166 percent last year. Going forward, IDC pegs compound annual revenue growth for the worldwide market at 56 percent, taking worldwide revenues from $3.8 billion in 2000 to $31.4 billion in 2005.

Mark Melenovsky, manager of IDC's Global Enterprise Server Solutions research, says the appliance movement rose out of demands for integrated hardware/software solutions and the move to standardize software workloads, server components and hardware.

"In addition to offering solutions, appliance servers also address ease of use and deployment along with robust system management tools to deliver a solution that reduces the demands being placed on IT personnel. This alone is a significant enough reason to expect these devices to continue to grow quickly," Melenovsky said in a statement.

Network attached storage or filer appliance servers will account for roughly 55 percent of the market's revenues through 2005, IDC predicts. Security appliance servers are the largest segment of the market in terms of unit shipments, according to IDC.

The analyst house currently segments the market into six workload categories – multifunction, Web serving, caching, security, filer/storage and other. IDC expects additional categories such as e-mail, gateway and database appliances to emerge over the next five years.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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