Pender's Blog

Blog archive

Virtualization Hacking Away at Server Revenues

OK, so it's much more likely that the economy is to blame than VMware is, but server revenues were down pretty sharply year-over-year in the second quarter of 2009.

While most of the 30 percent overall drop in revenues is likely down to companies having smaller IT budgets or putting off spending, some of it -- according to an analyst at IDC, the firm that prepared the revenue report -- is the result of server and software virtualization.

Now, the server market isn't going away, and we're sure that it'll bounce back to some extent when (if) the economy as a whole does. But it's clear that the market is changing and that virtualization is driving that change. The server business as a whole likely won't be the cash cow it has been for Microsoft and partners in the past. A nice little earner, sure. But a bonanza? Probably not.

As we mentioned last week, VMware is a real threat to Microsoft's enterprise business, which explains why Microsoft is working so hard to catch VMware in virtualization. This isn't a battle between two (or more) companies on the same playing field; it's a battle between two computing models and, for once, Microsoft isn't the market leader in one of them.

At least not for now. Redmond is catching up with VMware in terms of technology, and although the EMC offshoot remains the virtualization market leader by some distance, it can feel the behemoth breathing down its back.

Still, it's virtualization technology, not just VMware, that's taking a chunk out of server revenues. That means that (as we've said here before) Microsoft will have to balance its money-spinning server business with the virtualization business it desperately hopes to grow. That means that partners will have to do the same thing. Hopefully most channel players have adapted to the new model by now. If not, now's the time.

One interesting little note from the IDC numbers: The fall in year-over-year Linux server revenues (13.8 percent) was much smaller than that of Windows Server revenues (27.7 percent). Take that for what it's worth.

What's your take on how virtualization is affecting your server business? How have you coped with this changing computing model? Sound off at lpender@rcpmag.com.

Posted by Lee Pender on 09/09/2009 at 1:22 PM


Featured

  • OneDrive Users To Get Storage Options, Plus New Personal Vault

    Microsoft announced a few OneDrive enhancements, including storage-option additions, plus a new "Personal Vault" feature for added security assurance.

  • Cloud Services Starting To Overtake On-Prem Database Management Systems

    Database management system (DBMS) growth is happening more on the cloud services side than on the traditional "on-premises" side, according to a report by Gartner Inc.

  • How To Replace an Aging Domain Controller

    If the hardware behind your domain controllers has become outdated, here's a step-by-step guide to performing a hardware refresh.

  • Azure Backup for SQL Server 2008 Available at Preview Stage

    Microsoft added the option of using the Azure Backup service to provide recovery support for SQL Server 2008 and SQL Server 2008 R2 when those workloads are hosted on Azure virtual machines.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.