Government // Mobile & Wireless
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1/13/2011
12:11 PM
Lamont Wood
Lamont Wood
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Is The SMB Server Market A Bubble?

Some say the sky is going to fall in 2011. But what's been holding it up?

Some say the sky is going to fall in 2011. But what's been holding it up?A recent tech item in Forbes.com quotes an analyst who thinks that, after experiencing 30 percent revenue growth last year, the market for x86 servers (which is what SMBs usually get) will see its growth rate slump to 5 percent in 2011. The rebound from the 2009 slump is over. The result will be a painful pileup among vendors and suppliers as their markets dry up.

Actually, during all this growth I have been pointing out that the combination of cloud services and virtualization means that most SMBs don't need to buy servers at all. If they already have servers they can use virtualization to avoid needing more, and if they don't have servers they can use the cloud to avoid ever needing any.

But by the way I've been ignored I assume that chances are good that Forbes will also be ignored and that x86 servers will keep charging ahead. Apparently, desktops are seen as tools for generic tasks like word processing and accounting. But the servers are used for whatever thing it is that sets the SMBs apart and creates their place in the market. The processes going on inside the servers are their factory, in other words. The users want total control over those processes, and don't want to bother with the complications of virtualization, especially when hardware is cheap. The cloud is another complication, although they may use it to augment the servers (and for bulk file transfers.)

At least that's the vibe I get. So while the sky ought to be falling, it isn't. It would not be the first time that the pundits were wrong.

Or I could be wrong, and turn out to be right.

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