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Does Cloud Really Hamper Server Sales?

Common sense suggests that mainstream cloud adoption will gut server sales, but that's not really happening, analysts say. Here's why.

server, and that number is much higher globally, according to Techaisle data.

"It is a fallacy to assume that all first-server businesses will migrate to a cloud server," Agrawal said. "With security, server configuration, and managed services, the cost of using a cloud server could easily exceed $2,000 per month, which over a long period exceeds the cost of a new server substantially."

3. Collaboration and mobility: "interesting dichotomies"
Agrawal elaborated on those dichotomies: "On the one hand, there can be a completely SaaS application-based approach; but on the other, a more robust deployment has been on-premises or hybrid deployments. And mobility is essentially seamless and secure delivery of applications to multiple screens. This usually requires the deployment" of virtual desktop infrastructure or desktop-as-a-service. "And businesses from small to large that use VDI usually have to upgrade servers, storage, and network bandwidth. This opportunity may be in the form of tower servers, rack servers, and blade servers."

4. Internet of Things (IoT): server innovation catalyst?
Wait, what? Isn't the IoT all-cloud, all the time?

Yes, by definition, the IoT is kind of an online thing. But Agrawal expects the business of IoT to actually drive demand for new kinds of servers. "Granted, cloud is an important component for IoT, but with exceptional levels of security requirements and large amounts of proprietary data being collected, collated, and analyzed, it is difficult to imagine all implementation to be on cloud-based servers."

5. Big data: big server and storage needs
Another trendy topic, big data, is poised to force infrastructure upgrades as more companies give green lights to data-related projects.

"Big data initiatives in large enterprises put pressure on infrastructure and force server [and] storage upgrades," Agrawal said. "As proof-of-concepts get completed and move on to become full projects, businesses will spend more on compute and storage platforms as big data project deployments will require better and updated storage, servers, and other analytical solutions."

The bottom line: Cloud computing is changing the traditional server, but it's not eliminating it. "Businesses will continue to purchase servers, smaller-sized, energy-efficient performance servers with or without integrated storage and networking capabilities," Agrawal said. "Adoption of cloud servers will continue to increase but only for some workloads. The decision will come down to cost, security, comfort, [and] business objective."

Private clouds are moving rapidly from concept to production. But some fears about expertise and integration still linger. Also in the Private Clouds Step Up issue of InformationWeek: The public cloud and the steam engine have more in common than you might think (free registration required).