Third-quarter sales of servers across the globe showed a 17.3 percent decline from the same quarter in 2008, sagging to $10.4 billion, according to IDC's Worldwide Quarterly Server Tracker.
But server shipments improved, falling only 17.9 percent for the quarter, compared with 30.1 percent in the second quarter, noted the IDC report released Wednesday. Even more promising, shipments grew at a healthy 12.4 percent over the second quarter, the market's largest sequential quarterly gain since 2005.
All three server segments tracked by IDC--volume, midrange enterprise, and high-end enterprise--saw lower third-quarter sales compared with the same quarter last year. Revenue for midrange enterprise servers fell 23.4 percent, while sales of high-end enterprise servers dropped 19.3 percent.
But revenue for volume servers, the lower end of the market, improved over the second quarter and experienced their lowest drop since the third quarter of 2008.
"The worldwide server market exceeded expectations in the third quarter with improving x86 server demand leading the way, which was driven in part by the infrastructure refresh momentum that is building in many geographies," said Matt Eastwood, IDC's group vice president of Enterprise Platforms, in a statement. "In fact, x86 server revenues experienced their largest sequential quarterly revenue increase in nearly five years."
(Credit:
IDC)
Among the major players in the server industry, IBM and Hewlett-Packard vied for first place in both sales and market share with a statistical tie. Big Blue took a 31.8 percent slice of the market, with a 12.9 percent drop in third-quarter sales to $3.3 billion. HP grabbed a 30.9 market share as its revenues fell 16.8 percent to $3.2 billion.
Third-place Dell saw its sales decline only 6.8 percent to $1.4 billion, helping it capture a 13.5 percent share of the market.
With its future cloudy, pending regulatory approval of its takeover by Oracle, Sun Microsystems suffered a 35 percent drop in third-quarter sales to $778 million. Reports have surfaced that IBM and HP, among others, have taken advantage of the uncertainty surrounding Sun to lure over several of its customers.
Bringing up the rear of the top five was Fujitsu, which saw an 8.2 percent drop in sales to $594 million, carving out a 5.7 percent slice of the market, an improvement over its position from last year's third quarter.
Though optimistic that the market will continue to improve in the fourth quarter and beyond, IDC is still waiting to see how the recovery plays out.
"IDC believes that platform migration is once again gaining steam in the market and the post-recession server deployment patterns will establish the technology agenda in the datacenter for the next business cycle," said Eastwood. "For server vendors, after five quarters of market contraction, the next few quarters will be critical to determining the technology platform winners and losers in the years ahead."
All top five server vendors globally saw declines in revenue and shipment in the third quarter of 2009, with Sun Microsystems registering the biggest fall, according to the latest figures from Gartner.
In a report released Monday, the research firm noted that Sun saw its server revenue drop 32 percent and unit shipments dip 38 percent in the third quarter, compared to the same period last year.
IBM experienced a 12 percent decline in revenue growth, though it clocked the highest revenue in the market for the quarter at $3.4 billion. Hewlett-Packard and Fujitsu saw their revenue decline 15 percent and nearly 11 percent, respectively. Dell was the only vendor with a single-digit revenue decline (5 percent) among the top 5 vendors, Gartner said.
Read more of "Sun sets lowest in server market at ZDNet Asia.
Cisco Systems, EMC, and VMware are expected to announce this week a new joint venture to sell data center products and services using virtualization technology, according to report in the Wall Street Journal.
The new products called "V-Block" combine EMC's storage equipment with Cisco's new virtualized services and networking equipment along with VMware's virtualization technology.
In September, The Wall Street Journal reported that Cisco and EMC were in talks to form a new services venture code-named Alpine. V-Block may be this same service.
The products will either be sold as an end-to-end solution that companies can install in their own data centers, or customers will have the option of subscribing to a virtualized service, according to reports.
Cisco has been reselling EMC storage gear for years. It also owns a stake in virtualization software company VMware, which operates as a unit of EMC. So it makes sense that the companies would team up on a new services venture.
Earlier this year, Cisco announced a new data center architecture it calls Unified Computing, which includes new virtualized servers. It also includes coordinated support and software integration from partners such as Intel, Microsoft, EMC, and VMware.
Cisco sees the data center market as a multibillion-dollar opportunity. The company anticipates a greater need for storage and high-speed networking within data centers as more services and content come online. Cisco's corporate customers have also begun to virtualize their data centers to make those operations more efficient.
The joint venture will have its own CEO, according to the Journal.
Representatives from Cisco, EMC, and VMware have declined to comment.
The new joint venture is expected to be announced Wednesday before Cisco releases its fiscal first-quarter results.
Betting that the benefits of the move will outweigh the risks, Yahoo has released the source code underlying in-house software called Traffic Server that can speed up Web site operations.
The software works by moving some data and operations closer on the Internet to the people trying using those services. Yahoo released it as an "incubator" project under the auspices of the Apache Software Foundation, a seasoned organization for managing open-source projects and also the site that houses the Hadoop open-source project Yahoo favors for large-scale data-processing challenges.
Shelton Shugar, Yahoo's senior vice president of cloud computing, plans to announce the move at the Cloud Computing Expo in Santa Clara, Calif., on Tuesday in a keynote speech, but the software actually arrived at Apache last week.
Shelton Shugar, Yahoo's senior vice president of cloud computing
(Credit: Screenshot by Stephen Shankland/CNET)"We've donated Traffic Server to Apache because we think it's a great piece of code, and we want to build a community around that in the same manner we built a community out of Hadoop," Shugar said in an interview.
Traffic Server is a battle-hardened package with more than 200,000 lines of C++ code. Yahoo originally got the software through its acquisition of Inktomi earlier this decade, and it's been using it ever since. Today, the software delivers 30 billion Web objects and 400 terabytes of data each day.
And Yahoo can rightly be proud of Traffic Server's performance: that comes from a surprisingly small number of Yahoo servers--between 100 and 150, said Chuck Neerdaels, vice president of data services at Yahoo. The software is set up particularly to run multiple tasks at the same time, a design well-suited to today's servers with multicore, multithreaded processors.
Source code is what humans write in a higher-level programming language; only after it's been translated into binary machine code can a computer actually run that program. When associated with an open-source project, this software is available for anyone to see, modify, and distribute, in contrast to the locked-down world of proprietary software such as Microsoft Windows. So in effect, Yahoo is allowing others not only to use Traffic Server for their own ends, but also to modify it--for example, by taking advantage of its ability at to accept plug-ins that can adapt it for different tasks.
Giving away the farm?
So isn't there a risk that Yahoo is giving away some pretty important technology that's central to its business? Plenty of start-ups today are trying to grow to Yahoo's scale, and many of them are competitors.
Some Yahoo rival might very well gain as a result, but on balance, the company thinks that it'll come out ahead. For one thing, Traffic Server in isolation is not as powerful as Traffic Server woven into Yahoo's computing fabric, the company argues.
"What we're giving up is a generic building block. What makes it really interesting at Yahoo is how we've connected it with other things to make a bigger service," Neerdaels said. As for Yahoo's major rivals: "We suspect our larger competitors already have some solution they're happy with."
Yahoo expects a number of benefits from broader development and use of Traffic Server.
"We think a lot of folks can benefit from this, and by raising the tide, we think we can benefit as well," Shugar said.
For one thing, making Traffic Server open-source software will mean that people will grow familiar in its use, making it easier for Yahoo to hire engineers who already are up to speed.
"By virtue of basing services on open-source software, we attract people who want to work on open source. They like it, and they like the idea of it. It's a skill they can take with them from one place to another," Shugar added.
For another, Yahoo can benefit from others adapting the software to a broader range of uses, he said.
Gaining influence among developers
There are intangible benefits, as well, when it comes to recognition among programmers, whose influence in some ways makes them the digital elite. Microsoft long ago learned that much of its power comes from developer allies, and Google is trying to put that lesson to good use as well by releasing many open-source projects--Google Chrome being one recent example.
Yahoo isn't in the business of selling technology to others in the manner of Amazon Web Services, Microsoft Azure, or Google App Engine. But having solid technology is essential to Yahoo. While it's willing to sell its search business and engineering skills to Microsoft, it still needs in-house expertise to power its many Web properties and to reduce its operating costs.
Here, Traffic Server is important. For example, one area where Yahoo uses Traffic Server was at Yahoo Sports for handling scores. A regular Web server sends out the Web page to a person's browser, but Traffic Server handles the JavaScript technology that periodically refreshes the contents of a scoreboard element on that page.
It's only a "trickle" of data, but at Yahoo's scale, that can be some pretty heavy work. "When they moved to using the Traffic Server front end, they shaved something like 200 machines off their back end because session management was more efficient," Neerdaels said.
Another part of Yahoo operations retrofitted with the software is Yahoo Mail, he said. Traffic Server can be used to process the cookie text files on a person's browser to figure out whether that person can be logged in automatically or the person needs to authenticate anew. It also can route traffic appropriately when, for example, a person who is "homed" to Yahoo's servers in India visits the site while in the United States.
Traffic Server also manages a lot of more nuts-and-bolts tasks. For example, it can cache Web data closer to browsers so the original Web servers that house the data aren't as overtaxed. And it can store a Web address stored in the Domain Name System to speed up network speeds.
What's it good for?
Some of these chores can be handled by existing software, such as Squid, which is already open source. But Yahoo is on a roll with its open-source work, as the company seeks to advance its internal cloud-computing infrastructure. Expect more to come.
"As various pieces of our cloud get to a point of maturity, we will open-source specific pieces," Shugar said. Future candidates include Yahoo's foundation for hosting its Web applications on a virtualized, more flexible foundation, and its Sherpa and Mobstor services for storing data.
Winning open-source allies can be difficult, and Neerdaels said it takes an engineer a good six months to fully comprehend all Traffic Server's code, so immediate gains beyond fostering goodwill are unlikely.
But in the long run, Yahoo's program could pay significant dividends. Building a series of significant open-source packages could lead to a Yahoo infrastructure that's high-power but more standard than custom-made.
It's not every day that large, significant software packages arrive on the Net in open-source form--much less a series of them that are increasingly relevant to a competitive market of large-scale Web sites.
In this case, Yahoo's gift may indeed become Yahoo's gain.
SAN FRANCISCO--In September, Intel introduced its back-to-the-future idea of tiny "microservers." Now the company wants to make the design into a standard others can use, too.
The chipmaker will offer its design specification to the Server System Infrastructure Forum by the end of the year, said Jason Waxman, general manager of Intel's high-density computing group. If the group's board votes its approval for the specification, group members may use the designs royalty-free, he said in a meeting with reporters here.
"Before the end of the year, it will happen," Waxman said.
An Intel 'microserver.' Click on photo for more images.
(Credit: Stephen Shankland/CNET)The computer industry is in constant tension between proprietary designs and standards that anyone may use. The former can mean tidy profits for companies, as long as the technology is widely adopted, but the latter can spur broader adoption. Intel's primary business, selling processors, benefits more from the latter when it comes to cultivating a new server market segment.
Who's it for?
Waxman believes the servers will appeal to Web site hosting companies that need a lot of servers for relatively low-traffic Web sites.
"At most Web sites hosting providers, do you know what the server does? Nothing. It just sits there," Waxman said, so a low power draw when idle is an important characteristic. But when that request to view the Web page does arrive, it must respond quickly.
Jason Waxman, general manager of Intel's high-density computing group
(Credit: Screenshot by Stephen Shankland/CNET)This sales pitch recapitulates one for first-generation blade servers from early this decade. So what's different now from the first time, when those commercially unsuccessful blade servers were replaced with much more powerful, sophisticated, and expensive models? This time, though the Intel microservers are simple, they have reasonably good performance, Waxman said.
"For the low-end, scaled-out Web hosting space, we think we can put enough power in a low enough power envelope," Waxman said.
What's inside?
The diminutive server consists of a single quad-core processor and four memory banks. Intel showed 16 microservers housed in an 8.75-inch-tall chassis that supplies them all with power, cooling, and a network connection to the outside world. Along the bottom of the chassis is a bay with 16 "sleds" that each has a trio of 2.5-inch hard drives that directly connect to each microserver.
The present microserver uses a 1.86GHz quad-core processor, the "Lynnfield" model of Intel's new "Nehalem" generation. Its top power consumption is 45 watts, but early in 2010, Intel will release a dual-core "Clarkdale" model that consumes only 30 watts when running flat-out.
That's at the top end, though. Intel's goal is for the entire microserver--which also includes memory and supporting chips--to idle at just 25 watts of power.
Mainstream servers are growing increasingly brawny with multicore processors and tremendous memory capacity, but researchers at Carnegie Mellon University and Intel Labs Pittsburgh think 98-pound weaklings of the computing world might be better suited for many of the jobs on the Internet today.
This first-generation FAWN system has an array of boards, each with its own processor, flash memory card, and network connection.
(Credit: Carnegie Mellon University)The alternative the researchers advocate is named FAWN, short for Fast Array of Wimpy Nodes. It's described in a paper just presented at the Symposium on Operating Systems Principles.
In short, the researchers believe some work can be managed with lower expense and lower power consumption using a cluster of servers built with lower-end processors and flash memory than with a general-purpose server. And these days, with green technology in vogue and power costs no longer an afterthought, efficient computing is a big deal.
"We were looking at efficiency at sub-maximum load. We realized the same techniques could serve high loads more efficiently as well," said David Andersen, the Carnegie Mellon assistant professor of computer science who helped lead the project.
... Read the full post at CNET's CES 2010 blogServer sales around the world dropped to $9.8 billion for the second quarter of the year, a fall of 30.1 percent from the same quarter in 2008, according to an IDC report released Wednesday.
The latest downturn marks the fourth consecutive quarter of lower sales and the weakest quarterly server revenue since IDC first started tracking the market in 1996.
Quarterly server shipments also fell 30.4 percent from 2008's second quarter and 26.5 percent from the first quarter of 2009, according to IDC's Worldwide Quarterly Server Tracker. The global recession is still forcing enterprise customers to hold off on server purchases, IDC said.
All three classes of servers tracked by IDC were hit by weaker sales for the quarter. Revenue for high-end enterprise systems tumbled 32 percent from the second quarter of 2008. Sales of midrange enterprise machines dove 28.1 percent, while volume systems slumped 30 percent. This marks the third consecutive quarter that all three segments showed a sales drop.
"Over the past four quarters, the worldwide server market has experienced significant revenue deceleration in all geographic regions as the economic recession has deepened," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "Fewer servers have been shipped over the past four quarters than at any time since 2005 and it is clear that the worldwide server installed base is aging rapidly."
In terms of market share, IBM again hit the top of IDC's list with a 34.5 percent slice of the market on server sales of $3.4 billion. Hewlett-Packard came in second with a 28.5 percent market share based on revenue of $2.8 billion.
Uncertainty about its future may have led to poor results for Sun Microsystems. The company, which has sealed a deal to be acquired by Oracle, sold only $981 million worth of servers in the quarter, for a 10 percent cut of the market. Sun suffered the highest revenue decline on the list, with a drop of 37.2 percent from the year-ago quarter.
"Non-x86 servers did poorly for the quarter overall, and since Sun's business is largely exposed to that segment it suffered because of it," said IDC research analyst Daniel Harrington. "Without a doubt there were also negative effects on their business due to 'Sun Attack' programs launched by both IBM and HP in an effort to go after those uneasy customers. I think you are starting to see the first signs of that in these numbers."
With an economic recovery in sight, IDC is forecasting a brighter future as customers begin to test the waters with new server purchases.
"In the weeks and months ahead, IDC believes that IT customers around the globe will begin to focus on the future once again," said Eastwood, "making strategic computer platform decisions for the next business cycle, and driving more predictable server demand as market conditions stabilize in the second half of 2009."
Microsoft has delivered the next iteration of its flagship database product, SQL Server 2008 R2, to developers for review.
The company released a preview of the software to MSDN and TechNet subscribers on Monday. A community technology preview (CTP) will be available on Wednesday for general download, Microsoft said in a blog post.
SQL Server 2008 R2, previously code-named "Kilimanjaro," is the next generation of the Microsoft SQL Server database platform. The product is planned for release in the first half of next year.
The updated database software lets businesses build their own business intelligence capabilities. It includes a new version of its report-making software, Report Builder 3.0, that can incorporate maps.
"Report Builder 3.0 supports geospatial visualization to produce new insights and discoveries by combining geospatial data with business information," according to Microsoft.
In addition, Report Builder 3.0 allows caching of datasets on the report server when toggling between design and preview modes.
Using the preview, administrators will be able to set up a multiserver environment and enroll instances into a central management component, without having to rely on technical support, said the company.
"New wizards enable administrators to quickly set up a multi-server management environment in minutes--no professional services required," said the blog post.
The SQL Server 2008 R2 is one of a tranche of Microsoft CTPs slated for an August release.
StreamInsight, which is low-latency complex event processing software, will be launched "in the coming weeks," according to the company.
It will be followed by the first CTP for SQL Azure Database, a limited preview of Project "Gemini" Excel and SharePoint add-ins, and a private technology preview of Project Madison, Microsoft's data-warehousing product.
Downloads of the preview are available on Microsoft's SQL Server 2008 R2 Web site.
Tom Espiner of ZDNet UK reported from London.
Worldwide server sales suffered a 25 percent drop in the first quarter, hitting their lowest level in at least 12 years, according to a new report from market tracker IDC.
The report, released Thursday, recorded first-quarter factory server sales at $9.9 billion, a drop of exactly 24.5 percent over the same period a year ago--and the lowest level since IDC began covering the market a dozen years ago.
The number of servers shipped fell 26.5 percent from the year-ago quarter, the smallest quarterly figure in the last five years.
IDC breaks the server market into three segments--volume servers (priced under $25,000), midrange ($25,000 to $499,999), and high-end enterprise ($500,000 or more). For the first time since 2002, all three segments saw lower revenue.
The low end of the market suffered the most, with quarterly sales sinking 30.5 percent year over year. Revenue in the midrange market slipped 13.6 percent, while high-end sales fell 19.5 percent.
"Market conditions worsened in all geographic regions during the first quarter as customers of all types pulled back on both new strategic IT projects and ongoing infrastructure refresh initiatives," Matt Eastwood, group vice president of Enterprise Platforms at IDC, said in a statement.
Among the top five server vendors profiled, Dell was hit hardest, with quarterly server revenue tumbling 31.2 percent. Hewlett-Packard showed a 26.2 percent decline. Sun Microsystems watched its revenue dive 25.5 percent. IBM saw its sales drop 19.9 percent. Sales at Fujitsu/Fujitsu-Siemens fell 18.8 percent.
IBM and HP are the top server vendors, with each owning 29.3 percent of the server market.
On an optimistic note, Eastwood did predict a slight turnaround later this year.
"Most enterprise organizations are deferring new IT procurements and instead focusing on extending server lifecycles and improving existing asset utilization," he said. "IDC believes that while these strategies are effective in the near term, server demand will begin to improve in the second half of the year as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010."
(Credit:
IDC)
Update at 8:25 a.m. PDT: Further attribution has been added.
North Carolina officials are pushing to change state tax law in hopes of attracting new companies, specifically Apple, according to an Associated Press report.
The state is pursuing a $1 billion investment from Apple over a nine-year period to build a server farm, the AP said, citing an anonymous state official. However, the law must be changed to give state officials the ability to attract Apple through tax breaks and other incentives.
The tax breaks offered to Apple would be worth an estimated $46 million over the life of the deal, the AP reported. But Apple must jump a few hurdles itself. The company would have to meet its $1 billion investment target in order to get the tax breaks, the AP said. Apple would also have to locate the server farm in an area of the state with high unemployment--Catawba and Cleveland counties are said to be potential sites for investment.
Offering tax incentives is not a new practice for any state government, but North Carolina does have experience in attracting high-tech companies. Google signed a deal in 2007 worth $600 million to open a server farm in the state for a promised $260 million worth of incentives over 30 years, the AP reported.
The proposed tax changes that could potentially bring Apple to North Carolina are scheduled for a vote Tuesday.
