ARC Servers: Racking Up Sales In the Server Market

While server performance generates the most buzz, physical issues such as form factor probably should be of more concern.

"How little space can I take up and get maximum scalability? That is where service providers are calling up vendors and saying, 'Look, guys, every inch counts,'" says Joyce Becknell, director of computer platforms and architectures for Boston-based Aberdeen Group.

Service providers are filling rooms from floor to ceiling with rack-mounted servers. The cost of real estate is causing them to demand rack-dense servers from hardware vendors, says John Enck, research director of server strategies for Gartner Group, Stamford, Conn. "There's lots of competition from all the players, both RISC and Intel, to create more and more powerful servers that are extremely rack-dense," he says.

These rack-optimized servers are designed to fit into standard 19-inch racks, according to IDC, Framingham, Mass. And, while shipments in the overall U.S. market for standard Intel architecture servers declined 2 percent from fourth quarter '99 to first quarter 2000, the rack-optimized segment of the market grew an impressive 55.2 percent, IDC found.

"Internet-related workloads driven by service providers, dot coms and enterprise data-center procurement will positively affect growth in this space during the next few years," says John Humphreys, an analyst with IDC's commercial systems and servers research program.

In addition to size, service providers and corporate users are concerned about heat, Humphreys says. "Companies are finding they have to design around heat dissipation. If you mount 42 of these in a standard rack, there's a lot of heat buildup, so thermal designs are becoming big talk around the industry."

Because of horizontal scaling in the service-provider marketplace,providers using redundant, almost throw-away, servers,white-box vendors also have significant traction, Humphreys says. VA Linux and Penguin are examples of small vendors that are successfully specializing in rack-optimized servers, he says.

But major vendors may muscle them out, Humphreys cautions. "We fully expect that bigger dot coms and service providers will deploy branded solutions as the IBMs of the world introduce products into the rack-optimized space," he predicts.

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