Blade Server Sales To Explode - Report

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The El Segundo, Calif.-based analyst firm on Thursday published a report in which it estimated that blade server shipments will reach 2.4 million units in 2011, up from 620,000 units sold in 2006 and this year's estimated 856,000 units, for an overall cumulative annual growth rate of 31.5 percent.

That compares to a CAGR from 2006 to 2011 for servers in general of only 7.4 percent, reaching 11.3 million units in 2011 compared to 7.8 million units last year, iSuppli said.

In other words, according to iSuppli, about 21.6 percent of all servers sold in 2011 will be blade servers compared to only 7.9 percent in 2006.

The growth is being driven by the growing enthusiasm for server virtualization and consolidation, as well as the adoption of technologies such as multi-core and low-power processors.

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Yet despite the growth in sales, iSuppli estimates that the average selling price will fall an average of only 3 percent during that time, hitting $3,605 dollars in 2011, down from $4,189 last year and $3,967 this year.

The reason, said iSuppli, stems from the fact that customers tend to find new and ever more complex ways to consume increased computing power, and will find that blade servers will lead them to run more demanding applications and operating systems, keeping the servers from becoming commodity products.

Solution providers are already seeing a spike in growth of blade server sales, and expect this growth to continue unabated for the foreseeable future.

Rob Wolfe, president and CEO of AvcomEast, a Vienna, Virg.-based Sun Microsystems solution provider, said his company has seen blade server sales increase by five times in the last couple months thanks to the introduction last June of Sun's new Sun Blade 6000 family.

"It's lower-priced than the older Sun Blade 8000, and cuts power use by 20 percent," Wolfe said. "And it's absolutely flexible. You can use SPARC, Intel Xeon, or AMD Opteron processors, and run Solaris, Windows, Red Hat, and SUSE Linux."

Wolfe said the Sun Blade 6000 is letting Avcom do something it found difficult to do in the past -- bring Sun technology to customers who shunned the vendor in the past.

"In our Sun base, customers are starting to move towards x64 platforms, and this is a big help to them," he said. "And it is also helping us open new Sun customers. We're now opening a new Sun customers every 10 days or so."

Pete Elliot, director of marketing at Key Information Systems, a Woodland Hills, Calif.-based IBM solution provider, said his sales of IBM blade servers are also growing fast, especially as customers look to consolidate more servers into fewer boxes with VMware server virtualization.

"Server consolidation has become an industry-wide standard when wrapped around virtualization and VMware," Elliot said.

Key has been able to consolidate as many as 30 legacy customer servers onto a single blade server using VMware, Elliot said. "Most of the time, we can consolidate 10 [servers] or 15 servers to one blade," he said. A lot has to do with customers wanting smaller footprints in their data center, and you can pack a lot more on blades than on other form factors."