Why (and How) Low-Cost Servers Will Dominate

Or, why high-end servers will be obviated by software...

I begin this blog with a true story. 2 weeks ago I was training a new Account Executive about the virtues of server automation, I/O virtualization, converged networking, etc. To his credit (or mine?), within the first hour he blurts out "then if a customer uses this stuff, they should be able get five-9's of availability from run-of-the-mill hardware, right?"

And that's the point: The age of high-end, super-redundant, high-reliability servers is slowly coming to an end. They're being replaced by volume servers and intelligent networks that "self heal". (Head nod to IBM for coining the term, but never following through)

I pointed-out to my trainee that folks like Amazon and other mega-providers don't fill their data centers with high-end HP, Sun or IBM gear anymore. Rather, companies like Google use scads of super-inexpensive servers. And if/when the hardware craps-out, it is software that automatically swaps-in a new resource.

It's like the transformation back in the late 1700's with Eli Whitney and mass production, where mechanical systems - including the now-famous Colt revolver - were made to simple, standard, interchangeable specifications. Similarly today, rather than hand-crafting every system stack (software, VMs, networking - everything) we're moving to a world where simple, standard HW and configurations can do the 99% of the job. And it's the software management that simply works-around failed components. This trend in IT was noticed back in 2006 (probably earlier) as the "Cheap Revolution" pointed out in a now-famous Forbes Article.

So what's the punch-line here? I believe that the vendors who'll "win" will be those who are effective at producing low-cost, volume servers with standard networking... But most of all, the winners will be effective at wrapping their wares in a system that is designed for automatic interchangeability.

To wit: in a recent IDC study, while all server sales segments were forecast to fall in 2010, the Volume segment was the only one expected to experience a gain.

I believe that the days for buying super-high-end, high-reliability servers are numbered (for all but some of the most critical telco-grade apps). The Dells of the world have an opportunity; and the Suns, HPs and IBMs will need to re-think the future of their "high-end".

Were I a vendor with a strong volume server play, I would continue to push on hardware pricing, and begin to emphasize a hardware/network self-management strategy.

One other (slightly random) analogy. Shai Agassi's Better Place company *isn't* a car company. It's really a software and networking company. With the right network and infrastructure, the vehicles are efficient and always have a 'filling' station to keep running. Similarly, IT is transforming from it "being about the hardware" to being about how the hardware is networked and managed. Think about it.