Serving Good Times

As we took an audit of the Indian server  market for fiscal 2004-05, the
results brought to fore the buoyancy the server market demonstrated over the
year with the x86 server market growing by 29% in unit terms. During the same
period, the UNIX servers also grew at a healthy rate with BFSI, Telecom, and
Energy verticals driving the market. Right now, the x86 accounts for 50% of the
total server market. A major trend in the server space relates to the emergence
of the dual core processors and the evolution of the x86 64-bit platform. Most
of the vendors aver that by 2007, x86 32 bit systems would be almost phased out.
As we trace the evolution of the 64-bit architecture, AMD should be credited
with pioneering the dual core processors in the x86 space with backward
compatibility. This development kick started the market movement towards x86
64-bit from the 32-bit platform.

Intel brought in Itanium 2, 64-bit, but the drawback was that Itanium is a
pure 64-bit platform. During the last year, Intel announced the EMT 64T
extensions to its Xeon processors that enabled users to run both 32 bit and 64
bit applications. Quips Alok Ohrie, vice president-systems and technology group,
IBM India; "This was a good move because the customers were forthcoming in
adopting this platform since the investment would remain protected. Moreover,
the advance hardware features that came with the new systems designed for these
new processors resulted in much better performance over the 32-bit processors
based systems of previous generation. Even for the same set of 32-bit
application and 32-bit Operating System, the performance on new systems was at
least 20% better."

The 64-bit x86 migration

As applications become more mission critical, more enterprises will adopt
the 64-bit platform due to more reliability and stability it brings to the
table. Says Ohrie, "Over the past one year, the adoption has reached the
levels in excess of 95% for the two-way x86 servers." The move from 32-bit
to 64-bit computing offers a dramatic improvement in performance and
reliability, enabling people to use computing resources in exciting new ways.
Reflecting on this, KP Unnikrishnan, marketing director, Sun Microsystems India
says, "The value of a processor with a wider data path (8, 16, 32, 64 bits)
is that it increases the amount of data that can be handled and processed inside
the CPU during a single cycle. Only now (in x86 market) are we beginning to see
software that takes advantage of 64-bit computing. Going forward, the 64-bit
CPUs will be ubiquitous enough that a game developer, application author, or OS
manufacturer will design a product that does not just use a 64-bit system for
enhancements, but utilizes its capabilities as a fundamental part of the end
product."

Clearly, 64-bit is the in thing in the server space. As enterprises scale up
their servers with application scenarios calling for more processing power, the
shift to 64-bit is inevitable. The market response vendors are getting for the
64-bit CPUs in recent times is very encouraging. For instance, Sun Microsystems
over the last fiscal has grown and consolidated its position in the x86 64-bit
market. This has been achieved primarily as a result of Sun's focus and thrust
on its line of Opteron based servers. As 64-bit computing makes its presence
felt in the x86 server space, customers of one-way and entry-level two-way
servers are graduating to high-end two-way. For Sun, since the month of
February, two million downloads of Solaris 10 has happened, more than 70% of
which were on the x86 64-bit.

The affordability factor

Notwithstanding the technology migrations, the key for success of any
technology lies in users adopting it. Given that, affordability plays a key role
when one takes an enterprise view. It is a well-known fact that CIOs today look
at various cost optimization measures. Says Ohrie: "The affordability
factor plays a key role in the server market today. And it has gained greater
significance over the years, especially with the SMB players who are making
large IT investments. Today, IBM offers servers for Rs 48,000. That makes it
affordable for a very small business."

Vendors are also adopting open standards that are taking affordability to new
levels. According to industry experts, affordability is not about reducing costs
by increasing volumes, it is also about using industry standard technology
combined with best of design skills to reduce the overall cost of ownership.
Quips Ohrie, "The best example of affordability is the blade center
servers. It uses the same Intel processor like most of our competition. It uses
the same chipset, power supplies, switches, and hard drives that industry
standard servers use. But it reduces your cost of hardware ownership by 54%,
space by 90% and overall cost of ownership, over a period of time, by a
staggering 70%, that comes out of power savings and maintenance costs."

In the affordability paradigm, blades are ushering in a whole new dimension
to TCO and RoI. For instance, a blade puts in 28 processors into a 7U chasis
that incorporates much more than a normal chasis. The chasis holds the power
supply for all the 28 servers, it integrates the switches, cooling fans, USB
ports, PCI slots across these servers and reduces the server to bare bone
essentials-like processor, chipset, hard disks. Thus, customers save on
unwarranted power supplies, cooling facilities, which would have to be purchased
separately when one buys stand-alone servers. The technology is so attractive
that customers incur a straight advantage in price even when they consider
buying a blade server instead of five stand-alone servers.

Affordability has various dimensions and industry experts believe that the
key to success in the server market lies in understanding user demands and
providing technologies that are affordable, when they require it. One has to see
examples of various seasonal demand patterns of computing resources: Companies
whose requirements peak in patches-only during specific periods. During
Wimbledon, the hits on the site peaks to four million per day, while normally it
is not more than a few hundred. A company's HR department needs peak power
last three days in a month due to payroll work and the capacity remains
unutilized during normal times. These are cases where capacity utilization on
demand offering proves an economically viable solution for customers. Customers
can build spare processors within their servers and pay for using them only when
it is required.

Sun Microsystems recently announced a new family of enterprise-class x86
64-bit multi-core servers, which are powered standards by AMD Opteron
processors. The servers are claimed to have the highest-performance x64
processors on the market, and running the Solaris 10 Operating System. The new
industry-standard servers consume about one-third the power, are one-and-a-half
times the performance, and cost half as much as comparably configured four-way
servers from other vendors.

Says Unnikrishnan, "The new industry-standard x64 multi-core available
server family begins with the Sun Fire X2100, the lowest cost single-socket x64
rack-mount server, starting at Rs 43,975 and includes the two-socket, 4-way Sun
Fire X4100 and Sun Fire X4200 servers. Future servers in this same family are
being designed to accommodate up to eight multi-core processors to achieve
16-way mid-range system performance levels, offering customers the ability to
standardize x64 servers across their entire IT infrastructure."

Consolidation is the key

Riding closely with the affordability factor is the concept that is gaining
strength by the day-server consolidation. The need to optimize usage of IT
resources within the enterprise is prompting large enterprises to consider
server and application consolidation solutions. Several large IT spenders in the
country, primarily banks, telcos and manufacturing organizations are moving up
the IT maturity curve very rapidly from the perspective of both IT
infrastructure deployment as well as the provisioning of value added services.
Quips Unnikrishnan: "With networks increasing in complexity, managing the
pace of growth and the spiraling costs is becoming a major pre-occupation for
most CIOs.

Further, added pressure on the incumbents to deliver better returns on
investments made is prompting a shift to a consolidated server and application
environment. This trend will definitely continue over this year, with other
segments also voicing similar needs."

Yet another area where the effect of consolidation will be felt more is on
the data centers. The data centers in India, over the last few years, have
installed multiple servers and storage devices. Says Ohrie, "Data is
sitting in these servers, without being leveraged and most of capacity of these
servers are under utilized. When you implement virtualization you do it in two
ways. One, you put a software layer over the existing hardware infrastructure
and integrate it in a manner that it allows you to leverage pending capacity
lying in various parts of your infrastructure into areas where it is critically
required-thus bringing in huge savings to building additional hardware
capacity and real estate".

As we look at the current server dynamics, all vendors are going out with the
latest technologies, and in the ongoing year the SMBs are touted as one hot area
that will aggressively go for x86 offerings with the escalation of the
affordability factor. Meanwhile, large enterprises will embrace a combination of
latest server technologies and usher in more reliability for their mission
critical applications. In all, in the past two quarters, all vendors have
demonstrated good traction for their offerings and are indeed bullish about the
road ahead.

(Shrikanth G in
Chennai)

Over the last two quarters, the server market has seen growth in primarily three areas:

Blade Servers

This is the fastest growing segment in the server space. Many organizations
are greatly appreciating its benefits, leading to growing adoption rate for
blades in the market space.

Unix Business

The UNIX market continues to be a favorite with companies wishing to run
mission critical and core applications. The key investments are seen in the
Telecom and BFS space. It is RISC computing that is ruling in this space.

Volume Business

With all vendors coming in with offerings of less than Rs 50,000, this
market is posed for explosive growth. The SMB customers are the prime targets
for most server vendors in this space. The market is fast penetrating into Class
B towns now.