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Virtualization leads IDC to cut server forecast

Virtualization, multicore processors mean customers are buying fewer systems than the market research firm had expected earlier.

IDC on Tuesday lopped 4.5 million units off its forecast for the number of x86 servers to ship in the second half of the decade after concluding that virtualization and multicore processors are cutting into purchases.

That 4.5 million number is a major change--about 10 percent of the servers the market analysis firm had expected would be sold from 2006 to 2010. In addition, the firm trimmed its spending forecast by $2.4 billion.

"Overall, x86 (server) shipments that were once projected to increase 61 percent by 2010 are now facing just 39 percent growth during that same period," IDC said.

The reason for the change is that customers are buying fewer, more powerful systems, IDC argued. Virtualization lets a single system run multiple operating systems simultaneously; multicore processors amplify the consolidation trend by enabling individual servers to handle more work.

EMC subsidiary VMware leads the market for x86 server virtualization, which lets a single physical machine house multiple operating systems in compartments called virtual machines. Xen, an open-source competitor commercialized by XenSource and others, is now built into the prevailing versions of Linux, Red Hat Enterprise Linux and Novell's Suse Linux Enterprise Server. And Microsoft plans to release its own comparable technology, code-named Viridian, in 2008.

IDC forecast that the number of servers used to run virtual machines will increase significantly from 2005 to 2010. In 2010, 1.7 million physical servers will be shipped to run virtual machines--14.6 percent of the total shipments compared with 4.5 percent in 2005