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Commentary: Server appliance market will remain on fire

With some $14 billion in revenue up for grabs by 2004, according to Gartner forecasts, the market for server appliances will continue to be red hot.

By Pushan Rinnen, Gartner Analyst

With some $14 billion in revenue up for grabs by 2004, according to Gartner forecasts, the market for server appliances will continue to be red hot.

This fact explains the seemingly daily server product announcements stoked by manufacturers anxious to provide systems for the booming Internet and application services markets.

Yet will these new devices displace the bulk of the general-purpose server sales? And will the new players successfully challenge the five server giants--Compaq Computer, IBM, Hewlett-Packard, Dell Computer and Sun Microsystems?

Gartner believes

See news story:
Dell, others target special-purpose Net servers
that the impact of server appliances will be significant, albeit it confined to entry-level, Intel-based servers. The most popular server appliances today are 1U- or 2U-high Web servers and caching appliances. Their popularity is fueled by the strong demand from Internet service providers (ISPs) and application service providers (ASPs).

Net service providers have migrated toward server appliances, as the hardware combines application software and hardware and is easy to install and maintain--unlike general-purpose servers.

However, server appliances aren't expected to be a threat to midrange and high-end application servers and database servers. Server appliances increasingly will act as front-end server, especially for tasks such as load balancing, caching and Web serving. Midrange application servers and back-end database servers will likely continue to require the cutting-edge CPU power and functionality that typically reside in general-purpose servers.

Network-attached storage (NAS) products--especially rack-mount, highly scalable products with data management software embedded--will increasingly affect the sales of direct attached storage (known as RAID arrays), as well as general-purpose file servers. NAS products, such as low-end Maxtor MaxAttach and high-end Network Appliance products, have started to consolidate traditional RAID arrays at ISP sites. They also offer application and database servers a more efficient storage pool.

(For related commentary on installation of network appliances, see TechRepublic.com - free registration required.)

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.