Is Virtualization Finally Harming Server Sales?

When Avnet released disappointing earnings today, the distributor blamed weak server sales in the US and Europe. But don’t blame Avnet, and don’t blame the economy. Instead, The VAR Guy thinks virtualization is to blame. Here’s why.

Each time The VAR Guy speaks with a CIO or solutions provider, he hears about yet another server consolidation project. Through virtualization and more effective storage management, companies can simplify their data centers while raising server utilization rates.

In a typical project, solutions providers like BlueWater Communications Group have consolidated customer data centers from 250 servers down to 70 servers. Those remaining servers are far better optimized and virtualized, and typically run a range of applications across Linux and Windows.

Another potential reason for the server spending slowdown: Microsoft just shipped Windows Server 2008. Many companies are now at an inflection point, as they evaluate Microsoft’s latest server wares but also continue to swim deeper into the Linux waters.

Either way, The VAR Guy doesn’t think the economy is destroying server sales. Rather, businesses are becoming far more efficient at leveraging the servers they already have.