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.”

Server Market Dynamics 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.

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