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Kicking goals in the $billion server game

Kicking goals in the $billion server game

Despite the global credit crunch, spending in the Australian server market surpassed the $US1 billion mark during 2007 for the first time in local history. What were the trends driving this growth and will they continue in 2008/2009?

And the battle is hotly contested. IDC figures for the overall server market showed that while IBM maintained its number one position in terms of revenue share for 2007, Sun was the only company to grow its share with an 11.5 per cent increase. Yet, HP was the market leader for units shipped followed by Dell. Acer came in as the fifth ranked vendor for year-on-year revenue growth.

Like Fujitsu's Badell, HP's Rayner-Harvey believes this battle will increasingly find its way into the SMB space.

"In this digital era there are lots of new demands and servers are becoming more widely adopted by small organisations," Rayner-Harvey said. "I think blades have typically been concentrated on the commercial and enterprise class customers. But now a lot of smaller customers have an opportunity to get the same benefits from blades."

The final trend, a late-comer to the servers' game but one that is running strong is green IT. While many armchair experts rightly point out loyalty to the green IT jumper can be fickle at best, others indicate server players will be forced to take that long hard look in the mirror and have an honest go with green IT if they are to stay in favour with the crowd.

"What we are seeing is that here a lot of vendors are starting to sell the green message," Badell said.

"In Europe consumers are starting to buy green. Not buying the green message but actually buying on green aspects, a feature they are looking for. I'd say that has not happened in Australia yet."

However, as reporting obligations under corporate social responsibility and carbon emission rules kick in vendors and the channel alike should hit the field with more substantial green IT attributes.

"What we are expecting to see is customers looking to the partner and vendor to articulate the green costs of their purchase," Badell said.

The coach's spiel

In the seasons ahead of the Australian servers' market the channel must get up to speed on these trends to maintain a strong offence or risk being overrun by competitors trying to move in on the growth in the market.

Yet, like almost all facets of the IT game building a business case around servers does not mean simply shipping boxes.

"The channel now gets to add value by being solution providers, they are no longer box pushers," Sun's Tan said.

"They should start moving into more solution-oriented sales. Customers are going to resonate now a lot better with someone who actually comes to solve a problem rather than try to push a box."

In addition to developing a long-term strategy to improve ROI, the solutions-oriented approach is a message vendors are keen to remind their channels about.

"I think building a business case is more than just selling hardware," Badell said.

"I think it is working your way right back to the business. Everyone should remember that a server is essentially there to drive an application. An application is there to drive an information service of some description.

"And that information service is there to meet a business need. It is important partners work their way up that stack to understand the business need. That will put them in a better position."

As the current season approaches half-time it is well worth the channel taking stock of the way the game is playing out through these trends and digging deep to leverage the opportunities and run out the season in form.


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