High and Low Ends Take Aim at Midrange Server Market

Article ID: 54294
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For the time being, a lack of growth seems to have halted sales in the midrange server market. But on either end of the server spectrum, there seems to be a "race to the middle" by both low- and high-end server platforms to encroach on the midrange's traditional business lane.

"At the low end, robust x86 technologies are delivering better performances than ever, and the addition of clustering and grid solutions are allowing x86 servers to play in areas once reserved for higher-end platforms," says Charles King, the principal analyst with Pund-IT, Inc. "At the other end, vendors have been tailoring enterprise-class solutions for the mid-market — IBM's System z9 BC (Business Class) is a prime example of this."

As a direct result of this "race," there is more competition than ever before among server vendors for the finite number of businesses requiring midrange solutions.

That said, do not expect midrange servers to disappear any time soon. In particular, the System i server remains popular among its traditional business users. Recognized for its reliability and ease of use, the System i server remains in use despite the lack of growth in the marketplace. "IBM's System i platform plays well in the midrange space," King says. "In fact, you can say that it helped invent or inspire the midrange market."

Still, System i faces a difficult future. Although the platform probably will not go away, it is less likely to be the future choice of midrange IT shops, says Chris Foster, an analyst with Technology Business Research.

Can anything be done, then, to increase the marketability of midrange servers to an audience bombarded with more choices?

The increased competition is at least helping a little. At present, enhanced performance and decreasing prices are driving major innovations in the midrange market. For instance, companies are creating enterprise-level solutions that are easier to manage at a price point that mid-sized businesses can more readily afford.

On the software side, vendors continue to encourage the development of new products and other offerings for midrange customers. A variety of available applications is often a draw for customers evaluating hardware solutions.

"Nurturing a robust ISV (independent software vendor) channel and making more applications and solutions available for the traditional midrange platforms is an obvious and broadly adopted strategy," says Darin Stahl, the lead research analyst with Info-Tech Research Group.

Internationally, midrange vendors should consider seeking new global markets in a more aggressive manner. For instance, midrange servers could suit all of the needs of many businesses in developing countries.

"Big iron — whether mainframes or some other type of large server — is relative. Midrange servers may be high end by the standards of developing countries," says Gordon Haff, the principal IT advisor with Illuminata, Inc.

These intelligent tactics should undoubtedly work to increase the marketability of midrange servers.

More important though, if vendors wish to truly grow midrange market share, they should sell the beneficial features of midrange servers in a much more aggressive manner.

"Builders of traditional midrange servers have to do a better job describing the fit, benefits, and price of executing server consolidation initiatives on midrange platforms in order to gain mindshare with IT leaders who otherwise would not be inclined toward the platform", Stahl says.

This situation is especially the case with respect to server consolidation. According to research conducted by the Info-Tech Research Group, enterprises are just 10 percent more likely to adopt midrange servers over blade servers for server consolidation hardware.

"Virtualization in particular can make 4-way or 8-way servers attractive as a way of consolidating workloads on a smaller scale," Haff says.

Traditional midrange server vendors should additionally continue to provide solutions for their current customers. The System i, for instance, adheres to this plan, and IBM does make a nice profit on upgrades and memory and drive expansion, according to Foster.

Still, midrange servers like the System i have a challenging race ahead of them with server vendors from both the low and high ends encroaching on their space. The System i may remain the server of choice for its traditional business customers, but the importance of marketing and growing the midrange server customer base is extremely vital to its long-term success.

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