Cloud Servers Poised to Overtake Enterprise Servers

The cloud is set to be the sole driver for growth in server shipments, according to new research from Dell’Oro Group. The firm found that cloud data centers will be the sole growth driver for server shipments beginning this year.

Unit shipments to enterprise data centers are set to decline, but that won’t stop the overall number of server unit shipments from growing, exclusively due to cloud computing. Dell’Oro found that the overall migration to cloud computing has had a massive impact on servers down to their very form factor, which challenges even the most basic definition of what a server is.

"Our recent interviews with end users, component vendors and system integrators, indicate that Cloud adoption is occurring faster than industry expectations," said Sameh Boujelbene, director at Dell'Oro Group. "The substantial increase in cloud uptake stems from both a declining skepticism of the cloud among enterprise accounts, and the willingness of cloud vendors to hear their customers' concerns, mainly related to security and resiliency, and to provide platforms to meet their needs.”

Dell’Oro anticipates cloud servers will comprise 50 percent of total server shipments by 2017, a statistic that was previously forecast for 2018. The findings echo upcoming research from MarketandMarkets showing cloud servers are poised to become very disruptive to the server market as a whole.

“The increasing business demand for maximum flexibility of resources and the rapid pace of change in computing demand will make cloud-based servers, the dominant model in the future,” states an excerpt from the upcoming report.

“Organizations can use the cloud server market either as production servers for a web server, mail server, application server, proxy server and database server; or as a development and testing server by application development and project management teams before entering the production stage; or as a disaster recovery center to recover the business data in case of major system failure.”

Dell’Oro’s analysis also breaks down a variety of Ethernet connectivity options based on server form factor for both cloud and enterprise or on-premises deployments. The research finds that at least eight different network speeds are expected to co-exist for server access during the next five years, as the server and data center markets continue to migrate to the cloud model.