Blade Server Boom Expected To Continue

2004 was a very good year for server blades. Sales showed sequential growth throughout the year as more businesses deployed the technology. That has vendors and analysts preparing to attend the second Server Blade Summit in Santa Clara, Calif., next week predicting even greater growth.

Jeffrey Hewitt, an analyst with Gartner, says virtually all major server vendors are increasing efforts to capture greater share in the blade-server market, a market that highlights major changes in the way servers are used and deployed. "This market represents a disruption cycle, and whenever you've got a cycle like this you've got an opportunity for a vendor to capitalize on it and capture market share," Hewitt says. "These vendors see this is an important area for the future, and there is still a lot of market share up for grabs."

Although total blade-server unit shipments in 2004 were slightly below the projections made when entering the year, total revenue from the market met or exceeded expectations. "Shipments in the first half of 2004 were certainly weaker than had been expected," says Jessica Yang, an analyst with IDC. "But volume started picking up in the third quarter and momentum was building."

According to Gartner, blade-server shipments grew from about 60,000 in the first quarter to 62,000 in the second quarter, 68,000 in the third quarter, and 107,000 in the fourth quarter, for a total of more than 298,000 shipments for the year.

IDC saw the market as slightly bigger, saying that 306,000 blade servers shipped in 2004. IDC projects blade-server shipments of 510,000 this year, growing to 2.8 million in 2009. Revenue from blade servers was $1.2 billion last year and is expected to grow to $2 billion this year and nearly $9 billion in 2009, IDC says.