Enterprise server refresh same despite new tech

Pace of enterprise server replacement remains the same despite new technology and faster product cycle from vendors, say market observers.

New technological improvements to server products or faster product push by vendors do not affect the pace of server replacement of Asia-Pacific companies, according to market players.

Today, Intel launched the Xeon E5-2600 processor family which the company said is 80 percent faster and 50 percent more efficient than previous generations. In a briefing with ZDNet Asia, Collin Tan, country manager for Singapore at Intel, attributed the efficiency improvements to the integration of the I/O controller directly onto the processor.

Despite the new improvements, Jennifer Wu, research vice president for data center systems at Gartner, said she did not foresee any significant pick up in the pace of server replacement among Asia-Pacific companies.

Instead, these companies will keep to their regular replacement cycle, she said. "The improvements of the CPUs have already become a necessary activity for CPU vendors after a period of time. These improvements are no surprises for enterprises, what matters is how big and the extent of the improvements they receive," she said.

That said, Wu noted that improvements in Intel's new chip might speed up the adoption of virtualization, because of its better capabilities which makes virtualizing even more cost-efficient.

Asked if companies will choose their servers based on processors, Wu said large enterprises will have the knowledge to make sound decisions as to whether they will adopt the new CPU. For small and midsize businesses, server vendor's recommendations are important, she added.

Shorter server product push
Intel's new announcement comes less than a year after the Xeon E7 was revealed in April 2011. Intel's Tan agreed that new server announcements were getting shorter. "It used to be 18 months but now it's kind of reduced to 12 months," he said.

For Tan, the pace of new product releases was appropriate as some companies needed new technology much faster than others. While some firms may keep to their regular three-year replacement cycle due to budget constraints, others will need the "latest and greatest products" to help their business, he said, giving an example of high-frequency trading industry where "every split second of transaction can help them make or lose money".

One server vendor believes that business needs will be the key deciding factor behind server refresh cycles, even if new products are coming out faster. Ho Chye Soon, general manager at Dell Singapore, noted that server replacement cycles are unlike short PC replacement cycles as servers are required to cater to a larger user base.

Ho was speaking at a media briefing announcing the launch of its 12th generation server portfolio which features the use of the Xeon E5-2600 processors.

"It depends on your business needs. If you need something to run your business today, then you need it today," he said. "But if you can delay [the refresh] depending on your priorities, maybe you can do that."

He recommended that for companies wishing to jump on the latest server technology, they can consider extending their warranty if the period before the launch of a new product is short.

However Ho noted that in order not to miss out on market opportunities, if an equipment upgrade was needed to drive new revenue, it may be more practical to do so with current market models instead of holding out.

Commenting on trends in Asia-Pacific, Ho noted that large enterprises in mature markets of the region have adopted virtualization at least two years ago. Now, these companies are looking at how cloud can help them deliver information and data to their increasingly mobile employees anytime, anywhere, he added.

Small and midsize businesses are "following the leaders" and are now more interested in virtualization, he noted. He sees a similar trend in the region's emerging markets but adoption is happening at a slower pace, said Ho.


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