Volume 15, Number 4 -- January 23, 2006

Bang for the Buck Drives Server Acquisitions in the U.S., Says IDC

Published: January 23, 2006

by Timothy Prickett Morgan

This one will knock you over with a feather. The analysts at IDC have released a report that says that "better value for money" is the main factor in choosing a server platform and a server vendor, almost regardless of industry vertical. IDC said "almost." The exception to this rule is the public sector, where relationships and long contracts seem to matter more.

IDC has just completed a survey of server buyers in the United States, and companies in the manufacturing, services, and healthcare sectors all agreed that better value for money--with value being more than just performance bang, of course--was the key factor that companies used to determine who their server vendor would be. Financial services and distribution business--which run in real-time--were even more precise in their assessment that systems performance was more important than a general sense of better value for the dollar.

The survey tried to gauge the perception in the various industry verticals of the top four server makers: IBM, Hewlett-Packard, Sun Microsystems, and Dell. "While both IBM and Dell received high customer satisfaction ratings from respondents overall," explained Dan Corsetti, IDC's senior analyst for its vertical market research team, "it is interesting to note that HP and Sun scored particularly high in several specific vertical markets." To be precise, companies in manufacturing, distribution services, and healthcare services held HP in high esteem, while those in financial services, infrastructure services, and the public sector expressed higher than average approval of Sun. In the public sector, where contracts often last for many years it is very difficult to replace a vendor--how many times has the Internal Revenue Service and the Social Security Administration promised a more modern IT infrastructure and failed?--and that is why historical relationships with the vendors are more important, says IDC. Such relationships also weigh heavily at educational institutions, too, apparently.

Bang for the buck is not the be-all, end-all, however. Respondents who picked Dell and HP cited better value for money as the main reason these vendors were their primary vendor, but those who have Sun as their main vendor cited system availability, system performance, and better system functionality as their main reasons. Given how IBM's Power-based servers have outperformed Sun's Sparc-based machines for some time, and Sun is just now getting within shooting range with its dual-core UltraSparc-IV+ and Opteron machines, this is somewhat surprise. But performance depends on the applications, and Sun's boxes do well on Java and similar heavily threaded workloads.

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Shannon O'Donnell,
Mary Lou Roberts, Victor Rozek, Kevin Vandever, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
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