Blade Servers Are Hip, But Do They Meet Customer NeedsBlade Servers Are Hip, But Do They Meet Customer Needs

For what is now in many ways a niche technology segment, blades servers are getting a lot attention, effort, and investment from the major server vendors. Hewlett-Packard on Wednesday announced a complete revamp of its blade server architecture, IBM recently revealed that a venture capital firm will invest $100 million in third-party companies developing products around its blades, and Sun Microsystems will soon reenter the market with a new product based around its Galaxy server.According to Gartner the blades server market totaled $620 million in revenue in the first quarter of 2006, and IDC has the total at only $591 million, or about 5% of the total server market. Although the blade server market is growing quickly, with Gartner estimating first quarter revenue increasing 43% year over year, and shipments increasing by nearly 30%, blades are not expected to dominate the server market in the foreseeable future. Gartner estimates that blades will account for as much as 20% of the total server market by 2010.

"Blades aren't the be all to end all," says Jane Wright, an analyst with Gartner. "Right now, and into the future, we don't see blades as that good a fit for many small and medium sized businesses, and that wipes out a whole segment of the market."

Right now the blade server market is a two-horse race, with IBM at 42% share, and HP at 31% share, controlling nearly three-fourths of the total market. Dell currently has about 9%, and Sun only 2%, according to Gartner.

On Monday, information will look closer at the current status of blade server market.