Market Watch

Micro Servers to Deliver Impressive 200 Percent Growth in 2013


Emphasizing expandability, energy efficiency and low cost, the machines are ideal for cloud computing and data centers

Micro servers suitable for cloud computing and data centers will be the fastest-growing segment of an otherwise staid server market, expanding more than threefold this year after an initial low starting base, according to an IHS iSuppli Compute Platforms topical report from information and analytics provider IHS.

Shipments this year of micro servers are forecast to reach 291,000 units, up a mighty 230 percent from 88,000 units in 2012. Micro server shipments started at just 19,000 in 2011, but projected units by the end of 2016 will amount to some 1.2 million units. The penetration of micro servers, compared to total server shipments, was at a negligible 0.2 percent in 2011. But by 2016, the machines will claim a penetration rate of more than 10 percent—a stunning fiftyfold jump.

Micro servers are general-purpose computers, housing single or multiple low-power microprocessors usually less than 45 watts in a single motherboard. The machines partake of shared infrastructure such as power, cooling and cabling with other similar devices, and an extremely dense configuration can be obtained when micro servers are cascaded together.

Micro servers fit well in the current environment characterized by increasing burdens made by mobile computing. With cloud computing and data centers in great demand in order to serve more smartphones, tablets and mobile PCs online, specific aspects of server design are becoming more important, including maintenance, expandability, energy efficiency and low cost. Such factors are among the advantages delivered by micro servers compared to higher-end machines like mainframes, supercomputers and enterprise servers—all of which emphasize performance and reliability instead. 

Micro servers are not the only type of server that will experience rapid expansion in 2013 and the years to come. Other high-growth segments of the server market are cloud servers, blade servers and virtualization servers.

The distinction of fastest-growing server segment, however, belongs solely to micro servers. The compound annual growth rate for micro servers from 2011 to 2016 stands at a remarkable 130 percent—higher than that of the entire server market by a factor of 26, a significant number by any calculation. Shipments will rise by double- and even triple-digit percentages for each year during the period.

Key players stand to benefit

Given the dazzling outlook for micro servers, makers with strong product portfolios of the machines will be well-positioned during the next five years—as will their component suppliers and contract manufacturers.

A slew of hardware providers are in line to reap benefits, including microprocessor vendors like Intel, ARM and AMD; server original equipment manufacturers such as Dell and Hewlett-Packard; and server original development manufacturers including Taiwanese firms Quanta Computer and Wistron.

Among software providers, the list of potential beneficiaries from the micro server boom extends to Microsoft, Red Hat, Citrix and Oracle. For the group of application or service providers that offer micro servers to the public, entities like Amazon, eBay, Google and Yahoo are foremost.

The most aggressive play for the micro server space is being waged by Intel and ARM.

Intel first unveiled the micro server concept and reference design in 2009, ostensibly to block rival ARM from entering the field in the first place.

ARM, the leader for many years in the mobile world with smartphone and tablet chips because of the low-power design of its central processing units, has been just as eager to enter the server arena—dominated by x86 chip architecture from the likes of Intel and a third chip player, AMD. ARM faces an uphill battle, IHS iSuppli believes, as the majority of server software is written for x86 architecture. Shifting from x86 to ARM will also be difficult for legacy products.

ARM, however, is gaining greater support from software and OS vendors, which could potentially put pressure on Intel in the coming years.

Read More >> Micro Servers: When Small is the Next Big Thing