System builders that specialize in custom server configurations report year-over-year growth for their wares, citing demand related to virtualization and high-performance computing (HPC).
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That growth mirrors that of the overall server hardware market. Research firm Gartner Inc. recently reported that worldwide server shipments grew 27.1% in the second quarter of 2010, while revenue increased 14.3%. The main engine of that growth was x86-based server shipments, which expanded 28.9% for the quarter in units sold and 37% in revenue.
Todd Garrigues, the North America channel marketing manager for Intel, said the server segment continues to be a strong piece of the overall system builder market. For the first half of 2010, the channel's contribution grew by 20% year-over-year in terms of unit sales.
"Looking at the mix of product that the channel is selling through, the [average selling prices] are up significantly, indicating that the channel is having success selling the latest technologies and feature-rich products to their customers," Garrigues said.
Custom server sales a bright spot for system builders
Chuck Orcutt, product line manager for the Nexlink custom-built system line from Seneca Data Inc., an Intel premier system builder partner in Syracuse, N.Y., said unit sales and average selling prices (ASPs) for the server portion of Seneca's business have been driven higher by activity in virtualization.
One of Seneca's most popular current server models is based on the Intel modular server design. Capable of supporting up to six server compute modules, the design includes a built-in SAN, which Orcutt said makes it an ideal platform for virtualization.
"Infrastructure optimization is the first thing [users] are attracted to," Orcutt said.
Virtualization has leveled the playing field for custom system designs from system builders (also known as white box builders) because they offer more flexible configurations than some of the top-tier brand vendors, he added.
"Customers are more willing to consider a custom server solution because of the consultative selling process involved with virtualization," Orcutt said. Among the verticals that Seneca VARs champion more often are healthcare, retail and point of sales, he added.
Todd Swank, vice president of system builder Nor-Tech in Burnsville, Minn., said HPC solutions helped make 2010 a growth year for his company's server line despite an overall flattening of the white-box business over the past few years. Key verticals for custom-built servers include higher education, government agencies, and oil and gas exploration companies, he said.
When it comes to HPC solutions, Swank said energy conservation is "very big," a factor that Nor-Tech has accommodated by sticking closely to the requirements of the U.S. Environmental Protection Agency's Energy Star program.
"Power conservation needs to be on the checklist for anyone selling custom servers," he said.
A key selling point for Nor-Tech's hardware has been the flexibility that customers can get when it comes to configurations. "People still get frustrated dealing with the big guys," Swank said.
Jean Shih, president of Amax Information Technologies in Fremont, Calif., attributes her company's server-related growth this year to two primary form factors: server appliances that Amax configures on behalf of major ISVs, notably security software developers and cluster platforms for supporting virtualization solutions.
An example of the latter is the new ClusterMax HPC series, a supercomputer configuration that is VMware-certified and comes with the company's ClusterMax Eco power supplies, which Amax said offer higher performance-per-watt, per-dollar and per-square-foot than competitive products. "You really reduce the cost of a running a data center when you look at platforms like this," Shih said.
The chief differentiators that help Amax win deals are flexibility and its more than three decades of experience in PC and technology infrastructure design, she said. "That's where our value exceeds that of the brand names."