The highly specialized needs of several business segments are driving sales for custom systems builders focused on server configurations. Some of the richest opportunities lie in purpose-built infrastructure for small businesses and high-performance computing, said experts focused on systems builders.
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“Analysts thought this market would slow down. The reality is that it is continuing to grow because of hyper-segmentation,” said David Brown, general manager of channel server marketing for Intel Corp.
Server market share figures from the end of 2010 bear this out. Early this year, IDC reported that in 2010, server builders outside the first-tier of vendors accounted for approximately 10.3% of the overall market shipments. What’s more, sales of x86 configurations grew by 16.6% on a unit basis.
“Within the x86 market, high-end servers showed higher growth rates for both server shipments and revenue than low-end servers,” said Reuben Miller, IDC senior analyst for enterprise servers. “With the introduction of higher performing processors with multiple cores, customers are finding more benefit in purchasing multi-socket server units than single socket units.”
Some of these sophisticated builds are bleeding over into the mainstream, according to custom-systems builders. And, it’s not necessarily tier-one vendors that provide them. Many small businesses, for example, are more willing to consider a server that is more than just a “desktop on the side” that was purpose-built for their needs in terms of security and widely used server applications focused on small business operations and productivity.
Custom servers boast tight integration, optimization
Chuck Orcutt, manager of the Nexlink product line with Seneca Data Distributors Inc., a custom-systems builder in Syracuse, N.Y., said these servers -- many of them built on Intel’s modular server design -- feature systems management, networking, energy efficiency and virtualization considerations that are appropriate for small businesses with as few as five employees.
What makes custom configurations especially attractive is the tight integration and optimization they can offer for small-business software such as Microsoft Hyper-V, VMware vSphere Essentials or Essentials Plus, and Microsoft Windows Small Business Server (SBS) 2011 Essentials, Orcutt said.
“You’re starting to get more aggressive price points and higher-end features in these configurations,” he said.
Beyond SMBs, there is also activity at the high end of the market, according to custom-systems builders.
Orcutt cites several areas that are trending well for Seneca Data, including digital video surveillance. Infrastructure configured for these solutions must be optimized in both performance and storage management. What’s more, each configuration must be certified to work with the breadth of applications focused on this sector. “When you start adding the cameras and the software, there is a tremendous amount of complexity. There is no one specific build,” Orcutt said.
Specialized servers boost high-performance computing
The other big custom server market for Seneca Data, and Appro, an even more specialized custom-system builder, is high-performance computing or HPC.
“The growth in high-performance computing has primarily been due to the fact that commodity parts have become powerful enough and widely available to allow us to build supercomputer-capable machines,” said John Lee, vice president of advanced technology solutions group for Appro.
Appro has found traction with companies pressing HPC into service for their work on drug research, genomics, oil and gas exploration, and government agencies, Lee said.
High-profile customers include the National Nuclear Security Administration, Lawrence Livermore National Laboratory and Los Alamos National Laboratory. These Appro clients need systems powerful enough to support simulations, advanced calculations and specialized software applications. Appro has benefited especially in situations where local support was required and larger vendors were unable to oblige, Lee said.
In response to ongoing market segmentation in custom servers, Intel created a series of guides through the Intel Enabled Solutions Acceleration Alliance (ESAA) that provide systems builders with integrated configuration guidance for certain configurations. Currently, the alliance offers solution references for 15 different areas including application servers, cloud computing, digital signage/surveillance, high-performance computing, SMB solutions and virtualization.
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About the expert
Heather Clancy is an award-winning business journalist in the New York area with more than 20 years experience. Her articles have appeared in Entrepreneur, Fortune Small Business, the International Herald Tribune and The New York Times. Clancy was previously editor at Computer Reseller News, a B2B trade publication covering news and trends about the high-tech channel.