Will Virtualization Doom Server Sales?

From the article:

The promise behind virtualization has long been that one well-equipped server could do the work of several. So what happens once customers begin following that idea — and buying fewer servers?

That scenario is cause for concern, according to industry analyst Infiniti Research. This week, the firm published a study indicating that server sales will trail off in coming years, and even decline, as virtualization reduces the need for physical hardware.

The company’s TechNavio online research unit released the findings to coincide with the upcoming Storage Expo conference in London next week.

The study suggests that sales will slow to two percent in 2008 — representing a marked decline from the 5.9 percent annual growth rates that fellow market researcher IDC saw in 2006, and the 8.9 percent from a recent Gartner study.

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