The numbers don't lie -- cloud computing boosts server sales

The interest in private clouds and the growth of cloud providers are increasing demand for hardware

We've been reporting on server growth around cloud computing for a while. And now, according to IDC, worldwide server market revenues increased 11 percent in the second quarter. Clearly, this is not an aberration, but a counterintuitive trend.

These figures are driven partially by the worldwide economic recovery, but also by corporate interest in cloud computing, especially private clouds. It appears that cloud computing's initial promise of fewer data centers and servers is having the opposite effect on hardware purchases.

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The reasons behind this are obvious. As made clear at VMWorld, many enterprises are looking into their options with private clouds, but instead of converting existing hardware to cloud approaches and technologies, they're making new purchases. Moreover, hardware vendors such as IBM and HP are offering "cloud bundles" or a prebuilt "cloud in a box," which are just server and software packages. These deals are especially tempting for enterprises that want to get their private clouds up and running quickly.

Cloud computing providers are also driving hardware growth. As their businesses expand, these providers are building out their infrastructure, and they need new servers to do so.

Ironically, cloud computing promised to reduce the number of servers we managed, through better sharing of existing hardware and by placing much of our compute and storage processing on public clouds. But then came the interest in private clouds, which seems to be running in parallel with the movement to public clouds, as well as the available budgets to buy new hardware. Until now, enterprises and government agencies were resisting the call to allocate money for new servers.

As a consequence, we're seeing decreased ROI from cloud computing. The cloud is supposed to help us become more effective and efficient with our hardware and software assets, but we're heading for strange times with the new emphasis on private clouds and, in effect, our individual data centers. Where we should be zigging, we're actually zagging.

This article, "The numbers don't lie -- cloud computing boosts server sales," originally appeared at Read more of David Linthicum's Cloud Computing blog and follow the latest developments in cloud computing at

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