Server spending set to slow

Augurer’s working for analyst outfit TheInfoPro has been looking at the liver of a freshly killed ram and comes to the conclusion that spending on servers will slow this year.

Staff for TheInfoPro base their predictions on ringing people up and asking if they are planning to buy a server, on the lines of “are they happy with their wash and would they buy two cheaper rival detergents instead of the one they are using now.”

On this dual prediction basis, TheInfoPro thinks that businesses still have tight IT infrastructure budgets.

It says that there is a trend toward virtualisation which is helping Dell while leaving Oracle the most vulnerable, TheInfoPro says.

It predicted that server vendors will continue to see a harsh business climate as enterprises adapt to the new fiscal realities. The winners will be Dell and Cisco Systems but Oracle could see its hardware plans battered, and served up with a light sprinkling of salt and vinegar.

Bob Gill, managing director of server research and TheInfoPro’s lead Augurer told eWeek that it will be a tough year.

A large percentage of people surveyed said they’ll spend less in 2010 than they did in 2007. The bottom line is, if they don’t have money, they don’t have money. Well we would be surprised to learn if people don’t have money they really did have money, or if they had cash they really didn’t. But then you don’t make a fortune in the prediction business by saying things that people did not already know.

However, Gill’s predictions are running a little counter to the trained augerers in other analyst firms.

Intel CEO Paul Otellini, who can afford some of the best Tarot Card readers seen at a Psychic Fayre claimed recently that the record financial results were due in large part to an increase in corporate IT spending, including on servers, and he expected that trend to continue as the year rolls on.

Gill said the results from TheInfoPro’s survey of 252 decision makers at Fortune 1000 companies said something completely different.

Most of them want to reduce the number of servers they have, not buy new ones. Thirty-nine percent of those surveyed said they planned to spend less on servers in 2010 than they did last year. Comparatively, 25 percent said they will spend more.

If he is right then the slowing spending on servers will mean doom for Oracle, which is seeing a rapid drop in spending on Sun Microsystems hardware, and that will only continue,.

More than 21 percent of Oracle/Sun customers are planning to leave Oracle for a competitor, while another 26 percent are considering it.