Windows Server 2012 upgrades may impact x86 server market

Server sales have been down in recent months but the new Windows Server launch may restart x86 server hardware purchases -- as soon as IT gets done testing it.

Windows shops are about to get some much awaited features with the release of Windows Server 2012, and they may...

buy new server hardware as part of their operating system upgrades.  

That’s good news for the x86 server market. Server shipments fell 3.6% year-over-year during the second quarter to two million units, the first annual decline since the third quarter of 2009, according to IDC, an IT research firm based in Framingham, Mass.

"There tends to be a slowdown in purchasing before a new version of Windows Server [is released]," said Rob Enderle, principal analyst at researcher Enderle Group in San Jose, Calif. "But the end result will be an uptick for new hardware."

It won't happen quickly, however largely because of the drawn out testing process that precedes certification of new systems by IT departments.

Some companies will get Windows Server 2012 soon after the Sept. 4 launch so that they can “get in and get under the hood" for testing and evaluation purposes, said Dennis Martin, president of the Rocky Mountain Windows Technology User Group in Denver.

As in the past, that testing will probably take anywhere from six months to a year.

IDC predicts server sales will improve during the second half of 2012, though some server manufacturers acknowledge there will likely be a lag between delivery of servers with the new operating system and user adoption -- the typical server upgrade cycle kicks off after Microsoft ships the first service pack.

Once adoption gets rolling, though, Martin expects strong demand for Windows Server 2012-based machines built on Intel Corp.'s recently released Xeon E5-2600 platform (previously codenamed Romley).

"The combination of Romley with Windows Server 2012 will set off an upgrade cycle next year, especially among customers with calendar year budget cycles," said Martin, who is also founder and president of Demartek LLC, a Microsoft MVP for file storage and network testing in Arveda, Colo.

Windows Server 2012 will provide features attractive to IT pros, such as increased virtualization scalability in Hyper-V 3.0 and faster data throughput, as well as capabilities directed towards customers who want to move to cloud computing.

It helps that previous versions of Windows Server comprise the majority of servers already in place. More than 87% of respondents in TechTarget's Windows Purchasing Intentions 2012 survey said Windows Server is their primary operating system.

Still, it will take a while before customers adopt Windows Server 2012. And efficiencies from increased virtualization in the new version may also lower demand for more servers, according to one observer.

"On the whole, I don’t see Server 2012 driving hardware sales," said Roger Jennings, a Windows Azure MVP and developer in Oakland, Calif. "Better virtualization features are likely to reduce the aggregate number of physical servers required to handle a given workload," Jennings added.

Despite that, Windows administrators look forward to the release, said Windows user group president Martin.

"I'm glad they're releasing Windows Server 2012 before Windows 8," he said. That will at least give IT pros a chance to test and begin getting new servers in place before being inundated by early waves of migration to Windows 8, which is slated for commercial release on October 26.

Stuart J. Johnston is the Senior News Writer at Contact him at

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