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Probe Research Examines the Markets to Watch
Web servers are the most visible evidence of the vast range of equipment being deployed at the edge of the network core as per technology research firm, Probe Research. Server appliances (especially super-slim and thin-server) are becoming a major element of the wider Web server market according to Richard Endersby, Vice President and Director of Global Internet Infrastructure Markets Subscription Service. Because they’re easily configurable, cheap and dense, these devices are appealing to more and more data center operators.
New entrants such as Cobalt, VA Linux and Network Appliances, as well as established vendors, such as Compaq, Sun and IBM are all actively pursuing this market. The major corporations have looked to get a fast inroad into this segment through acquisitions and/or licensing. More specifically, Endersby considers industry giants Intel and Lucent.
"Intel needs to move quickly to rectify its overexposure to the competitive PC market by acquisitions or product development in the emerging broadband or RF area," says Emdersby. The recent release of the long-awaited Pentium 4, the first significant new architecture for the company in 20 years, may provide relief from the tenuous margins in the commodity microprocessor market. This relief, however, is likely to be temporary.
While Intel has diversified into many new ventures - from high-end hosting centers to Web-enabled consumer equipment - the ideal prescription remains to enter into chipset manufacturing of thin-server Internet appliances to avoid missing out on an increasingly important marketplace sector.
"Lucent’s problems, on the other hand," Endersby continues, "although serious, are not terminal. They’re related to short-term troubles with heavy discounts and nonstandard sales agreements as well as longer-term strategic errors." The company has a strong position at several large customers, and its immediate outlook depends heavily on the business it receives from them.
His research reports that Lucent is the last of the major "incumbent" vendors to divest from its core carrier business. The disposal of the power and microelectronics division may unlock some of its inherent value and allow the company to concentrate on its core business of serving the service provider marketplace. However, without the microelectronics business, Lucent may lose the significant benefit of having a secure source of components for its own manufacturing.
For more information, visit www.proberesearch.com.