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What's driving investments in Windows servers?[5/27/2010]
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Every organization makes periodic investments in new server hardware, and chances are that you have new servers budgeted for sometime this year. Across the industry, there's no question that the demand for Windows servers is the strongest that it's been in years.

For example, IDC reports that part of the uptick is due to stronger sales of x86 server hardware. The quarterly revenue for Q4 2009 hit $5.4 billion for Windows servers, representing over 41% of overall quarterly factory revenue -- that's huge.

But when you look past the sales figures, what factors are really driving the acquisition of new servers - especially platforms running a current operating system like Windows Server 2008 R2? The answer to that question might partly be found in current research such as TechTarget's Data Center Decisions survey for 2010, which gathered input from almost 1,000 IT professionals across a variety of roles, locations and vertical markets.

Infrastructure considerations

Respondents reported that most new server purchases in 2010 are related to data center infrastructure improvements. More than 43% chose new servers to enhance server virtualization capabilities, 26% sought better energy efficiency to manage power costs, and 25% want larger and more powerful servers to achieve better levels of hardware consolidation (reducing floor space demands). This is an important combination of factors that complement each other. For example, virtualization allows consolidation which reduces power and floor space, and in turn allows organizations to purchase fewer advanced servers.

Microsoft's development of Hyper-V (most notably with the release of Windows Server 2008 R2) has likely contributed to the emphasis on server virtualization capabilities. Current versions of Hyper-V make it easier to provision new virtual machines (VMs). It also supports live migration which eases workload balancing and server maintenance. Experts note that Windows Server 2008 R2 provides a licensing structure that readily supports the operating system on a number of virtual machines. In short, Windows Server 2008 editions can lower the cost to create and support VMs, allowing more Windows Server VMs to appear in the enterprise -- driving more data center growth.

"The reduction in technical complexity, the movement of spending from capital expenditures to operating expenditures, and the flexibility of the deployment are all significant," said Dave Sobel, CEO of Evolve Technologies, a solution provider headquartered in Fairfax, VA.

Growth in the data center

But the need for growth is not attributed to virtual machines alone. Data center growth also allows an organization to support more users and workloads more effectively. Over 43% of IT professionals reported server purchases to address normal increases in computing capacity, while 38% had needs geared toward handling new applications. Windows Server 2008 R2 deployments -- especially with Hyper-V -- have proven popular in organizations that are implementing new Microsoft server technologies like Exchange Server 2010, SharePoint 2010, and so on. Only about 10% of respondents bought new servers to build or extend their internal cloud computing efforts.

The intense competition that Microsoft brings to the virtualization market has put enormous pressure on other virtualization vendors. Experts report that even dedicated VMware customers are deploying new servers on Hyper-V because it's proving more cost-effective for them to do so. "Better technical support, better assistance.it just makes no sense for them to spend money (lots of money) for something that Microsoft provides out of the [Windows Server 2008 R2] box," said Rand Morimoto, president of Convergent Computing, a solution provider located in Oakland, CA.

Business needs

There is also an assortment of business-related factors that drive new server purchases. Over 40% of IT professionals acquire new servers to replace existing systems that are reaching end-of-life or coming off lease -- organizations can typically replace this aging hardware with more powerful systems with full warrantees. New servers usually ship with advanced management tools, and almost 14% of respondents note that new servers reduce administrative workload.

In terms of business needs, Windows Server deployments also appear to complement Windows 7 rollouts. Experts report that the move to Windows 7 typically involves the Microsoft Deployment Toolkit (MDT) 2010, so organizations are deploying that toolkit on Windows 2008 R2 servers and upgrading Active Directory 2003 to Active Directory 2008 R2 to accommodate virtual servers. "Windows 7 rollouts are driving Windows 2008 R2 server and virtual server deployments," Morimoto said.

The tip of the iceberg

With many economic worries ending and support for Windows XP entering the last stages of its lifecycle, organizations are taking a fresh look at their IT roadmaps and justifying new server acquisitions. Windows Server 2008 R2 figures prominently in those plans, largely due to the native availability of Hyper-V and close coupling of Windows Server 2008 R2 to Windows 7. Even organizations that don't currently use virtualization will have the tools in place to deploy that technology in the future.