"Despite downward pressure from server virtualization and emerging containerization trends, which further boost the utilization of each physical server, we project positive server shipment growth over the next five years," wrote Sameh Boujelbene, director at Dell'Oro Group. "The growth in server shipments will be fueled by a number of factors, such as software-defined systems. Our research shows that cloud data center operators, like Amazon, Facebook, Google, and Microsoft, are building their own storage systems using specialized software on commodity servers in lieu of purchasing storage arrays. The degree to which other specialized equipment will be cannibalized, and the degree to which enterprise users will adopt software-defined systems, will depend on software development. We are seeing significant vendor activity in specialized software development, but one clear trend is that it is boosting server shipments."
The growing trend toward software-defined networking (SDN) and network functions virtualization (NFV) is beginning to drive increased adoption of commercial off-the-shelf (COTS) servers in favor of specialized gear. According to the Dell'Oro Group, specialized software on commodity servers can be expected to cannibalize other markets, such as storage arrays and network appliances.