IDC: Web services to enable $4.3B hardware market by 2007

IDG News Service - As IT moves to adopt Web services, IS managers will end up spending more money on hardware than on software, an IDC analyst said yesterday.
Speaking at IDC's Enterprise ServerVision conference in San Jose, analyst Vernon Turner predicted that the move to Web services would create a $4.3 billion hardware market by 2007. Software spending will reach $3.4 billion, he said, while spending on services would account for $7.5 billion -- nearly half of the $15.2 billion IDC expects IS managers to be spending on Web services four years from now.
IDC estimates that total spending on Web services will approach $3 billion in 2003.
"Even though your revenues in the traditional hardware field are flat, you have to expand your opportunity," Turner said, speaking to the several hundred systems vendors attending IDC's annual server market-analysis event.
During a recent survey of IT buyers, Turner said, more than 80% of respondents said they were planning at least an "incremental hardware purchase" as part of their Web services plans. More than 30% expected to buy "all new" server and storage hardware, he said.
The IDC analysts had expected to find that Web services would typically be deployed on existing hardware, Turner said, and that the Web services hardware market wouldn't be significant. "In fact, the data has shown the exact opposite," he observed. "We were actually surprised when we saw the hardware numbers."
The survey also found that 90% of respondents expected to be deploying Web services by 2004 and that 77% expected to roll them out by this year.
Turner said that many of the hardware sales enabled by Web services would be generated by switching "serious" workloads like database and transaction-oriented jobs to commodity systems. "If you can build modular architectures that are highly granular ... you can start to remove workloads that were on the high end to a 2U server," he said.