Server shipments fall ... just as AI drives demand for costlier kit
Changing priorities among enterprise and cloud providers are driving apparently conflicting trends, according to research outfit Omdia, with demand for compute resources remaining high, especially as ChatGPT has spurred interest in AI training, yet at the same time server shipments are declining.Cloud and Data Center Market Update predicts a contraction in server shipments for the first time since the global financial crisis of 2007-2008.
Those OEMs have apparently told Omdia that many enterprises are now reluctant to commit to large projects, with IT spend pull back seen particularly among financial services and manufacturing companies in North America. Microsoft, Google and Meta were all investing in new servers in Q1, while AWS pulled back somewhat on new server installations, but by Q2 both AWS and Meta are holding back on spending, Omdia said.Another contributing factor in the mix is lengthening server lifecycles. The normal lifespan for server kit at all the big cloud providers is now 6 years, while a step down a level to the tier 2 providers shows that some are reporting life spans of nine or 10 years, according to Omdia.
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