The Desktop Is Dead. So Is The Server!

Are rumors concerning the death of the desktop PC greatly exaggerated? Or will the server soon be joining it on the Grim Reaper's hardware hit list?For years -- no, make that decades -- doomsayers have predicted the demise of the desktop PC. Back in the 1990s, for example, Larry Ellison insisted that thin-client computing would ravage the desktop market.

And today? Well, today, umm, Larry Ellison insists that netbook computers will ravage the desktop market. At least this time around, he has some company.

Now, some even bigger Big Money than Larry Ellison predicts that the business server market is headed the way of the Pet Rock and the Delorean: "Servers -- once considered the Big Engines of a web-driven economy -- are the least attractive option for technology investors, according to analysts at Credit Suisse. More specifically, Credit Suisse says that tech buyers will spend more on blade servers, as the sort of Big Engines that made Sun Microsystems (Nasdaq: JAVA) rich in the '90s lose their luster. 'We believe blade servers will be the most strategic segment for vendors," reads a research report excerpted in Barron's. 'We believe blades will represent the key source of industry profit and revenue growth in coming years. Our forecast suggests that blade servers will account for 21.3% of server revenue in 2012, up from 10.3% in 2008.'" "More broadly," writes Motley Fool columnist Tim Beyers, "the shift to blades suggests a broader trend towards common, lower-cost systems and open-source technology. Big Engine makers like IBM are adjusting by pitching whole packages of servers, software, and professional services."

When anyone mentions blade servers and Big Blue in the same paragraph, it's fair to assume that only big enterprises need to pay attention. Dell, however, hopes its new "SMB-in-a-box" lineup, which bundles hardware with pre-configured open-source software packages, will prove an attractive proposition for smaller firms concerned about keeping IT costs to a minimum.

I don't think it's fair to say that the server is dead. Let's just say that it will have to work a little harder to earn its keep.