Thin servers - boxes that are dedicated to specific tasks, say a firewall, HTTP, email and ecommerce server - have been popping up at an amazing pace.
These units are alternatives to the more traditional approach of running lots of software services on a single, larger Unix or NT box and two research firms recently stated that they believe the market is ready to go mainstream.
The Gartner Group defines a thin server as a specialised, network based hardware device designed to perform a single or specialised set of server functions. It is characterised by running a minimal operating architecture, and client access is independent of any operating system or proprietary protocol.
The device is a "closed box," delivering extreme ease of installation and minimal maintenance, and can be managed remotely from a Web browser.
"Like toasters, blenders, microwaves and coffee makers, this server appliances perform a single function well, cost relatively little and work with virtually no need for costly installation, maintenance or repair," said Intel's Brad Romney, business unit manager of Intel's small business networking operation.
Network appliances are designed to support popular industry standards such as TCP/IP and HTTP, so they should easily interoperate with all components on the network and all types of computers.
Analyst Dataquest projects the network appliance market segment to grow to more than $16 billion by 2002. The worldwide market experienced strong growth in 1998 with revenue reaching $1.5 billion, a 52 per cent increase over 1997.
But James Staten, senior industry analyst of emerging server technologies at the Gartner Group, said a major challenge for thin server vendors is to continue to educate users about this relatively new class of products.
"Education of the end user community remains necessary and this lack of education contributed to a lower than expected growth rate of the market," said Staten. "However, it cannot be overstated that for a market this young, the growth that occurred in 1998 is extremely positive and shows that the server appliance trend is being validated by the market."
Staten also said the servers will be marketed as appliances because of their emphasis on ease of setup and maintenance. The most mature market, device control thin servers, which is composed mainly of print servers, grew 13.6 per cent, while the workgroup Internet appliance category saw revenue rise more than 200 per cent.
Large businesses bought the most thin servers, or 35.6 per cent of the total. Medium sized businesses, defined as those with more than 100 employees and fewer than 1,000, were the second largest market at 28.9 per cent. Small business accounts for 16.5 per cent of the market.
The new market should not be confused with the different class of single function servers targeted at industrial strength applications such as Web hosting and telecommunications applications. Intel is working with companies such as Dell, Hewlett-Packard, Novell and Oracle for that market.
The initial entries into this market were greeted with scepticism or disdain. They were slow, complex, feature limited and not nearly as easy to manage as the market had been led to believe.
Other similar efforts include Oracle's "Raw Iron", which is an attempt to create a new market for database server appliances that can lower overall operating costs. Oracle's plan is also intended to obstruct Microsoft's push into the enterprise software market.
Thin servers can be broken down into five market segments: the small business all in one area; applications; network attached storage; device control; and the home market. Staten said the market opportunities in the small business area will come from vendors like Compaq, Microsoft, Intel and SCO, "who jumped in with both feet in 1999."
Caching is expected to be one of the biggest opportunities in the application area and Staten predicts close to double growth within a year in the NAS market. The analysts predict print servers as the growth opportunity in the device control area where there was $574 million revenue reported for 1998. Staten said consumers will buy primarily set top boxes in the home market.
Intel and Microsoft announced last month at the Windows Hardware Engineering Conference that they will join forces to make the thin server devices "highly reliable" and easier to set up than regular servers. The companies said they will be aimed at small businesses needing file, print and secure Internet content sharing.
But while many small offices with multiple PCs would benefit from email and file sharing, fewer than 30 percent have done so because of the cost and complexity of installing a traditional PC server, according to a report from analyst International Data Corporation.
"This market is poised for strong growth as a result of recent price reductions to Microsoft's Windows Terminal Server," said Eileen O'Brien, director of IDC's thin clients research program. "The industry now has an affordable enterprise multi-user operating system that supports enterprise thin clients. This should spark adoption of server-based computing and thin clients throughout enterprises now and in the future."
Other factors that will contribute to the market's growth include Y2K issues and the emergence of application service providers.
Intel and Microsoft said the products based on these technologies are expected to be available from original equipment manufacturers (OEMs) in the second half of 1999. Additional players in the market include Mirapoint with its Internet Email Appliance and Northern Telecom with its Baystack Instant Internet models.
Included in this category is Whistle Communications' toaster-size device that is based on the UNIX operating system and provides e-mail, Web browsing and Web publishing features. Compaq also entered the market with its Windows-based "Neoserver."
Thin servers can also act like Internet post offices, using simple mail transfer protocol (SMTP) and post office protocol (POP) to let end users access, send and store email. By buying a thin server with built-in email server, network managers, for example, won't have to spend time integrating hardware, operating systems and applications.
Network appliances will usher in a new era of technology use, enabling tremendous performance enhancements, cost reductions and new levels of productivity throughout the business sector.
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