A time for change: the server edition

As the age old adage goes – change is good.

At this point in time I’m certain that most readers are well aware that in July 2015 Microsoft will be pulling the plug on its iconic Windows Server 2003. For them, it’s time for a change. But what does this mean for you? Most significantly, it means that once the end of life date passes Microsoft will stop issuing security updates that protect your data center, which in many ways, is the key to protecting your organization from external threats.

As we have seen with Windows XP, there is often reluctance with regards to upgrading as product life cycles come to an end. This may very well be the case with Windows Server 2003 as well. While it is true that you may be able to get mainstream support, or even an individual agreement to keep the existing 2003 Server instance running, the fact of the matter is that every product has a life cycle and that upgrading is a natural and beneficial part of the process.

It is also worth being aware that we are experiencing an increase in the amount of data every organization handles or stores and therefore a simple software upgrade may put existing infrastructure to the test. Computing power and demand on the machine may be higher as a result. Therefore, an upgrade to a new infrastructure may be necessary. Simply put, if I install Windows 2008 OS on a desktop or laptop that I bought over 10 years ago, it would not be able to cope with the change – in fact chances are it wouldn’t even boot up!

That being said, many organizations have migrated to newer platforms in anticipation of the change; however, there are still a large number of Windows Server 2003 machines out there in the marketplace that will need to be upgraded in the near future. Unlike replacing a home PC, server migration is quite complicated and must include a comprehensive plan around how to make the transition to a completely new server operating system.

As you would imagine, organizations looking to upgrade server platforms need to commit to a rather significant capital investment. This, in turn, creates a unique revenue opportunity for vendor and distribution companies. And if the last few months are any indicator, these revenue opportunities will only bolster the solid growth we’re already seeing in this space. According to NPD Distributor Track, data for the last 6 months (September 2014 to February 2015) shows that server revenue grew positively in 4 of 6 months with December being the best month so far (+36% over same time frame last year).

I expect this revenue growth will remain positive in the months to come as organizations continue to invest in server upgrades and infrastructure improvements, such as data storage and networking. Distributors and solution providers should expect to reap the benefits of this transition as companies look to them to help manage this necessary transition.

Ali Naqvi manages the IT Hardware Distributor Track business which encompasses all IT Hardware distribution partners in Canada. Working closely with distribution partners, Ali helps them understand and utilize NPD data to highlight positives and uncover opportunities.

Prior to joining NPD, Ali spent 7 years with a leading retailer in Canada gaining experience in retail management and buying technology categories. Ali is a business graduate by qualification.

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