Quoting TechTarget

For hardware vendors, single-digit revenue growth in the server market has become the rule lately, with IDC pegging the 2006 growth rate of the worldwide market at 5.2%. The lone bright spot for vendors, however, has been blades.

According to research firm Gartner Inc., in 2006 the blade server market saw increases over 2005 for revenue (36.5%) and shipments (33%). "For HP and the server industry as a whole, blades are the fastest-growing segment of the market," says Steve Gillaspy, group manager for HP BladeSystem.

Industry leaders HP and IBM (as well as Dell Inc. and Sun Microsystems) are aggressively pursuing the blade market by touting the inherent manageability of blades in conjunction with cost and power savings. Offering more memory, smaller footprints, and improved power and cooling efficiencies, blades are being positioned as the solution to the woes that plague data centers, namely space constraints and power consumption. With improved memory and I/O, blades work well with virtualization, enabling data center managers to further consolidate physical servers.

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I even offered my own insight into this topic in the article:

While there are no standard chassis sizes -- industry leaders IBM and HP have chassis capacities of 14 blades and 16 blades, respectively -- a rule of thumb is that customers need to buy enough servers to fill half the chassis in order for the cost of blades to break even with the cost of rack-mount servers. But because the chassis includes all the components needed for cabling, switching, networking as well as power supplies, customers don't have to buy as much ancillary equipment as they do with rack-mount servers. For organizations that need several servers -- on the order of 10 or more -- blades cost less than rack-mount servers.

"People normally tend to simply look at the initial bottom line," said David Marshall, director of business development and product management at InovaWave Inc., a provider of virtualization performance software, and the owner/operator of VMBlog.com, which covers blades and virtualization.

"In a greenfield environment, in which data centers are looking to add to capacity, the key to comparing acquisition costs between blade servers and rack-mount servers is to keep in mind all of the additional interconnect components, and the hardware and software required, which come standard with blade servers," Marshall said. "When you start adding in the costs of HBA [host bus adapter] cards, Ethernet ports and cables, power cables and power distribution units (PDUs), KVM cables and switches, and the management of software and hardware redundancy features, the degree of cost separation gets wider," he says.

So the initial outlay for blades -- provided that an organization is buying a critical mass of servers and adding to overall capacity -- can compare favorably with the purchase of rack-mount servers and all the attendant equipment required.

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Read the entire article, here.