As IT managers virtualise their x86 servers and consolidate applications on a smaller number of systems, they're demanding more from the hardware they buy: more memory, certainly, but also added high-availability features such as multiple power supplies and cabling ports.

Some businesses have even gone a step further. Purdue Pharma LP last year started buying Stratus Technologies' fault-tolerant servers, similar to those used by financial services companies and emergency call centres, to run Microsoft's Active Directory and other applications in a virtual environment.

That was the drug maker's first foray into fault-tolerant servers, and it came after the company decided to use VMware's virtual server technology, said Stephen Rayda, director of architecture at Purdue.

Rayda said last week that he didn't want Purdue's IT administrators to have to answer the following question if the virtualised system failed: "When they lose 30 servers on a single box, they're going to get asked, 'What could we have done to avoid this?' "

CIO at Austin Energy Andres Carvallo said he's buying fewer servers now and focusing his budget for Intel-based machines on systems "with higher capacity and more fault-tolerant-type features." He embarked on an 18-month project last year to reduce his server count from about 250 systems to 80, largely through virtualisation.

CIO at Education Management Christopher Kowalsky, a company that operates a variety of academic institutions with a total of about 66,000 students, is evaluating VMware's software and Microsoft's rival Virtual Server offering. "We're the same as most organisations," he said. "We have a lot of servers and a lot of processors, and we're continuing to try to figure out how to best utilise them."

But Kowalsky added that if his company does adopt virtualisation technology, he will run the software on fault-tolerant, highly resilient systems that are capable of failing over to another box. Having servers with high-availability features is "going to be a big part" of any move to virtualisation, he said.

Impact on server sales?

Although virtualisation and grid computing technologies can increase server utilisation and reduce the need for new boxes, worldwide revenue from server sales grew 5.5 per cent last year, according to IDC. Analyst Stephen Josselyn said he doesn't think virtualisation will hurt server revenues.

Virtualisation is more about better utilisation of resources, Josselyn said, adding that he expects users to continue to scale out their system installations more than they scale up single systems.

But Gartner has a different take. In a report presented at its data centre conference in December, Gartner said higher processor utilisation rates could "dramatically reduce server hardware and administrative spending."

Users typically cite ease of management, reduced support needs and associated staffing savings as the top benefits that virtualisation can provide, not server cost reductions. But even if some of the hardware that users are buying for virtualised environments is more expensive than what they used to purchase, the fact remains that they're buying fewer servers than before.

"We're developing a love-hate relationship with our hardware vendor," said Alex Cruz, who is an e-mail, Web and VMware administrator at Dean Health System. Dean Health uses IBM's eServer BladeCenter hardware, and IBM "loves the fact that we are buying blades, but obviously it has cut down on our overall cost of servers that we're purchasing," Cruz said.