General Motors might be globalising its business, but in the area of servers, the auto-maker is thinking small. "The smallest physical-sized servers have a far better cost per unit of work than the large, 32-CPU-class boxes," says Mark Hillman, GM's director of global computing centres. The former will serve as building blocks as the company moves from a project-specific, application-centric focus to a standardised server utility model.

The effort started with engineering, but "now we're moving that to the more general-purpose business applications," says Hillman. The results so far have been promising. By shifting from vertically scaled servers to commodity systems, GM reduced operating costs by 65 per cent in its Toronto data centre. That project will continue through 2008, Hillman says.

GM isn't alone in planning major server projects for the year ahead. In sister publication Computerworld's most recent Vital Signs survey, servers topped the list of planned purchases for 2008, and nearly one in three respondents (32 per cent) said that server spending represents the single biggest increase in their IT budgets.

IT executives cite a litany of reasons for moving server-related projects to the front burner. Consolidation is a big one. Some organisations are also preparing for new versions of key software, such as Windows Server 2008, and servers that will come preloaded with an embedded VMware hypervisor to speed the setup of virtual machines. "That's one of the biggest things we'll see," says James Staten, an analyst at Forrester Research.

Then there are regular server refreshes. After the dot-com crash, many organisations began keeping equipment for four, five or even seven years rather than the usual three. Many of those systems are now being retired.

"Data centres today have a fairly old infrastructure. We find some very old boxes out there," says Klaus Schmelzeisen, vice president of HP's consulting and integration infrastructure practice.

Compared with the Pentium 4-class and older machines still in many data centres, the latest technology performs better, takes up less space and is far more energy efficient. New servers also use multi-core processors, which are better suited for the consolidation of the many Linux and Windows applications that continue to migrate onto virtual machines.

"Forty percent of our servers are virtualised," and that consolidation will continue in 2008, says Jim Hull, group head of network and operations services for MasterCard Worldwide's global technology and operations group.

The Bank of New York Mellon also plans to "hit the virtualisation space more" this year, says Dennis Smith, first vice president in the bank's IT group. Having just completed a merger last July, the bank is moving rapidly to establish hardware and software standards as it consolidates data centres. "We are speeding up the refresh cycle because of the need to do something quickly," Smith says.