Data Centers Buoy Intel Sales

Server sales to enterprise companies were stagnant in the fourth quarter of 2006, marking the 10th consecutive quarter of slowing server sales, according to the latest quarterly survey data from IDC. The slowdown is attributed to growing adoption of virtualization technology, which allows companies to get more mileage out of their existing servers.

While enterprise server sales are cooling, the data center market continues to heat up. That's the news from Intel, which says that it's selling plenty of processors to Google, Yahoo, Microsoft and fast-growing Chinese search provider Baidu. Here's what the company tells ZDNet:

Data center service providers have long maintained that virtualization and consolidation will help their business over the long run, as the need for industrial-strength power and cooling leads more companies to shift their equipment from back-office server rooms into hosted data center environments. Intel's update suggests that this forumula has held true for the largest data centers - the massive search engine server farms - but it may take some time to get a better sense of virtualization's long-term impact on colo and managed hosting centers.