As organizations increasingly turn to virtual server hosting providers to manage their data center needs, vendors are increasingly purchasing new physical servers to meet industry demands, according to a Gartner Worldwide Server Shipments Survey.
The survey found volume growth of 14.2 percent and revenue expansion of 15.3 percent in the server market for the third quarter of 2010. The demand for IT outsourcing solutions is, according to the report, the primary driver behind the industry expansion.
"The third quarter produced some solid year-over-year growth globally in both shipments and vendor revenue. All regions showed growth in both shipments and vendor revenue save one," said Jeffrey Hewitt, research vice-president at Gartner.
According to a recent Microsoft report, virtual server hosting is also growing because economies of scale are impacting enterprises around the globe. The increased need to develop extensive IT infrastructure to support business processes is creating an environment in which web, server and other IT hosting organizations can thrive, the report said.
Microsoft's report said virtual server hosting providers can strategically place data centers to minimize costs and maximize efficiency, making them a natural choice for businesses struggling to maintain their own internal infrastructure.