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Rackspace Survey Reveals Many Customers Will Not Pay a Premium for Intel Servers Over AMD; Enterprises Rely on Service Providers to Untangle Complexities of Server Technology

Posted on: Monday, 14 November 2005, 09:00 CST

Enterprise server customers are unwilling to pay a premium for an Intel server, according to a recent customer survey conducted by the leading hosting provider, Rackspace Managed Hosting. Sixty-five percent of survey respondents answered that they are not prepared to pay a premium for an Intel server and 25 percent indicated they would only pay up to 10 percent more for an Intel server.

Rackspace, with nearly 17,000 servers under management, offers its managed hosting customers the option of Dell Power Edge servers with Intel processors or "white box" servers with AMD processors. Of the survey respondents running Intel servers at Rackspace, nearly 56 percent indicated they would purchase a branded AMD server and 29 percent might purchase a branded AMD server.

The survey also revealed that enterprises are less concerned with the specific processor technology used to power their applications because they rely heavily on their managed service provider to optimize the technology delivery. When asked to weigh in on Rackspace's x86 processor strategy, responses varied with 20 percent and 11 percent preferring Intel and AMD respectively. However, the largest consensus, at 43 percent, was that Rackspace's x86 processor strategy is not important to them so long as the company continues to guarantee server uptime and a service level agreement.

"What this survey tells us is that there is a shift away from brand-name cache and the associated costs because enterprises are relying on their service providers to untangle the technology issues. Hardware issues like power efficiency and processor technology are less of a concern to the majority of our customers because we guarantee to keep their configuration up and running regardless of which hardware they select," said Paul Froutan, vice president of product engineering, Rackspace Managed Hosting. "It is our job as a managed services provider to make the technology work for our customers so they can focus on what they do best -- building value-added applications."

Additional survey findings included:

-- More than 25 percent of survey respondents feel market pressure to use an Intel-based server.

-- If all branded servers were priced the same, 48 percent of surveyed customers would choose an Intel server and only 28 percent would purchase AMD.

-- It is still unclear to the respondents whether AMD or Intel will ultimately be more successful in the server market. Nearly 47 percent of respondents are unsure of which company will win the server race in the long run, yet 42 percent believe the winner will be Intel.

The methodology for this research involved sending an email survey via a third-party research tool, Clicktools, to 2,111 of Rackspace's customers. Of the customer pool that responded to the survey, 52 percent utilize Dell Power Edge servers with Intel processors at Rackspace and 48 percent utilize "white box" servers with AMD processors at Rackspace. More than 15 percent of survey recipients responded to the questions. Detailed information and the full survey report can be found at http://www.rackspace.com/aboutus/surveys/RackspaceServerProcessor PerceptionsSurvey.pdf. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

About Rackspace Managed Hosting

Rackspace Managed Hosting(TM) is the fastest-growing managed hosting provider for customers of all sizes -- from start-ups to enterprise customers. Founded in 1998, Rackspace has built a world-class service organization based on its philosophy of Fanatical Support(TM). The company offers a wide range of managed services for enterprise hosting platforms and currently hosts 15 percent of the Fortune 100 Companies. For more information, visit www.rackspace.com, or call 800-961-2888.

Source: Business Wire

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