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Server Sales Up 13 Percent

The Gartner group has released a study stating that worldwide server sales are up 13% for the first quarter of 2015. According to the report, strong sales in the USA – largely due to a strong American dollar – were enough to counteract the affects of flat or declining sales in other parts of the world.

The first quarter of 2015 was the "second-largest volume quarter ever," according to Gartner's Adrian O'Connell. The results appear to contradict the doom predictions of analysts and journalists who see the world turning away from new server hardware in favor of cloud solutions. Strong demand in the hyperscale sector leads to the possible explanation that local private cloud systems are fueling some of the growth.

HP continued its reign as the worldwide leader in server sales, followed by Dell.

Chips Consolidation

A pair of large mergers are shaking up the semiconductor industry. The relatively unknown Avago Technologies agreed to buy Broadcom for a total of US$37 billion in cash and equity. The deal, which is thought to be the biggest in the history of the high-tech industry, will create the third largest semiconductor business in the United States.

Avago, which began as a spinoff of HP, specializes in chips for storage controllers and networking equipment, as well as fiber optics and Large-Scale Integration (LSI) chips. Broadcom, with its emphasis on wireless technology, DSPs, and system-on-a-chip products like the famous Raspberry Pi, should complement the Avago's portfolio and place the company in a strong position to play in the emerging Internet of Things market. The merged company will take the name Broadcom.

A week later, Intel announced the purchase of Altera for US$16.7 billion. Like Avago's Broadcom deal, Intel's purchase seems designed to diversify the product catalog and prepare for a future in the Internet of Things. Of particular interest is Altera's Field Programmable Gate Array (FPGA) technology. FPGA allows for re-programming processor logic after deployment. Intel had previously announced a plan to integrate FPGA into its Xeon chip line, and the Altera acquisition appears to have emerged from that plan.

Both moves herald an end to the old world, where Intel could stake its fortunes on sticking x86 processors in millions of computer around the world and Avago could focus on device controllers and other behind-the-scenes high-tech equipment. The next generation appears headed to a world with flexible, customizable systems and lots of chips everywhere.

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