Server prices broke the $500 mark this year for the very first time, driving a renewed interest in on-premise hardware solutions by Australia's small to medium business sector (SMB).
Traditionally price sensitive when it comes to hardware purchases, the SMB sector is beginning to respond to new low cost server options more suited to a tight budget environment.
Dubbed the new Ultra Low Cost Server category by Gartner, servers are now similar in price to a Personal Computer (PC).
Gartner research has identified x86 servers in price bands of $500 to $1000 as the biggest area of growth for the Asia Pacific SMB sector.
It isn’t just price that is driving SMB interest; it is also the simplified configuration and easy management that make these servers ideal for organisations with fewer than 100 employees.
Simplicity is critical for these businesses as they lack dedicated staff to manage in-house IT.
This is why the SMB sector has traditionally had an over-reliance on PCs.
At the launch of its Windows Small Business Server 2011, Microsoft said there were more than 25 million SMBs worldwide with at least two PCs.
More than 63 per cent of those businesses do not have a server.
This is set to change as SMBs get access to servers that have enterprise credibility but without the hefty price tag, according Errol Rasit, principal research analyst at Gartner.
Rasit said server prices hovered around the $500 mark for a couple of years before breaking this barrier in recent months.
He expects a new push in the SMB space by providers such as HP, IBM, Dell and Fujitsu to open the doors to fierce competition.