DIS-covery Broadcast Servers Trends Report

The DIS-covery Trends Report: Servers is derived from our most recently published Broadcast Servers World tm 2008 that came out in March 2008. That report, in its full version, intended mainly for manufacturers also includes product data, brand shares and brand image rankings as well as greater depth of detail, generally. The full report, BSW 2008 is one of the most popular reports in the server industry, subscribed to by most of the major manufacturers.

What the DIS-covery report on Servers gives you is, lots of technology trends information, budgets and revenues, shows and magazines, classification, applications, purchase sources, as well as a key to what the major trends are that are most moving the marketplace. See the Table of Contents for greater detail.

Executive Summary of Broadcast Server Worldwide 2008 Findings

Following the original benchmarking and tracking achieved by previous DIS global server surveys. The Servers reports were on the mark in many of their assessments of the state-of-the-market when they were published in March each year.

Of course, the professional media server market still remains the province of principally a handful of suppliers, those companies you are most familiar with. But, their brand ranking is undergoing a pretty significant overhaul.

Principally, in reporting, as they did, that – since publication of our domestic-only report Broadcast Servers USA tm 2000 – the field had been flooded with new competitors, all of them were offering relatively inexpensive server solutions and that had the effect of pulling down average prices, overall. That per-channel price pressure continues, but doesn’t seem to be as severely affecting product prices as it did a year or two ago.

A Few Facts Concerning the Conduct of BSW 2008

a) BSW 2008 derived all of its opinions and product census data directly from media server owning or purchase planning end-users found among the world’s population of TV broadcasters, cable facilities, production facilities and institutional sites, rather than ‘experts,’ or ex-factory shipment data. We added institutional names (from education, corporate, religious, governmental and medical sites) several years ago to the sampling and ultimately to the respondents counted.

b) Interviews were conducted in a two-fold method, 1) project respondent enrollment and product/share data collection is handled in a C. A. T. I. telephone interview and then 2) those same respondents visit a web site where they complete the rest of the survey questionnaire on-line. This is done using four regional calling centers. This year, that meant centers in the USA, Argentina, the Philippines and the UK.

c) In all, we gathered a broad range of 416 of such responses, data entered and tabulated them, from amongst 52 countries and divided into 4 markets (broadcast, cable, production and institutional) and 4 regions (as identified by the sponsoring manufacturers).

d) Again, we not only gathered data, generally, on server ownership and purchasing, but did so also by applications, such as ‘ingest/capture,’ ‘news,’ ‘play-to-air,’ ‘VOD’ and so on, and reported it and forecast it as such.

e) Also considered virtually every aspect of other technologies and other factors that effect server purchasing and use.

2008 Trends and Important Changes

The first overriding observation is that the server market continues to expand at a very healthy rate, approximately at 15% per year, which explains why it is attracting more and more supplier companies each year to introduce new server products. Part of this expansion is because of a build-out of new channels, part by replacing older servers and part by the arrival of new server customers. Most of the same brands that had dominated the USA market in the late 1990s and 2000 still reign supreme today, but their ranking has shifted considerably.

What is Driving The Current Server Market?

There have been a number of broad trends revealed by BSW 2008 including, but not limited to such things as the top shares realignments.

1.) Prices continue to be again pressured down, despite the fact that the relative market shares (and channels/units represented by) the smaller companies still have not climbed significantly. Nonetheless, the availability of considerably less expensive brands and ‘cheaper-by-the-channel’ server solutions of the lower priced competitors has heated up the market and given significant grief to the major brands, forcing them to reduce their per-channel prices in keeping with the tenor of the marketplace.

2.) The transition to High Definition is building a need for modernizing servers. After at first using a more hybridized approach to accommodating HD, or using separate chassis, users are now rapidly moving to upgrade or wholly replace the non-HD with fully HD compatible chassis.

3.) Getting rid of the old series: We continue to have a growth market for servers and it is driven to a great extent by the need to replace outmoded models or series, many of which have been in place over a decade and are showing their age. Virtually all the original generation of – first -- servers have now been retired.

4.) Replacing video recorders: While they are not yet relegated to become boat anchors, most video recorders are being removed and replaced by servers performing the very same functions and then some.

5.) Storage outside of servers is increasing. That phenomenon is not decreasing the need for servers but lessening their use as storage devices, per se. That said, there is a massive growth curve being seen in storage and it will invariably have both a positive and a transformative impact on server use.

6.) Central servers versus application-specific solution architecture, while still holding a significant place in the market. The strong movement towards either application-specific devices or the use of general- purpose devices for multiple applications, not necessarily devoted to a central control or operational purpose, is seen. Some decline is seen, for example, in servers being multi-tasked and a similarly timed modest build-up in the more dedicated purpose server.

7.) New specific server uses are proliferating. Beyond VOD there are HD-only servers, Digital Cinema servers, single-computer servers, sports servers, and a number of other arcane and narrow uses are emerging.

8.) SAN (Server Area Networks) use has continued to be the major technical driver this year. Nearly all end-users reported either using SAN structure or wanting to. Add to that the growing relationship between SAN and NAS provision and that further reinforces the desirability of SAN structures.

9.) The introduction of new technologies, such as Flash Media and Holographic represent new directions that are enlivening the marketplace and making users think about alternatives to hard disk drives, especially in critical program or commercials play-out applications, where crashes would be particularly dire.

10.) Yes, it’s an election year and an Olympics year and that will be helpful to sales.

Possible Impediments To Growth:

Despite the strength of the current server market, things are not entirely positive, when it comes to predicting the growth of server sales. Among the possible drags on the market to growth are:

1.) Declining prices – per channel – while a boon to end-users, represents a threat to the dollars per year valuation of the market even though they can act as a driver to the sale of more channels into the market. That means that the server business will become increasingly less profitable, even as it continues to grow in terms of channels, and this may cause some suppliers to bail out.

2.) Saturation in some applications represents a continued threat to both healthy sales growth, overall, and the health of the future market. Companies focused on growth in singlet applications could find themselves painted into a corner. We will be curious to see how that plays out next year.

3.) Separate storage growth could impair the maximum growth of stand-alone servers. This has not been appreciable yet, but could become so.

4.) Recession: a sluggish economy (or any negative global events such as an expansion of the war(s), or terrorist activity) could become an obstacle to continued growth. The existing economy has been less than totally helpful to the current re-birth of servers. High priced oil and gas is another drag. Any downturn could slow the sector growth we have been enjoying, but off-setting that fear is the reality that we are seeing an early trend to higher spending in 2008 before the normal election year (2008) surge.

5.) Possible changes to the technology such as the introduction of totally software based systems that can run and interact with storage (this actually exists now) that might reduce the markets dependency on servers as the ‘brain’ of the operation.

6.) Arrival of Flash Chip-Based Servers. Toshiba and others introduced such technology, and now SeaChange is doing so. What that could mean? Clearly there are some downsides to the use of HDD technology, like crashes, and that could lead more customers to consider chip-based solutions despite the higher prices.

Table of Contents

Front Matter

• Introduction and General Overview
• Product Genres & Markets Surveyed

General

• Type of operation
• Size of operation/ Number of employees
• Leading applications as such: News, Web-Streaming, Sports, Documentary, Programs, Film, etc.
• Size of budget
• Budget increasing, decreasing or remaining the same (2007/2008)
• Size of revenues
• Revenues increasing, decreasing or remaining the same (2007/2008)
• Type of applications
• Extent of purchase authority
• Source of purchases
• Type of station or facility

Technology Trends

• Features most desired in new products
• Film versus digital percent
• Type of recording and storage utilized
• Maximum imaging, recording and storage capacity
• Departments responsible for equipment
• Workflow patterns
• Compression use
• Computer platforms used disk versus film
• Year of first system purchase
• Year of latest system purchase

Magazines, Trade Shows & Websites

• Trade magazines read and preferred
• Single most valued
• Trade shows attended and planned
• Single most valued
• Websites visited
• Websites most valued

Price $400USD.

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