The company says its supplies scale out systems where the deployment of large numbers of relatively inexpensive, modular servers and storage systems are used for computing applications that historically required more expensive proprietary minicomputer, mainframe or supercomputer systems.
Milpitas, California-based Rackable boasts that its Foundation Series servers offer approximately twice the server or processor density of traditional rack-mount systems and provide a range of power and heat management techniques that enable servers to operate effectively at high density levels.
In August 2004, it introduced its Scale Out Series of servers, designed to further increase density levels. The company also offers storage systems, which use many of its core server technologies.
Rackable says it has sold products to over 100 customers, including Microsoft, nVidia, Oracle, WebEx and Yahoo! It is expanding at an enormous rate with revenue in the nine months to September 30 of $86.8m, up from $25.3m.
But costs are also increasing rapidly and in the same period it posted a net loss of $41.1m, little improved on the loss of $42.4m recorded a year earlier.
Rackable is up against most of the heavy hitters in the server market and lists its main competitors as Dell Inc, Hewlett-Packard Co, IBM Corp, Sun Microsystems Inc. In the storage market it tussles for business against EMC Corp, Hewlett-Packard, Hitachi Data Systems Ltd. and Network Appliance Inc.
The company is dependant on a small number of customers and says that in the nine to September 30, 2004, Microsoft accounted for 42% of its sales and Yahoo! for a further 18%.
Rackable bases its products on standard components such as processors from Intel and AMD and operating systems such as Linux and Windows. It quotes analysts IDC as estimating that the Linux and Windows-based x86 server market will grow from $18.4bn in 2003 to $28.6bn in 2008.
Within that category, IDC estimates that the market for Linux-based servers will grow from $3.3bn in 2003 to $9.1bn in 2008 while Windows-based servers will grow from $15.6bn in 2003 to $23.4bn in 2008.
The forecast that drives Rackable is IDC’s forecasts that the blade server market will grow from $622m in 2003 to $8.8bn in 2008, a compounded annual growth rate of 70%.
Equally, it aims to cash in on the growth in storage that will accompany this. Rackable says that as storage requirements have grown, enterprises have increasingly turned to lower-cost data storage systems that use Linux or Windows operating systems and low-cost disk drives.
It quotes an estimate that high-capacity, low-cost disk storage systems generated $1.2bn of revenue in 2003, and will grow to $9.7bn by 2008, representing a compounded annual growth rate of 53.8%. By 2008, IDC reckons that 50% of all storage capacity shipped will be based on high-capacity, low-cost disk drives.
While Rackable is up against well-established players, it believes it has advantages over competitors. It offers a remote management solution where server farms can be run from any network-connected off-site location.
It says its server and storage lines include design innovations to reduce power consumption. It also offers DC power options to enable higher overall power efficiency compared with individual server-level AC power supplies.
