Evaluate server virtualisation tools now. That was the overall recommendation of Andy Butler, vice president of analyst firm Gartner Group, at an HP media event in Grenoble this month.

Server virtualisation tools enable a single computer to run several operating systems simultaneously.

Butler suggested that server virtualisation tools would reduce hardware costs and increase the utilisation of individual servers.

The recommendation was all the more striking because the HP event was organised primarily to publicise its latest Itanium-based servers rather than server virtualisation technology.

"Virtualisation is the single biggest thing that will happen in the server market over the coming two to five years," said Butler.

Server virtualisation will become increasingly important to data centre operations because processors such as Intel's Xeon 32bit chips are now so powerful that it is extremely unlikely that a single application would fully utilise them, except during periods of exceptional loads, such as the Christmas peak for online shopping systems.

By 2008, server utilisation rates could improve from 25 per cent on average today, to more than 40 per cent on average thanks to virtualisation tools, according to Butler.

"Consequently virtualisation will dampen firms' demand for server hardware. The vendor that gets this [technology] right will be the leader in the server market in five years' time," he said.

The analyst also predicted that by 2008 clusters of virtualised servers would significantly erode the market for standalone SMP server systems.

However, Lee Bonham, HP's director of IT consolidation, warned that there are still challenges ahead before virtualisation can flourish.

Currently, many software vendors do not support their products if customers run them on virtualised server systems. Consequently firms must replicate faults on traditional server hardware to obtain technical support from their suppliers.

Similarly, commercial software licences are currently focused on traditional server hardware, and would normally require firms to buy a licence for the peak number of processors, even if virtualisation tools meant that the software was rarely used with so many processors.

Butler also cautioned firms about buying rack-mounted blade servers. "The lack of standards means that people who invest in blades are effectively locked into their choice of hardware supplier," he said.