Stock analyst Jim Cramer ruffled feathers in the IT industry Thursday with a prediction that the datacentre market was heading for a crash. Skip related content
Cramer said during Thursday's edition of his "Mad Money" television programme that new technology would allow companies to consolidate their datacentres and slow the cycle for replacing hardware. He cited Intel's latest line of Nehalem server chips in particular as an example of emerging technologies to shrink server volumes.
"All of these stocks are in the danger zone," Cramer was quoted as saying.
"I see an industry that is about to be brought low by new technology, so I think you should sell, sell, sell."
The comments were immediately seized upon by IT industry analysts, who issued a scathing review of Cramer's assessment and accused the analyst of being clueless about the nature of the server and datacentre industry.
Analyst Rich Miller laid into Cramer in a posting to his Data Center Knowledge blog. Miller noted that processor breakthroughs have been following Moore's Law for decades, and that along with the ongoing progress in processor and hardware design, companies are compiling more data than ever and requiring larger and more powerful datacentre systems.
"Nehalem processors will allow companies to do more with less, but theyre not going to empty out all the datacentres," Miller wrote.
"When it comes to datacentres, Jim Cramer is dumber than a bag of hammers."
Gartner analyst Lydia Leong echoed Miller's sentiments in a posting to her own company's blog. Leong in particular defended Equinix, at datacentre-hosting firm Cramer had singled out in his segment.
"Processing power has been increasing exponentially forever, but data center needs have grown even more quickly, certainly in the exponential-growth dot-com world, but even in the enterprise," she wrote.
"Theres no reason to believe that this next generation of chips changes that at all, and its certainly not backed up by survey data from enterprise buyers, much less rapidly-growing dot-coms."
