Home servers may render CD racks obsolete

By Antony Bruno

DENVER (Billboard) - Converting to a fully digitized entertainment library is a good way to cut down on clutter in the house. So what replaces the CD rack once you do?

The 500 GB hard drive that comes standard on most home computers today? Soon, even that won't be big enough to store and organize the massive amount of digital music, video and photography that consumers are accumulating as part of the emerging "terabyte lifestyle."

That opens the door to a new market, one that for now remains a niche afterthought to most people: home servers.

Most digital media today is stored on an individual computer and then synched to one device or another or streamed through a home network to an entertainment system or other appliance. The drawback with such a system is that all files will be lost should the hard drive crash, and it's very difficult to synchronize files across multiple computers, devices and users without overlap.

By contrast, a home server acts as a central storage hub for all the content in the home, and multiple devices can link to it in order to stream or otherwise access music, video or other content. A home server will even automatically backup and reconcile content stored on any connected device. And servers are far less prone to crashes.

The home server market is currently all potential, with only an estimated 400,000 U.S. households employing one today, according to multiple analyst reports, dominated primarily by tech enthusiasts and IT pros installing them in their homes.

But Forrester Research projects the U.S. market will grow to more than 4.5 million households by 2012, while the Diffusion Group predicts it surging to as high as 21.5 million in all of North America by 2015.

Driving this growth, of course, is digital content. It's hard to measure just how much content is now stored on home computers, but based on reported activity, it's certainly on the rise. A Forrester Research survey shows that the number of people viewing or managing photos on their computers rose from 26% of survey respondents in 2002 to 47% in 2007. The percentage of those owning an MP3 player went from 3% to 36% during the same time frame.