A lot of people are keenly interested in the future of data hardware markets, for good reason. The lifeblood of the IT industry has long been the deployment of sophisticated hardware platforms packed with advanced software, but that cozy little business model is under increasing pressure and everyone from top vendors to channel providers to independent consultants and integrators are scrambling to fit into the new world of software-defined infrastructure.
So it is probably comforting – small comfort, perhaps, but comforting nonetheless – that, so far at least, the precipitous decline in enterprise hardware spending has not materialized, even though the form and function of that hardware is changing.
According to the latest report from 451 Research, 2016 is shaping up to be a banner year for hardware, as both converged infrastructure (CI) solutions and traditional storage and server deployments contribute to a major overhaul of the data center. The company reports that 60 percent of the enterprise industry is planning to increase spending on servers in the coming year, with nearly a third aiming for a major refresh, while nearly 80 percent are looking to boost their reliance on CI and even more ambitious hyper-converged solutions. But the largesse from all this activity is not expected to benefit the vendor community equally. Cisco had the largest share of customers planning for an upgrade, while HP, IBM and Oracle customers were more muted in their expectations.
Compared to other categories of enterprise hardware, in fact, servers and networking systems are among the few showing any growth at all. Synergy Research Group tabulated performance across a number of infrastructure segments over the last few quarters and found that while voice systems, UC platforms, telepresence and other communications functions were on the decline, data center servers and switches were on the upswing. Again, Cisco holds the lead in networking and communications systems, while HPE is tops in servers and is the only vendor who has a reasonable expectation of supplanting Cisco. However, the rise of cloud, hosted and collaborative solutions is contributing to a healthy market for start-ups and is causing market boundaries to blur even further.
It is fair to say, though, that in terms of forward-looking enterprise trends like Big Data and the IoT, converged infrastructure will represent a significant growth area. When scale and flexibility are top requirements, streamlined, modular hardware will inevitably prove essential in both cloud and enterprise data centers. As Biz Tech’s Calvin Hennick notes, not only does CI support the kinds of sensor-driven, analytics-heavy workloads that Big Data/IoT engenders, it can be deployed and integrated much more easily than traditional infrastructure, and it provides substantial scalability on a small footprint. The only question is whether to deploy a pre-integrated vendor solution from a legacy vendor like Cisco or HPE, or to pursue a pure-software approach atop commodity hardware.
The question is whether all of this will coalesce this year, or we’re looking at a long-term, more gradual transition. According to Nigel Moulton of VCE, an EMC subsidiary that specializes in converged infrastructure, hyperscale is for real and will start to constitute the bulk of IT spending within the coming year. Moulton points to research from IDC that has 70 percent of new storage deployments and 50 percent of compute technology going to hyperscale data centers by 2017. By 2018, the number of CPU cores will exceed the number of people living on planet Earth by 10-fold, thanks in large part to the rapid expansion of hyperscale infrastructure. Going forward, expect these numbers to double every year.
It seems clear, then, that the data hardware market is alive and well and shows every sign of continued health into the future. The enterprise itself may start to dial back its consumption of actual infrastructure in favor of cloud and co-hosted solutions, but the demand for services is likely to increase, which means somewhere, somehow, there will be a box that enables the delivery of that service.
Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.