It appears that enterprise hardware is doing quite well, thank you very much, despite the much ballyhooed rise of software-defined cloud computing infrastructure.
According to IDC’s most recent Worldwide Quarterly Tracker, sales of servers, switches and routers are all in the black, with servers in particular showing the best results in more than a year. While the report shows stronger performance for ODM servers versus stalwarts like HP and Dell, results were positive nearly across the board. The only anomalies were IBM, down nearly 33 percent, and Lenovo, up more than 550 percent, which is undoubtedly the result of the transfer of the IBM server line to Lenovo.
Ethernet switches saw more muted gains of just over 1 percent, but it is an indication that the enterprise is not scaling back purchasing just yet amid all the talk of software-defined networking. Routers, meanwhile, jumped 11.5 percent, which represents in part an 8.3 percent gain in enterprise sales and 7.7 percent for the service market.
This is in stark contrast to the enterprise storage market, mind you, which IDC says is clearly heading to the cloud. In the latest quarter, sales of hyperscale storage infrastructure by ODMs to large buyers like Google and Facebook were up more than 25 percent to nearly $1 billion, while the overall storage industry gained a mere 2 percent to about $8.8 billion. The fastest-growing segment is the standard x86 storage server, which saw a 10 percent gain, while traditional SANs saw a 4 percent drop, with much of the data management functionality moving to the broader virtualization layer – a trend that is expected to accelerate for the rest of the decade.
This is primarily why companies like Dell and HP are moving toward integrated hyperscale architectures while keeping their hands in traditional hardware platforms. Long-time enterprise vendors have to do a tricky dance for the next five years or so by embracing the new while not completely shelving the old before its time. Ultimately, the expectation is that even enterprises that choose to maintain data infrastructure in-house, which should include most medium to large organizations, will want to leverage hyperscale for hyper converged infrastructure. This provides an equivalent or even expanded data-handling capability in a smaller, more efficient and more easily managed hardware footprint.
Beyond the data center, of course, the biggest change is happening on the client side as knowledge workers continue to favor mobile devices over the PC. It’s a trend that IDC says will continue to at least 2017 when new software (Windows 10), new processors (Skylake) and new streamlined models (PC/tablets) start to make their mark. For the record, though, the company predicts the PC market will increase only a fraction of a percent by the end of the decade, from 281.6 million unit sales in 2015 to 282.1 million by 2019.
Reading the tea leaves of hardware sales and deployments has never been an exact science, of course, so the relative health of the server and switch markets could merely be the gasp before a general shift to hosted, cloud-based infrastructure. But such a change is not likely to occur within the next five years or so – more likely over the next decade.
In the meantime, the enterprise data center is actually in a pretty good position, hardware-wise, with plenty of options on the table for crafting next-generation architectures even as the supply of legacy systems remains abundant.
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.