Enterprise infrastructure is gravitating toward higher scale, software-defined architectures and support for increasingly cloud-facing application workloads. This is putting pressure on IT budgets to trim their hardware costs and devise strategies in which commodity boxes can be swapped in and out of the data center with little or no disruption to data operations.
But does this mean commodity, “white box” hardware is the wave of the future? And should IT vendors take a hint and rid themselves of their proprietary platforms while they can?
HPE is starting to think so, at least for a part of its business model. The company announced recently that it will stop trying to sell commodity servers in bulk to hyperscale providers like Amazon and Microsoft. The company has been reporting flagging sales for some time, most notably due to the pullback in orders from a single customer, which was rumored to be Microsoft. Instead, HPE will focus on higher-end specialty servers, hyperconverged infrastructure and targeted network and storage systems.
It’s hard to tell at this point whether this is a good move or a bad move for HPE. On the one hand, commodity hardware is a high-volume, low-margin business, which means you have to work a whole lot harder and put up a significant upfront invest to make a buck. On the other hand, higher-end devices generate higher profits per unit, but are more difficult to sell. Further complicating matters is the expectation that the commodity business is on a growth trajectory as more enterprises move workloads to the cloud. RNR Research pegs the white-box server market at $14.43 billion by 2022, up from a mere $4.6 billion in 2015.
And this trend is affecting more than just servers. According to IDC, sales of software-defined storage (SDS) will hit $16.2 billion in 2021, reflecting a compound annual growth rate of 13.5 percent. The firm says this will come at the expense of traditional storage infrastructure based on hardware-centric, dual-controller storage arrays. As new platforms make it easier to virtualize hardware environments without all the fuss of buying, deploying and provisioning actual hardware, the need for integrated data solutions will go down, not up.
But if this is so, then why are traditional IT vendors clinging to hardware, especially since software produces healthy margins without the need to acquire expensive components, manage supply channels and leave yourself vulnerable to the ups and downs of raw materials markets? At the moment, some are pursuing strategies that align their platforms with top cloud architectures in order to grab share of the rising hybrid ecosystem. Dell EMC is taking this tack with its Azure Stack solution that is now available on the newest PowerEdge server. By offering the ability to create a fully compatible Azure environment on its hardware, the company provides a quick and easy way to integrate local infrastructure with Microsoft’s hyperscale cloud, all while allowing the enterprise to maintain a hardware footprint that is consistent with their legacy data center environments.
It’s important to note, of course, that Dell EMC is not the only vendor offering the Azure Stack. HPE and Lenovo are also on board, and there is no reason why someone couldn’t deploy it on a commodity solution as well – that is, provided they can achieve the economy of scale to make the integration process worthwhile.
In the short term, then, it seems that vendors will be able to leverage existing hardware a bit longer. But ultimately, it’s hard to see how traditional server, storage or networking infrastructure will fare either in the data center or the cloud. Increasingly commoditized, hyperconverged infrastructure is cheaper to deploy, easier to maintain, and capable of providing the resource flexibility required of next-generation applications and services.
IT has long been distinguished as the keeper of hot, noisy and overly complex data center infrastructure. The new model will feature sleek, quiet and highly economical hardware capable of supporting a vast array of targeted software environments, and there will be few use cases that require these two worlds to be cemented together.
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.
