Within the trend towards ‘build yourself’ to a ‘buy’ model, businesses are looking at next generation solutions beyond converged infrastructure. Read on for a detailed analysis and a note of caution for channels
By Amit Singh
The converged infrastructure (CI)/ integrated systems market appears to be in a state of explosive growth, which not only is strong but also one that will be sustained well into the future. This development capitalizes on the simple reason that enterprises are now moving from the ‘build yourself’ to a ‘buy’ model and are comfortable to adopt pre-tested and readymade solutions. They are not willing to take chances with the compatibility of the system, which is strengthening the CI market and beyond.
IDC estimates the worldwide CI market to grow to $17.9 billion in 2018, with 15 percent of the IT hardware (server, external storage, and networking) to be sold as part of an integrated system by 2018. “As enterprises look to modernize their IT infrastructure and eliminate complexities, converged and hyper-converged infrastructure systems (HCIS) are expected to witness increased adoption in the coming months,” says Rajeev Mittal, VP-Systems, Oracle India.
More coming its way
Analyst firm Gartner indicates that an average of 20 percent of organizations augmenting storage capacities in India are actively considering integrated systems.
Industry experts are witnessing increased traction from BFSI, telecom, IT/ITES and commercial mid-market companies. Vendors have observed large success in the IT/ITES space because of huge amounts of VDI deployment. Also, lot of demand is coming from retail and manufacturing.
Wherever the scale is big and the customer is looking for tried and tested solution, it opts for traditional converged infrastructure, also called integrated infrastructure systems. “Hence, it is witnessing high growth due to sheer size of the solutions and high acceptance among wide range of customers. Integrated stack system, on the other hand, is a lower growth area due to limited application for specific workloads, for instance Oracle Exadata and Exalogic,” explains Anshuman Rai, Director Sales, Converged Platform & Solutions Division, Dell EMC.
Similarly, integrated reference architectures are now limited to particular set of software solutions. “With reference architecture, customers have limited choice but to go with the architecture suggested by the software vendor. For example, in case of Oracle software or SAP HANA, customer has to go with the suggested architecture; hence, the market is limited,” describes Mehul Doshi, Country Manager, Datacenter Solutions, Fujitsu.
However, HCIS is witnessing highest rate of adoption due to benefits like software-defined approach and higher scalability. HCIS therefore is naturally suited to be the underlying infrastructure for SDDC technologies. Notably, many of the cloud automation and VDI solutions are being implemented on HCIS.
HCIS is the way forward
Hyper convergence is disrupting the integrated systems market, as organizations are rethinking their datacenter strategies with bigger focus on cloud, mobility and analytics.
As per Gartner, approximately 30 percent of the global storage array capacity installed in enterprise datacenters will be deployed on software-defined storage (SDS) or HCIS architectures based on x86 hardware systems by 2019, up from less than 5 percent in 2016.
Further, 20 percent of mission-critical applications currently deployed on 3-tier IT infrastructure will transition to HCISs by 2020.
“Today’s datacenters are not capable to scale as per business demands due to traditional 3-tier architecture which is acting as a barrier. Increased acceptance of software-defined everything is pushing the adoption of HCIS like never before,” asserts Dileep Nadimpalli, Associate Research Manager, Storage, IDC India.
In fact, HCIS continued to be the fastest growing segment by far, growing 64.7 percent year on year globally, as per IDC. The analyst firm’s research shows that for the Asia-Pacific & Japan (APJ) region, the HCIS segment grew 111 percent year on year for the first quarter of 2017, more than doubling revenue from the same period a year ago.
Customers are looking at next generation solutions beyond CI, which not only consolidate their infrastructure and optimize efficiencies, but can also do a lot more than what they were doing until yesterday, adds Raghuram Krishnan, Director, Partners/ Alliances, Hitachi Data Systems, India.
Growing usage of virtualization including server virtualization and VDI, and rising concern of data protection and disaster recovery solutions are further expected to add to the growth of HCIS market.
HCIS brings the same design constructs used by the large cloud providers and fundamentally transforms how IT and services are deployed. Silos within the datacenters can be eliminated and specialized skills are not required to deploy and manage different aspects of the datacenter.
“We have seen all kinds of workloads moving to HCIS – from mission-critical applications, big data applications, messaging to collaboration. In fact, over 50 percent of workloads which are getting deployed on Nutanix HCIS fall under the business-critical category,” affirms Prabu Rambadran, Director, Product and Integrated Marketing, Nutanix.
One needs to be virtualized before investing in HCIS and the workloads suitable would be—VDI, server virtualization, big data and communication applications. “If someone has a huge database, where there is a need to scale up, then CI will be better. For smaller databases, it makes sense to go for HCIS. Moreover, enterprise workloads like SQL server, Sharepoint, messaging and disaster recovery are being automated through hyper-convergence,”Krithiwas Neelakantan, Director, NGDC Business, NetApp India.
With HCIS, cost savings start right from deployment in terms of significantly less time-to-market. “Moreover you save on space and power with lesser number of systems running. Customers can benefit with at least 30 percent lower TCO over a period of 3-5 years as compared to traditional 3-tier systems,” discloses Rai of Dell EMC.
Further, according to a recent IDC study commissioned by Nutanix, customers have seen 60 percent lower TCO with HCIS in comparison to legacy infrastructure. “Additionally, there were 97 percent fewer unplanned incidents. The 5-year ROI was over 534 percent, with the investment paid back in just 7 months,” affirms Rambadran of Nutanix.
Moreover, large saving happens on human resources. Converged systems adoption impacts the TCO in terms of human resources as a single individual can manage all the compute, storage and networking, while traditional 3-tier architecture requires 3 separate resources. That way, customers can save large spending on skilled resources. For mid-sized organizations with small IT team, HCIS is a boon.
“In addition, IT resources would spend less time on operational stuff such as monitoring, provisioning, etc. and can utilize this time on innovations. Converged systems would enable organizations to take new products and services faster to the market,” states Neelakantan of NetApp.
Until now big data, cloud, Internet of things (IoT) and analytics have hogged the limelight. But moving forward, converged and hyper-converged infrastructure is another area that will see a lot of action.
However, it will necessitate channel partners to salvage their margins as few allege that CI and HCIS are commoditizing the datacenter space. “Margins on hardware is the story of past. What matters is the skills and value-addition that partners offer. Hence, commoditization will not affect our businesses till we understand customer pain points and offer CI and HCIS as a solution and not a commodity,” shares Vipul Datta, CEO, Futuresoft Solutions.
Though 10-15 percent costlier than traditional 3-tier architecture, CI and HCIS prove to be highly affordable in terms of TCO, which is exciting the customers. Partners can bank upon the trend through skills around solution designing, implementation, software solutions and managed services, concludes L Ashok, CEO, Futurenet Technologies.
In the meantime, vendors are also bolstering their prowess with partnerships and acquisitions. “Most recent acquisition in this space was HPE acquiring Simplivity (HCI vendor). We expect the market to further consolidate and would be driven by 3-4 major players especially in hyper converged infrastructure space,” foresees Nadimpalli of IDC.