Where To Next For Systems Infrastructure Vendors?

Vendors of branded systems infrastructure hardware are reaching two major inflection points. First, system architectures are increasingly being sold as converged infrastructure (CI) that packages servers, storage, networking and infrastructure software into a single solution. Second, in order to gain agility, enterprises move away from on-premise solutions and increasingly adopt as-a-service infrastructure (IaaS) deployment options that are delivering more elasticity.

Systems Infrastructure vendors (e.g. IBM, EMC, Cisco, Dell, HP and others) have been selling on-premise systems (e.g. servers, storage, networks) to enterprises for donkey’s years. But with enterprises increasingly buying IaaS services from the likes of Amazon and Rackspace they are now looking to sell more infrastructure to IaaS players. Many are copying Cisco’s first move into this new area with its Unified Computing System and are starting to market CI gear towards hosting and IaaS providers. Some are also strategically positioning to become IaaS players themselves. But will they succeed? There are some hurdles on the way.

Three market plays emerge in the near future for infrastructure hardware vendors (click Figure above to enlarge): selling on-premise systems to enterprises, selling on-premise systems to Independent IaaS players, or selling IaaS services to both.

In the enterprise on-premise market, the key challenges will be to:

remain relevant to those parts of the enterprise markets that are not moving to IaaS
deal with internal enterprise politics that would inhibit a move towards CI
create orchestration and delivery value rather than pure capacity and compute
create appstores and capstores (e.g. hybrid clouds that buy extra Amazon or infrastructure vendor branded capacity) that promote and increase the value of your CI through providing API connections to the external world and the InterCloud.

A Cap Store or Capstore is a online store embedded in or linked to on-premise infrastructure. It sells extra or burst compute and store capacity and links on-premise infrastructure to the InterCloud.

In the independent IaaS player market, the key challenges will be to:

deal with independent IaaS players that buy non-branded infrastructure and build their own CI
find and sign the appropriate partners to bring on-premise ISVs to the cloud on your branded infrastructure
create orchestration and delivery value rather than pure capacity and compute
create appstores and capstores that promote and increase the value of your customers IaaS through providing API connections to the external world and the InterCloud.

In becoming an IaaS provider, the key challenge will be to:

not alienate your independent IaaS customers by competing with them for enterprise business
making sure you sell value-added IaaS rather than commodity store and compute: IBM’s smart cloud for Philips or Dell’s vertical health care cloud are some examples.
create orchestration and delivery value rather than pure capacity and compute
create appstores and capstores that promote and increase the value of your IaaS through providing API connections to the external world and the InterCloud.

Infrastructure hardware vendors will have to decide whether they want to remain server, storage and networking vendors or move to a converged infrastructure architecture. If they want to remain point product vendors they will have to make sure their “secret sauce” is compelling enough. They also have to make sure they align with CI vendors and orchestration vendors in order to get their point product to work into a larger infrastructure play.

Infrastructure hardware vendors will also have to decide which one (or all) of the three markets mentioned above they will want to serve. At the METISfiles we will continue to watch out for strategic moves from the likes of IBM, Cisco, EMC, Dell, HP and others that will show how they are positioning in the emerging infrastructure markets.

The Future Of Converged Infrastructure And Integrated Systems

ITCandor and The METISfiles have announced a joint multi-client study on the future of converged infrastructure and integrated systems. We will define, size and look at the success factors for converged infrastructure vendors, differentiating these from earlier styles of systems. Our findings will be based on a detailed analysis of the main system contenders, including, but not limited to the ones mentioned above.

We propose a combination of expert interviews with both vendors and users, augmented with desk research and expert analysis. This will deliver three reports, containing vendor competitive analysis, user wants and needs, and market share, size and forecast respectively.

To download our prospectus, click here – The Future Of Converged Infrastructure And Integrated Systems.

Please contact us if you’re a supplier who’d like to sponsor the study or user who’d like to contribute to our survey: