Published on September 30, 2014
TBR TECH N O LO GY BU SIN ES S RESEARCH , IN C. Sept. 30, 2014 Hyperscale Servers Ride Cloud Momentum into the Enterprise
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Hyperscale Servers Ride Cloud Momentum Christian Perry Senior Analyst and Content Manager, Data Center Email: firstname.lastname@example.org Twitter: @ITwriter 2
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Enterprise IT challenges are driving customers to seek alternatives to traditional infrastructure, but adoption challenges remain 3 • Enterprise IT customers are seeking infrastructure alternatives. • Early enterprise-level adopters of hyperscale servers have plans to accelerate future adoption. • Challenges remain for hyperscale server vendors to improve the customer experience. Hyperscale Servers Ride Cloud Momentum
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. TBR Position Competition will quickly rise in this market as cloud-driven computing concepts trickle into the enterprise market. TBR estimates a $1.7 billion U.S. addressable market in the next 12 months for hyperscale servers among organizations with 500 or more employees. Hyperscale server vendors will follow the influence of cloud into enterprise data centers to tap a $1.7B U.S. market The Situation The advent of cloud computing continues to shape the market for IT infrastructure. As customers gain more experience with public cloud offerings such as IaaS, they increasingly seek similar cloudlike benefits in their environments. The Change Customers running cloud — and other — workloads are beginning to replace a portion of their traditional servers with hyperscale variants that are more power-efficient and easier to manage at scale. Just as organizations deploy private clouds to obtain an on-premises cloud experience, data centers are deploying hyperscale servers to obtain a cloud experience on the hardware end via easily added and managed capacity at potentially lower cost. Cloud Enterprise 4 Hyperscale Servers Ride Cloud Momentum
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Cloud workloads are sparking an IT infrastructure transformation as data centers look to cut costs across large server deployments Today’s data centers increasingly run cloud-driven workloads. Cloud data centers recognize traditional bulky, power-hungry server architecture is not cost-efficient. Hyperscale server vendors deliver infrastructure that is simple to manage, easy to scale and efficient from power and cost perspectives. This drives sales of hyperscale server infrastructure into cloud data centers and enterprise data centers looking to cut physical infrastructure costs and reduce complexity. Hyperscale Servers Ride Cloud Momentum 5
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Enterprise customers are seeking highly scalable server architecture and prompting server OEMs to adjust their business models to meet demand Enterprise customers are changing the early hyperscale landscape and creating opportunity for server OEMs outside of the cloud service provider market. HYPERSCALE SERVER ECOSYSTEM SCALE SIMPLICITY POWER SAVINGS FLEXIBILITY Massive server deployments create requirements for custom designs that save on space, power and TCO. CHOICE Enterprise customers want new server architecture that is easy to purchase, deploy, scale and manage. SHARED BENEFITS Hyperscale Servers Ride Cloud Momentum 6
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Custom The rigid requirements of cloud-scale data centers created a massive market for custom hyperscale servers, delivered by providers such as Dell DCS, Quanta and Wistron (and now HP, with its newly formed joint venture with Foxconn). These engagements will remain tied to massive cloud deployments in service providers and a handful of very large enterprises that run workloads with cloudlike attributes. Off-the-shelf Concepts borne in cloud environments, including low-power, simplified physical designs and streamlined management, are infused into off-the-shelf server designs from Dell, HP and IBM. Although these products are technically appropriate for cloud-scale data centers, they represent the base on which server vendors will penetrate enterprise data centers and displace traditional x86 servers. Unlike most traditional x86 server infrastructure, hyperscale customers can choose between custom and off-the-shelf server products Primary target: Cloud Secondary target: Enterprise Primary target: Enterprise Secondary target: Cloud Hyperscale Servers Ride Cloud Momentum 7
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. • Compared with other attributes, purchase price and total cost of ownership are not fully matching customer expectations. • Hyperscale servers have a market perception as cloud-only products. Enterprise customers may not see the value for their environments. • Some adopters think they could have received roughly the same benefits from their existing x86 architectures. Barriers to adoption • Develop case studies that show real-world value for hyperscale servers. Customers need proof that the deployments will save them money. • Illustrate the value of delivering services in hyperscale deployments. This is a key differentiator for server OEMs, and it boosts overall value. • Customers are willing to replace traditional x86 servers with hyperscale servers. Develop strong use cases for those replacement opportunities. Messaging to unlock opportunity Moving ahead, hyperscale server vendors can unlock market opportunity by showing real-world value across cloud and enterprise environments 8 Hyperscale Servers Ride Cloud Momentum
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Although customers are generally satisfied with hyperscale performance, opportunity remains for vendors to match expectations By and large, hyperscale server customers are satisfied with the performance of workloads on the architectures they purchase. However, primary workload targets such as cloud hosting do not receive the same satisfaction as other workloads, such as storage. As the cloud hosting market expands, vendors have an opportunity to better meet customer requirements to gain market share. 9 Hyperscale Servers Ride Cloud Momentum
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Customers are open to adopting ARM-based hyperscale servers 10 Hyperscale Servers Ride Cloud Momentum 7% 51% 23% 5% 15% 0% 10% 20% 30% 40% 50% 60% Extremely likely Somewhat likely Somewhat unlikely Extremely unlikely Not sure Likelihood to Purchase ARM-based Hyperscale Servers n=74 SOURCE: TBR HYPERSCALE SERVER LANDSCAPE, MAY 2014 • TBR anticipates ARM-based hyperscale servers will play a role in the market later in 2014 as HP, Dell and SeaMicro increasingly release ARM-based products. • TBR believes adoption of ARM-based servers will pick up as more software is designed to work with ARM processors. • In turn, this will allow for a smoother migration from x86 to ARM and enable organizations to reduce IT complexities as well as generate cost savings from lower-power chips.
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Hyperscale customers plan to increase adoption 11 Hyperscale Servers Ride Cloud Momentum • Over the next two years, 30% of respondents expect to purchase more hyperscale servers than in previous years, while only 16% plan to purchase more blade, rack or tower than purchased in previous years. • TBR believes this reflects growing demand for hyperscale servers at the expense of demand for traditional x86 servers, reflected by 29% or more of respondents indicating they would purchase fewer traditional servers over the next two years. 9% 7% 6% 9% 30% 16% 16% 16% 43% 47% 42% 41% 19% 29% 36% 34% 0% 20% 40% 60% 80% 100% Hyperscale n=188 Blade n=153 Rack n=163 Tower n=146 Server Unit Purchase Expectations Over the Next Two Years Will buy fewer than previous years Will purchase about the same Will purchase more than previous years Not sure SOURCE: TBR HYPERSCALE SERVER LANDSCAPE, MAY 2014
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 12 Technology Business Research Inc. Hyperscale Servers Ride Cloud Momentum: Q&A Questions?
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. TBR regularly tracks alternative data center infrastructures through extensive customer research 13 • TBR’s Converged Infrastructure Global Landscape Report identifies current and future business opportunities for converged system vendors, based on more than 1,300 surveys of converged system owners. Supporting Research Studies • TBR’s Hyperscale Server Customer Landscape Report identifies current and future business opportunities for hyperscale server vendors, based on nearly 300 surveys of enterprise hyperscale server owners.
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. James McIlroy Vice President of Sales Email: email@example.com Telephone: 603.929.1166 14 Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research Hyperscale Servers Ride Cloud Momentum: Contact Information Christian Perry Senior Analyst and Content Manager, Data Center Email: firstname.lastname@example.org Twitter: @ITwriter Telephone: 603.758.1828
TBR TBR Quarterly Webinar Series | 9.30.14 | www.tbri.com | ©2014 Technology Business Research Inc. Computing Vendor Reports Benchmarks (Benchmark XLS data is also available) • Acer* • Apple • Asus* • Dell • EMC • Fujitsu • HP • IBM • Intel • Lenovo • NetApp • Samsung* • Computing Devices Benchmark • Data Center Benchmark Corporate IT Buying Behavior & Customer Satisfaction Studies • Desktops • Notebooks • Services & Support • x86-based Servers Computing Practice Syndicated Research Coverage TBR Computing Practice Syndicated Coverage *Semiannual Publication 15
TBR TECH N O LO GY BU SIN ES S RESEARCH , IN C. About TBR Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today. Contact Us 1.603.929.1166 email@example.com www.tbri.com 11 Merrill Drive Hampton, NH 03842 USA This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact ©Technology Business Research, Inc. for permission to reproduce.
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