Converged IT Market To Benefit from ‘Refresh’ Projects
As datacenter managers seek to harmonize computing, storage and networking infrastructure, a market watcher forecasts that enterprise investments in this converged infrastructure along with servers will jump during the coming year.
Nearly 80 percent of enterprises surveyed by 451 Research said they expect to increase spending on converged infrastructure in 2016. The market researcher also found that 60 percent of respondents expected to increase spending this year for servers while about one-third said they expect to invest in a "major server and storage refresh project."
As datacenter infrastructure converges, so too does the IT industry that supplies servers, storage systems and networking capabilities. The proposed merger of storage giant EMC Corp. with server giant Dell is expected to shape infrastructure purchasing patterns this year, 451 Research said.
For example, the industry survey found that the former cloud computing vendor VCE, now EMC Converged Platforms Division (NYSE: EMC), stands to benefit from the shift to converged infrastructure. Seventy-eight percent of the EMC unit's customers said they expect to increase spending this year, including 32 percent who plan to spend more than $2 million this year to upgrade servers and storage.
Another wrinkle in the storage market is a planned initial public offering by startup Nutanix, San Jose, Calif. According to reports, the server and storage specialist could be valued at more than $2.5 billion. It announced plans to proceed with an IPO just before the holidays.
"We see a sea change in the industry with Dell’s acquisition of EMC/VCE, and Nutanix filing for [an] IPO," Nikolay Yamakawa, a senior analyst at 451 Research, noted in a statement releasing the server and storage survey findings. "These shifts are putting a spotlight on converged infrastructure and providing IT buyers with more options."
Meanwhile, storage industry consolidation around emerging technologies like flash arrays could also provide more options in the midst of what 451 Research dubbed "technology refresh projects." A case in point is last month's deal by infrastructure specialist Pivot3 to acquire flash array startup NexGen Storage Inc., Louisville, Colo.
Pivot3, Austin, Texas, claimed the NexGen acquisition would augment its "dynamic hyper-convergence" approach. The deal would allow it to offer hybrid and all-flash storage in both appliance and blade forms, helping it to usher in the first generation of software-defined datacenters.
Also benefitting from the server and storage-spending spree is Cisco Systems (NASDAQ: CSCO). The market survey found that 70 percent of Cisco's customers plan to increase spending for its servers. Buy contrast, more Hewlett Packard Enterprise (NYSE: HPE), IBM (NYSE: IBM) and Oracle Corp. (NYSE: ORCL) customers said they expect to cut IT spending this year.
The market watcher noted that most converged infrastructure vendors get a foot in the door through enterprise technology refresh projects, "especially a server refresh."
More than 780 enterprises based in Europe and North America participating in the converged infrastructure survey, 451 Research said.
