A Rift At The High-End For Server Requirements?

We have been repeatedly reminded that the requirements of hyper-scale cloud properties are different from those of the mainstream enterprise, but I am now beginning to suspect that the top strata of the traditional enterprise may be leaning in the same direction. This suspicion has been triggered by the combination of a recent day in NY visiting I&O groups in a handful of very large companies and a number of unrelated client interactions.

The pattern that I see developing is one of “haves” versus “have nots” in terms of their ability to execute on their technology vision with internal resources. The “haves” are the traditional large sophisticated corporations, with a high concentration in financial services. They have sophisticated IT groups, are capable fo writing extremely complex systems management and operations software, and typically own and manage 10,000 servers or more. The have nots are the ones with more modest skills and abilities, who may own 1000s of servers, but tend to be less advanced than the core FSI companies in terms of their ability to integrate and optimize their infrastructure.

The divergence in requirements comes from what they expect and want from their primary system vendors. The have nots are companies who understand their limitations and are looking for help form their vendors in the form of converged infrastructures, new virtualization management tools, and deeper integration of management software to automate operational tasks, These are people who buy HP c-Class, Cisco UCS, for example, and then add vendor-supplied and ISV management and automation tools on top of them in an attempt to control complexity and costs. They are willing to accept deeper vendor lock-in in exchange for the benefits of the advanced capabilities.

The haves, on the other hand, are getting increasingly impatient with what they perceive as attempts by their major suppliers to burden them with expensive and proprietary software which they are then locked in to. They repeatedly report resisting the vendor’s blandishments to install this software and integrate it into their operations, preferring to use their own stripped down management software, or lower capability standard products. This group, some of whom were members of a group I talked to last year, sees their server requirements looking more and more like the web/could providers – simple, cheap and de-featured compared to the enterprise servers they have consumed in the past. Several of them are pushing back against blade and even dense hybrid systems like iDataPlex and HP SL-series, on the theory that they can get the ultimate price/performance with very de-featured rack servers plus their own management software. Even their systems management requirements, in an era of extensive virtualization, are described as becoming increasingly minimalist, with requirements as simple as system discovery and the ability to turn them on and off and attempt a reboot.

What does this mean for vendors and other I&O groups? For I&O groups in the have nots, there is no impact. Vendors will continue to offer rich and increasingly capable advanced CI products that will deliver value to these organizations, and vendors will make money while customers prosper. In the top ranks of the “haves”, which in combination with the emerging cloud demand could account for as much as 20-25% of server requirements in a few years, the message for vendors is much more ambiguous. If you are supplying systems to these users, you may have to reverse years of a cultural bias toward ever more complex (and higher margin) products an increase your focus on no-frills systems, the sort that you have only been supplying on special bid basis for cloud providers up until now. If you don’t, you risk these users increasingly going to off-brand suppliers and/or possibly going directly to the same Asian manufacturers that you currently use.

I’m really interested in comments/reactions to this? Am I nuts, or are those really giant bats flying around my office?