Understanding Major Refresh and Data Center Trends

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Understanding Major Refresh and Data Center Trends

The ability of your organization to adapt to changing market dynamics directly revolves around the capabilities of your data center. With that in mind – do you know how old your infrastructure is? Do you know where all of your network components are and what OS they’re running? What about your server farms – are they really doing everything they can to optimize your business?

There have been some big trends around the server market, demand around x86 systems, and new opportunities around data center growth.

According to the International Data Corporation (IDC Worldwide Quarterly Server Tracker , vendor revenue in the worldwide server market increased 5.1% year over year to $13.4 billion in the third quarter of 2015 (3Q15), the sixth consecutive quarter of year-over-year revenue growth. During this quarter, revenue grew in rack optimized, blade, and density-optimized servers, while towers declined. Worldwide server shipments totaled 2.49 million units in 3Q15, an increase of 4.5% when compared with the third quarter of 2014.

On a year-over-year basis, volume system revenue increased by 7.0% and high-end system demand increased by 1.2% in 3Q15 to $10.8 billion and $1.4 billion, respectively. The volume segment was aided by a continued expansion of x86-based hyper-scale datacenters coupled with enterprise and SMB refresh of x86-based platforms. Meanwhile, 3Q15 demand for midrange systems contracted by -5.8% year over year to $1.2 billion, as the x86 refresh appears to have run its course in this segment.

Similarly, consider these stats from the same report:

  • Demand for x86 servers improved again in 3Q15 with revenues increasing 7.1% year over year to $11.5 billion worldwide as unit shipments increased 4.5% to 2.47 million servers.
  • IDC sees opportunities for short term market growth related to the upcoming Microsoft SQL Server 2005 end of support on April 16, 2016; it’s estimated that approximately 800,000 servers globally still running SQL Server 2005.
  • The workload density (that is, workloads per physical server) for cloud data centers was 5.1 in 2014 and will grow to 8.4 by 2019. Comparatively, for traditional data centers, workload density was 2.0 in 2014 and will grow to 3.2 by 2019.
  • Workload density in private cloud data centers will continue to outpace that in public cloud data centers; the gap continues to narrow. In 2014, the average workloads per physical server in private data centers were more than 2x of those in public cloud. By 2019, this will decrease to 1.4 times.

With all of this in mind – organizations must look at their data center operations holistically. When it comes to working with data center, cloud and new deployment initiatives – there are three major IT priorities for IT to lead digital transformation in their respective organizations:

  • Better Data Center Systems Create Faster Innovation – New digital technologies help businesses to differentiate customer experience and re-define models quickly. Yet only 30% of digital projects will succeed [Cisco study]. This is partly because IT processes are slow and costly and new technologies are being developed faster than they can be adopted.
  • New Gear Helps Reduce Cost and complexity – Over time the network has grown complex and our customers are spending 2-3 times more on OpEx than CapEx, which is unsustainable in a digital world. Today, we’re seeing growing numbers of devices, apps, users, and threats — all impacting IT budgets and planning.
  • Hardware Refreshes and Optimized Data Centers Lower Risk and Meet Compliance – Mobility and cloud by definition increase the attack surface of business, there is no perimeter. And, it take 80 days to detect threats and even longer to remediate; while 60% of data is stolen in the first few hours.

If you’re working with systems simply because “they still work” — you’re potentially opening up your business to some serious problems. Not only could this cost you more money in the long run; this is also a serious security threat. At MTM, we understand the dynamic changes happening in the business world and how this impacts IT. Most of all, we help organizations understand their existing investments around the data center – and where there can be optimization. Reach out to MTM today to learn more about your own environment, and where new data center and digital technologies can revolutionize your business.

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