Underlying Hardware Insignificance

On the following years, important server manufacturers will grave a great deal of trouble when marking their own strengths and failures of the competence.

In just a couple of years Data Center customers won’t be paying attention to the underlying hardware of Cloud Computing services such as IaaS or PaaS. This irrelevance or insignificance factor will come up with winners and losers, the latter being easier to identify:

1) When bought by a competitor.

2) When announcing their retreat from server manufacturing.

Whether the looser is going to be Dell, HP or IBM, no one can say today. But the more customer stop asking for a Dell/HP/IBM server for their Private Cloud and the less Data Center Providers cling to a specific technology (as it tends to) the only difference will be cost.

Cost and consequent MRC/NRC (monthly recurrent cost & non-recurring cost) will define which servers to buy.

Some server manufacturers are delivering OEM virtualization licenses together with equipment as a way to leverage the sale. But with the upcoming of licensing agreements for Service Providers, there will come a time when buying OEM licenses won’t be so convenient.

It won’t matter in the future if a server manufacturer does I&D or not, or whether if they were the first in the industry to provide energy efficient servers, because all of them will be the same. There won’t be any real difference talking about hardware and the marketing strategy for Data Center Providers in the future will avoid talking about the underlying hardware of shared environments like IaaS.

On the same way the customers aren’t requiring an EMC or HDS Storage but 15K RPM HDs, it’s just a matter of time customer stop asking for a specific server vendor.

From the Data Center Provider point of view, it isn’t really strategic to marry a hardware vendor for multitenant platforms since commercial conditions may change out of the blue and suddenly expose the Data Center Provider with a non-rentable business.

The underlying hardware irrelevance trend is the reason why server vendors are developing strategic alliances with virtualization hypervisors. It is also the reason why they are developing Data Center Deployment software oriented to Cloud Services. If server vendors fail to develop Data Center Managing software which really makes it worth to buy their hardware, all of them (but maybe two) are doomed.

Another alternative for server manufacturer is not only sell hardware but also services, like Hosting or Housing. IBM is the leader in this subject since they provide almost all the chain of required services: hardware, software, professional services and so on. But, IBM lacks a very important requirement: telecommunications. It isn’t really clear by now if this will strengthen or weaken IBM in the future.

What I am sure about is that Data Center & Telecommunications providers have a nice chance to make the difference. They will be able to negotiate with hardware vendors the best price for multitenant platforms and by means of License Agreements for Service Providers they will be able to provide everything necessary for a high-end Data Center Solution: network, hardware, software, professional services, etc.

As a conclusion, market trends for Cloud Computing indicate a significant change in the Data Center consumer insight. Customers will tend to jump into Public Clouds instead of deploying Private Clouds (which are more expensive by the way). By having more demand on multitenant platforms, customers won’t be able to decide upon hardware specifics and as a consequence they will grant a very important tool for Data Center Providers to leverage their business.

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