Where To Next For Systems Infrastructure Vendors?

Vendors of branded systems infrastructure hardware are reaching two major inflection points. First, system architectures are increasingly being sold as converged infrastructure (CI) that packages servers, storage, networking and infrastructure software into a single solution. Second, in order to gain agility, enterprises move away from on-premise solutions and increasingly adopt as-a-service infrastructure (IaaS) deployment options that are delivering more elasticity.

Systems Infrastructure vendors (e.g. IBM, EMC, Cisco, Dell, HP and others) have been selling on-premise systems (e.g. servers, storage, networks) to enterprises for donkey’s years. But with enterprises increasingly buying IaaS services from the likes of Amazon and Rackspace they are now looking to sell more infrastructure to IaaS players. Many are copying Cisco’s first move into this new area with its Unified Computing System and are starting to market CI gear towards hosting and IaaS providers. Some are also strategically positioning to become IaaS players themselves. But will they succeed? There are some hurdles on the way.

Three market plays emerge in the near future for infrastructure hardware vendors (click Figure above to enlarge): selling on-premise systems to enterprises, selling on-premise systems to Independent IaaS players, or selling IaaS services to both.

In the enterprise on-premise market, the key challenges will be to:

  • remain relevant to those parts of the enterprise markets that are not moving to IaaS
  • deal with internal enterprise politics that would inhibit a move towards CI
  • create orchestration and delivery value rather than pure capacity and compute
  • create appstores and capstores (e.g. hybrid clouds that buy extra Amazon or infrastructure vendor branded capacity) that promote and increase the value of your CI through providing API connections to the external world and the InterCloud.

A Cap Store or Capstore is a online store embedded in or linked to on-premise infrastructure. It sells extra or burst compute and store capacity and links on-premise infrastructure to the InterCloud.

In the independent IaaS player market, the key challenges will be to:

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