Companies are exploring alternatives to traditional branded servers, according to a report released by analyst firm 451 Research this month. Budgets for traditional servers, as sold by the likes of IBM, HP and Dell, are under pressure said the report, called Voice of the Enterprise: Converged Infrastructure. Instead, new deployment models and technologies are in play.
About one-third of companies plan to decrease their spending on traditional branded x86 servers in the next 90 days, the report said. Commoditization in this space is encouraging companies to look around for alternative vendors.
One alternative to companies worried about hardware cost is to buy a server from an original design manufacturer (ODM). Also known as ‘white box’ servers, these offer similar computing capabilities as branded servers, but are often sold at a far lower price.
White boxes: a hyperscale phenomenon
Less than four per cent of companies have installed white box servers, and another six per cent are considering them, according to the report. This contrasts with IDC figures from March, which said that ODMs had 8.2 per cent of worldwide server revenue.
The disparity may be down to the dominant customer demographic for white box servers: the cloud service providers who run hyperscale datacenters. These companies account for almost a third of all infrastructure spend, and three in every ten of their infrastructure dollars were spent on ODM kit in Q4 2014. That represented an increase of 37.2% on the prior year. In short, they can’t get enough of these boxes.
This may also explain why Canada doesn’t use many of these boxes. The lower Canadian deployment rates are because so much of the hyperscale capacity is in the US.
“Outside of the larger scale usage of ODM boxes by Montreal’s OVH and trials among other hosters/service providers, Canada has far fewer deployments than our neighbours to the south,” warned David Senf, VP of infrastructure solutions and cloud at IDC.
“Shipments of x86 servers from firms outside the top server brands of Dell, HP, Lenovo and Cisco aren’t gaining as much traction in Canada due to lower mega data center buildout found in the US,” he continued. “Approximately 6% of our x86 server market is ODM vs. greater than 30 per cent of the US market.”
Traditional server vendors in Canada should be more worried about customers turning to public cloud services rather than competition from ODM direct server makers, he concluded.
Nikolay Yamakawa, senior analyst for converged infrastructure at 451 Research, said that cost is one of the big drivers for ODM servers, which often sell for far less than branded servers.
There are potential downsides to white box servers, though. One of the most common, outlined by an anonymous interviewee in the report, was support issues. Can customers buying white box servers be sure that they’ll get adequate support for the applications they’re running?
Support can be a particular issue when upgrading the operating systems and applications that run on servers. Trying to get BIOS and driver updates from white box server vendors may be a problem.
“Support is a roadblock, but for larger companies that may have that internal expertise, one would think that they’re more likely to consider white-label servers vs a smaller firm,” Yamakawa said.
Another alternative to traditional servers is converged systems, which are boxes integrating storage, computing, and networking with software in a single-vendor solution. These boxes often carry a cost premium, but are easier to configure, with a single number to call if problems arise.
Four out of 10 of companies interviewed by 451 are likely to increase their spend on converged systems, with only 8.7 per cent curbing spending, the report said. The top perceived benefit was ease of deployment and integration. Significantly, though, companies still felt that they needed staff with expertise in handling these plug-and-go boxes; 40.6% of firms cited lack of staff skills as a reason not to buy one.
451 interviewed around 16,000 IT professionals for is report. More than two-thirds were from North America, 57 per cent had more than 1000 employees, 12 per cent worked in government or education, and just over half of them had more than $1 billion in revenue. Respondents came from a variety of industries.