Four disruptive factors, including cloud dominance, datacentre competition, market fragmentation and changing economic dynamics, will dramatically reshape the datacentre market by 2016, research firm Gartner has predicted.
These disruptive factors will change the opportunities and risks in the datacentre market in the next three to four years, it added.
"Elements of them are already in play, and will become visible in 2016, but radical action by just one significant player could accelerate the market disruption of any of the factors,” said Joe Skorupa, vice-president and distinguished analyst at Gartner.
The existing expectations around datacentre industry are unlikely to be realised because they rely heavily on traditional enterprise IT users, and a supplier community that supports the status quo, rather than introduce risk and break the enterprise IT mold, Gartner warned.
“Increasing market pressures are driving a change in supplier behaviours, which, along with the four disruptive factors, make the market ripe for a period of major disruption," said Skorupa. "These behaviors will become more obvious as the pace of change increases."
Gartner has segregated the datacentre providers as "protectors", "evolutionary disrupters" and "revolutionary disruptors". Protectors defend their market share, revenue, profit margins and large installed base. Evolutionary disrupters disrupt the protectors, but try to protect their own business. And revolutionary disrupters have more-nimble business models and simpler go-to-market strategies.
One disruptive force, the dominance of cloud providers, could bring an end to traditional datacentre providers, the analyst said.
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New application development and deployment is moving from in-house to cloud-first, he said. This is influencing the expectations around new internal applications that require more flexible, distributed and hybrid IT.
The software as a service (SaaS) and cloud-first approach to new, high-growth workloads means that growth in infrastructure hardware is generally aligned to webscale architectures.
While workloads may not run more efficiently in the cloud, providers ensure excess capacity is used, in some cases, at lower prices to secure highest utilisation and, therefore, highest monetary return for the provider, said Skorupa. This will impact traditional datacentre demand.
He also warned that traditional managed service providers (MSPs) and infrastructure providers are failing to deliver compelling alternatives to cloud services from Amazon, Google, IBM, Microsoft and Baidu. As traditional suppliers find it hard to compete, their growth is estimated to slowdown.
In today's datacentre infrastructure market, there are numerous potentially disruptive technologies, including software-defined networking (SDN) and software-defined storage, network function virtualization, micro-processor technologies and webscale-integrated infrastructure.
With buyers looking for efficiency, there is potentially enormous latent demand for the improvements these disruptive technologies could bring, according to Gartner.
Another disruptive factor Gartner outlined was the market fragmentation driven by the Prism revelations. “As buyers come to believe that none of the large multinational providers are trustworthy, emphasis shifts to in-country-developed technologies, OSS and hardware,” Skorupa said.
The analyst firm is seeing a resurgence of small, local assemblers, substantially increasing the proportion of sales by white-box suppliers. These small assemblers would be unable to fully replace the economies of scale of the traditional large suppliers, but open-source hardware ecosystems will help them overcome this.
“Intel and AMD should see erosion as mobile and light-medium workload processors shift to ARM and other architectures,” he said.