Thursday, October 22, 2015

What is Driving Server SAN Adoption?

Business Challenge 

Why are IT leaders so interested in server SAN solutions? Let's look at some of the challenges facing IT departments. Computer Economics reported that there was a nominal increase in IT budgets from 2.4% in 2014 to 3.0% in 2015, more companies are investing in information technology; but that doesn’t show the complete picture of IT investments.

IT Budget Change from Prior Year

When we look at the IT spend as a percentage of revenue, Computer Economics reports that it decreased in 2015 to 2.3%. Even though there was an uptick in IT budgets, the amount of IT spend as a percentage of revenue declined showing IT budgets are not keeping pace with company growth.

IT Spending as Percentage of Revenue

To illustrate the point further, there has been a steady decline of the total IT spend per user. In 2012 the average IT spend per user was $10,514.00 compared to todays $6,847.00. Companies are investing more in IT, but not at the same rapidity as corporate growth.

Total IT Spend per User

This places increased strain on the IT department to innovate because most of the IT budget goes to running the environment. According to the Gartner IT Key Data Metrics, only 14% of the IT budget is invested in transformation, while 67% of the IT spend is consumed by running and maintaining the existing environment.

Most IT Budgets Still Focus on Run

Business unit heads are expecting IT leadership to provide technology innovation to help drive corporate revenue and profits, however with only 14% of IT spend is funneled to transformation. CIOs and IT senior management are looking for new opportunities to focus on strategic innovation and getting out of the business of tactical maintenance and upgrades.

IT Growth and Staffing

Even though virtualization has brought a tremendous amount of cost savings, infrastructure flexibility, and increased application availability, it has also brought a substantial amount of growth due to ease of deployment.

Below is the growth of one of VMware’s customers in healthcare. They have increased from 400 virtual machines in December 2008 to 3,930 virtual machines in March of 2015. That is an 882% increase in virtual machine growth over the past 6 years. Like most organizations, staffing over that timeframe has remained flat, the number of virtual machines each engineer is supporting has grown from 51 virtual machines per engineer in 2009 to 623 virtual machines per engineer today. That is a staggering increase!

Customer Growth and Staffing

So why haven’t organization increased headcount? Even though IT leaders understand the strain being placed on internal IT, they don’t have the capital to invest on staff to support the infrastructure sprawl. According to Gartner IT Key Data Metrics, 40% of IT spend goes to personnel salaries and benefits. It is twice the amount of hardware and software combined.
IT Spending on Hardware, Software, Personnel and Outsourcing

Even though businesses have increased their application portfolio supporting business initiatives, there is no way to justify the headcount at even half the pace of infrastructure growth. This not only stifles innovation, it makes it so most corporations are in constant lifecycle management of their independent infrastructure elements (compute, storage, networking).

This is driving companies to look for new solutions.

Driving Toward Simple Solutions

With the enormous disconnect between the business expectation to become nimbler to foster corporate profitability and the trend to “Do More with Less”, an opportunity has taken root for new forms of infrastructure solutions to displace traditional approaches. IT leaders are looking for ways to reduce time, reduce risk, and reduce costs by getting out of the business of integrating systems. For over a decade, labor-intensive maintenance and upgrade procedures with disjointed management tools have drained IT staff productivity, which ends up driving up the cost of IT operations. Converged and hyper-converged solutions bring together server, storage, networking, and management resources into a pre-integrated system designed and optimized for the software-defined datacenter.

According to Gartner by 2018, 40% of midsize enterprises will replace all data center servers and storage with integrated systems.

In a recent poll, 62% of CIOs said their primary driver for adopting converged infrastructure was buying a pre-certified configuration and having all the components supported by a single vendor. They are looking for frictionless solutions, like mentioned above they don’t want to be in the business of integrating systems any longer. There is no strategic value in do it yourself (DIY) traditional deployments.

CIO Influence in Decision on Buying Converged Infrastructure

In fact, an IDC study on The Business Value of Converged Systems showed some startling statics on the benefits of moving to pre-integrated solutions.
  • 36% reduced IT infrastructure and IT infrastructure staff costs
  • 41% less IT time spent keeping the lights on
  •  338% more time spent on business enablement
  • 2.1% productivity increase
  • 55% faster application development life cycle
  • 4.4 times faster time to market for services and products
  • 2.4% higher revenue
Because of the current business challenges, the integrated server SAN market is about to blossom. IDC is predicting 68% compound annual growth rate by 2018. Traditional storage arrays are predicted to decline by 26.4%.

Integrated Server SAN Growth Rate

If you are interested in looking at sever SAN solutions, there are many different offerings ranging from software-define storage solutions like VMware Virtual SAN to complete converged solutions for software-defined datacenter. I highly recommend talking to your Value Added Reseller (VAR) or VMware Pre-Sales team to understand the product offerings.
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