Spend on datacentre hardware is reducing as adoption of virtualisation, hyper-convergence and public cloud technologies increase, according to Technology Business Research’s (TBR’s) latest Data Center Benchmark report.
The company’s research revealed that datacentre hardware suppliers reported a 4.3% year-on-year drop in revenue during the second quarter of 2016, and experienced a 5.4% fall in gross profit. Alongside this, the study showed profits on industry-standard servers (ISS) during Q2 were up 39.8% year-on-year, with sales of software-defined networking tools also increasing.
Krista Macomber, senior datacentre analyst at TBR, explained that many businesses are now turning towards hyperconverged technologies over traditional servers, as the former tend to be faster to deploy and easier to configure. She said: “At a quickening pace, customers are embracing software-defined functionality and service-based delivery for business-critical workloads and datacentre consolidation initiatives.”
The changing way that customers use datacentres is being driven by customer demand for more flexible and cost-effective IT strategies. This shift is disrupting the datacentre market, with cloud adoption forcing many datacentre hardware suppliers to rethink their business strategies.
Macomber emphasised that those companies who do not move with their customers would run into difficulty. She added: “For mainstream hardware suppliers, this shift necessitates business model evolutions that are equally as radical to remain relevant.”