Gartner recently published its first Magic Quadrant (MQ) for integrated systems, ranking 13 vendors by their technology innovation and their ability to execute on a long-term strategy.
Integrated systems are solutions comprising servers, storage and networking, tightly coupled and certified for performance as a single system. These systems are usually accompanied with management software and sometimes deployed in workload-specific fashions, such as Oracle's Exadata, but frequently just as general-purpose compute stacks for server consolidation, virtualisation, and so on.
Gartner included 13 vendors in its integrated systems MQ - Cisco-NetApp (as a technology alliance), Dell, Fujitsu, Hitachi, HP, Huawei, IBM, Nutanix, Oracle, SimpliVity, Teradata, Unisys, and VCE (the VMware/Cisco/EMC joint venture). Only three were positioned in the leaders' quadrant: VCE, Cisco-NetApp, and Oracle, despite the market growing rapidly. Gartner has conservatively estimated that integrated systems will account for around 10%-15% of data centre spend in 2015 - a healthy slice of a global $14.7 billion pie - and expects to see 50% year-on-year growth.
Faster adoption in SA
While the MQ and its accompanying research paper describe the integrated systems market in detail, SA is a different market. One major area where SA, and to a certain extent the rest of Africa, stands out is in adoption rate. Local adoption rates could far exceed Gartner's estimate of 10%-15% of data centre spend.
"We're seeing four times that rate," says Gary de Menezes, Regional Director Systems, Oracle South Africa. "About 40% of our data centre-related revenue is coming from integrated systems."
CIOs agree. One CIO at a major financial institution, who requested anonymity, said he expected 75% of his data centre investment to be on integrated systems. Mark Beekhuizen, IT and operations executive at investment firm Brait, went even further: "We are currently spending the majority - more than 90% - of our data centre spend on integrated systems."
And up through Africa, integrated systems could see even higher traction. "South Africa is an emerging economy, but a mature market," says Andy Butler, Gartner analyst and author of the integrated systems MQ. "But the great strength for integrated systems is in emerging markets, where there's not much legacy computing."
There's clearly a great deal of money being spent on these systems, but it is not evenly spread. The three top performers (VCE, Oracle, and Cisco-NetApp) in Gartner's MQ each control about a quarter of the market, Butler says, with the rest fighting over the remaining quarter. And in the user base, adoption is skewed towards early adopters who are much more heavily invested in such systems, with a long tail adopting a more cautious approach. South African CIOs can be particularly conservative, especially when budgets are tight, and "the most conservative buyers are the most resistant", says Butler.
Lingering concerns
Some key concerns linger for CIOs, notably the risk of being locked in to a single supplier. "Survey after survey says customers are very nervous about being tied to suppliers," Butler says. One such CIO is Herman Schouwink, IT executive at Paycorp. "I have not considered integrated systems for our coming new financial year," Schouwink said. "My key concern is really the impact of potentially deploying a 'silo technology' by going the one-vendor route. For me, it is more a wait and see right now as I don't think there is clear direction to enable a choice at the current rate of change in this space."
"I get asked the silo question more than any other," Oracle's De Menezes says, but notes that in many cases the fear is unfounded. "If you buy stacks based on open standards, you can rip out components and replace them with whatever you like." Doing so will lose some of the benefit of the integrated system, he says, but that's no different to building your own solution today.
Many more are simply taking a pragmatic approach: accepting lock-in as part of the infrastructure strategy and ensuring it does not pose a risk to the business. "You have to choose where you are locked in," agrees Butler, who notes that building (and testing, and certifying) your own custom stack can amount to being locked in to a proprietary stack - one of your own creation, but no less inflexible. "Integrated systems represent a rejection of that era."
While silos are a worry, interoperability is worse. Complex systems can be hampered by software glitches, conflicting updates, and small variations in implementation. Integrated systems attack that at the source, with vendors ensuring interoperability and certification for the stack, and every update.
"Lock-in is a concern, but it is overridden by having systems that are integrated and easier to manage operationally and scale better than current solutions," says Patrice Bouic, CTO at Discovery Holdings. Beekhuizen concurs: "We are not concerned, because we understand the lock-in. The lock-in is tied to a purchase cycle and we reassess all vendors at each cycle."
Forces of disruption
SA may also see disruption in the channel due to the rise of integrated systems. In markets where integrators have built their businesses around facilitating complex multi-vendor solutions, integrated systems pose a serious threat. "Big channel partners have built their businesses on integration, and all the vendors are challenging that business model," says De Menezes.
"We're actually seeing a big inhibitor in the local market from some of those businesses, and from vendors who aren't in integrated systems, encouraging IT departments to push back."
But, with healthy percentages of data centre spend moving to integrated systems, disruption seems inevitable. The only way out is up, De Menezes says: "The channel needs to move into middleware, BI [business intelligence], and business logic."
The disruption will not be limited to the channel. Procurement and depreciation cycles are being re-evaluated at businesses globally, says Butler. "Integrated systems change the rules for procurement. No one has really come to terms with that yet." Some IT departments may actively resist adopting integrated systems not because of any technical issues, but because it threatens the status quo. The consolidation of storage, networking and computing resources into a single managed stack is particularly challenging to large organisations where these skills have historically been separate; the evolution of converged voice and data saw similar political wrangling.
The vendors are also due some disruption, Butler says. "Most of the vendors are still approaching every sale as if it's the customer's first foray into integrated systems, but there are people out there with five-year-old deployments. We're pushing the vendors to move beyond that. For example, there are questions around how integrated systems will integrate with each other - no one has an answer for that yet."
New players
Most of the vendors in the integrated systems space are the established server providers, but a couple of new entrants have emerged as well. Nutanix and SimpliVity are carving out names for themselves as point solutions and hoping to establish a foothold from whence to attack the market more broadly. They face an uphill battle, says Butler. "Adopting a new player is very high risk until there are 'lighthouse' reference customers."
Both have established partnerships with local channels, and SimpliVity has appointed a country manager. Among CIOs, opinions seem divided, but some are actively considering the newcomers: "Both suppliers seem to be a more attractive solution then the current incumbents and they are both solutions that we are exploring right now," said Discovery's Bouic.
It's possible neither will remain independent for long. Nutanix is built around an innovative approach to storage which, if it delivers on its promise, is likely to be snapped up by one of the major firms. SimpliVity's CEO recently denied rumours the company was to be acquired by Hewlett Packard.
Although there is scope for new players to establish a niche, as Juniper once did to Cisco, the barriers to entry are high, and even higher in a remote geography like SA, with its entrenched incumbents and their market relationships.
Into the cloud
The future of integrated systems is unclear, but strong directions are emerging, Butler notes. One is into the cloud - integrated systems are frequently sold for use in private or hybrid cloud deployments, and workloads can "burst" into vendor clouds, with most of the big players building up their cloud capacity with that in mind.
Architecturally, integrated systems may look completely different in the near future too. Innovations like silicon photonics, offering very fast interconnect over many metres, could allow complete disaggregation of systems. "What we think of as integrated systems will look completely different in the future," Butler says.
There is also a strong trend towards "software-defined everything", he concludes. Software-defined networking (and in the telco space, network function virtualisation) is giving way to the notion of software-defined data centres, with competing solutions and standards emerging. The vendors are deadly serious about this - Cisco and VMware, although they partnered to create VCE, have fallen out over VMware's SDN relationship with Juniper. Products like HP's Moonshot are focused on this emerging segment - your data centre may be in for radical changes in the future, driven by integrated systems.
You can download the Gartner Magic Quadrant for integrated systems here.
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