HP's New Business Unit Highlights Demand for Converged Systems

 
 
By Jeffrey Burt  |  Posted 2013-05-03 Email Print this article Print
 
 
 
 
 
 
 

HP is creating a business unit that will focus on a small but growing part of the larger data center hardware market.

Hewlett-Packard's move to create a business group focusing on converged infrastructures is the latest proof point of the growing demand for such offerings as businesses look for improved performance, lower costs and easier deployment in their data centers.

HP officials announced April 29 that the company's Converged Systems unit will look to create purpose-built solutions for such areas as social, cloud, mobile and big data, and offer converged systems aimed at combining infrastructure resources, applications and productivity tools for such applications as Apache's Hadoop, SAP's Hana, and HP's Vertica and CloudSystem.

The new unit comes just over two months after HP expanded its converged infrastructure offerings with blade server, networking and storage offerings for such data center trends as cloud, mobility, big data and bring-your-own-device (BYOD), and rival VCE—a partnership between Cisco Systems, VMware and EMC—introduced midrange versions of its Vblock converged infrastructure offerings.

The new HP unit—which will be led by Tom Joyce, senior vice president and general manager of converged systems at HP—illustrates how important such all-in-one data center offerings have become to essentially all major systems makers. HP several years ago was among the first of the top vendors to offer a solution that merged server, storage, networking, virtualization and management software into a tightly integrated single solution. Now every top-tier hardware vendor—from IBM and Dell to Oracle and Hitachi Data Systems—sells a range of converged infrastructure offerings.

The trend also has upset old alliances and created new rivals. Networking giant Cisco, with its Unified Computing Systems (UCS), has now become a top server vendor, damaging what had been a strong partnership with HP. Meanwhile, VCE was created primarily to sell such converged solutions.

In their first analysis of the converged infrastructure space, Garner analysts in November 2012 noted that revenues in the market in 2011 totaled $2.9 billion, which accounted for only 3.5 percent of the $83 billion spent that year on servers, storage and networking hardware. Still, they said, there is a lot of upside for vendors.

"Given the current nascent level of the market, there is significant opportunity for overall segment growth, as well as competitive share growth for vendors that can deliver the right combination of technology offering and differentiation," the analysts wrote.

Zenoss, which makes monitoring and management software for IT infrastructures, in March released a study showing strong adoption and growing interest in converged systems. According to the company's 2013 State of Converged Infrastructure survey, more than 30 percent of respondents have adopted a converged infrastructure, with large enterprises being the highest adopters. Smaller businesses also are showing strong interest, according to the company.

"The promised benefits of Converged Infrastructure include business agility, improved service, and cost management," Chris Smith, Zenoss' chief marketing officer, said in a statement when the survey results were released. "Our survey shows that it's delivering on that promise."

More than 100,000 IT professionals were polled for the survey, which also found that 75 percent of the companies using converged infrastructures indicated that they were providing better services to customers. In addition, 55 percent of large companies—those with 5,000 or more employees—and half of small companies—one to 100 employees—either have deployed or are planning to deploy converged infrastructures. Nineteen percent of respondents said they have no interest in it.

The key business drivers behind the adoption and interest in converged infrastructures include reducing capital expenditures by improving utilization, improving business agility and gaining greater efficiencies, according to Zenoss' survey. The top technical driver was virtualization technology, with VMware accounting for 37 percent to 43 percent of deployments.

Forrester Research analyst Richard Fichera, in a Feb. 21 post on the firm's blog commenting on HP's enhanced converged systems offerings, noted that when he used to fly small planes, air traffic controllers used to warn pilots during times of poor weather by saying "EFC"—"expect further clearance."

"If I were forecasting the competitive weather in the core converged infrastructure and blade segment … I would steal the FAA's acronym and say that EFC now means 'Expect Further Competition,'" Fichera wrote. "With three dominant world-class system suppliers (and enough second-tier competition to avoid any chance of oligopolistic behavior) competing for the fastest growing segment of the x86 market, it will remain intensely competitive and richly rewarding to customers for the foreseeable future."

 
 
 
 
 
 
 
 
 
 
 
 
 

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