Hardware Deployment When Every Penny Counts: Experts Weigh In
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REDWOOD SHORES, Calif. -- In this time of economic downturn, with projects being delayed but not cancelled, it's important to have a coherent plan for where and when you can spend money, since every dollar saved goes to the bottom line.
That's the overall message from the many speakers at yesterday's Gartner Hardware Insight meeting, which discussed the research firm's findings across various hardware sectors. It's no secret that firms are delaying deployments, but how the pieces are being rearranged is what is important.
For starters, the forest, not the trees, needs to be the approach. The opening speaker, Gartner Fellow and Vice President Simon Hayward, noted that instead of viewing virtualization, cloud computing and green IT as three separate initiatives, they should be viewed as one due to their overlap.
That's also because the three have gained equal amounts of interest. In one survey, Gartner asked IT shops if the economy will cause them to increase their green IT initiatives in compute, file, print and storage technology. The percentage saying "yes" was between 25 and 30 percent across the board.
Also, spending plans in 2009 have been altered somewhat. Due to economic pressures, 40 percent of U.S. companies surveyed are increasing their virtualization efforts, 33 percent are increasing green efforts and 25 percent are accelerating the move to cloud computing. Worldwide, virtualization, green IT and cloud computing interest is up 36 percent, 30 percent and 18 percent, respectively.
No PCs this year
One area not selling in large numbers is PCs. Analyst Charles Smulders said this quarter would see the second consecutive quarter of shipment declines to 66.1 million units, a five percent year-over-year decline and an 11 percent decline from the first quarter.
Again, there is the opposite trend in desktops and laptops. Desktops are down 18 percent year over year, while mobile is up 10 percent year over year.
Gartner's projections are that PC sales will be down this year overall by 6.6 percent. In 2010, sales will recover to 11.7 percent growth and by 2011, sales will be up 15.2 percent. The one possible bright spot for this year would be in Q4 and the release of Windows 7.
"There will be some marketing dollars behind Windows 7, which will create some excitement in the market," said Smulders. "As we saw with Vista, consumers will ultimately decide, but the early buzz is good." He added it will take at least a year for IT firms to get through testing Windows 7, especially with so many skipping Vista and going straight from XP to Windows 7.
Spending is most definitely down. Analyst Angela McIntyre said that 54 percent of U.S. shops are decreasing their PC spending while only 21 percent are increasing it. What's more, they are getting thrifty. Currently, 60 percent of mobile PC sales are units under $800. By 2012, that will grow to 80 percent of sales.
Mini notebooks, or netbooks, are leveling off. They are expected to account for about 12 percent of total PC sales this year and only 15 percent next year. Although the low-cost PCs were meant with emerging markets in mind, McIntyre said more than 85 percent sold are in mature markets, where they serve as a second or third PC to the customer. Only 14 percent of netbook buyers are businesses, while 82 percent are consumers. The rest is the education market.
On the server side...
Analyst Jef Hewitt took to the podium to discuss the latest in server happenings. Blades continue to be the hottest form of servers due to their density and ability to reduce cabling, since the chassis handles what would otherwise require network connections.
Despite the hype around virtualization, Gartner found that most firms expect to take five years to virtualize all of their systems, and those that can't virtualize everything will go to a cloud outsourcer.
Gartner has found that migrations from Windows are most likely to be cancelled in this economic situation as people stick with Windows. Conversely, when the economy rebounds and budgets increase, migration to Windows applications will come back the fastest.
Unix and mainframe migrations will be postponed at best. This is where companies like IBM and Sun need to jump in to delay the inevitable. "Providers need to develop solid relationships with customers, and Unix and mainframe providers should act while there is a delay to reinvigorate their platforms. As we come out of this, virtualization will come to high priority, as will Windows migrations," he said.
One market not suffering is storage. Gartner projects a compound annual growth rate (CAGR) of 60 to 70 percent through 2012. At worst, it will only grow by 55 percent. Good news for market leader EMC (NYSE: EMC) as well as IBM and HP.
One reason is the weed-like growth of unstructured data, which accounts for 80 percent of all data, according to Gartner. Many users have to delay rolling out an application, which often use structured data like tables, because they don't have the storage resources.
Unstructured data includes digital content, compliance data, e-mail and user files and Web content, hence the size. Gartner found only eight percent of firms in emerging markets will postpone storage deployments and only 14 percent in mature markets, like the U.S., will hold off. The rest are spending as planned or increasing their spend.
But all that talk of solid state drives entering the enterprise? Don't bet on it, said analyst Stanley Zaffos. "SSD will not replace standard hard drives any time soon," he said. "When you are an order of magnitude more costly than a hard drive, even if your cost is falling faster than regular disk drives, it will take a long time before those two lines cross."
One technology that is making its way into the datacenter is Serial ATA, the same interface that's likely in your PC. For data that is not frequently accessed, the slower, 7,200 RPM SATA drives work just fine and don't require the faster fiber channel drives, which only have 300GB capacity. Using 1TB SATA drives means far fewer drives for the same capacity, and they consume less power.