emea trends in servers, storage, networking

ITCandor 2013 CBE Milan

European Trends In Servers And Storage

Martin Hingley, ITCandor

40th CBE Conference 2013, Milan


Agenda

• Market Insights – technology trends, market data, user spending

• What’s Happening – vertical integration, changes in OEM policies

• Market Expectations – hardware forecast, policy effects


Technology trends

• Physical product reselling is being replace with ‘virtual’ services

• Cloud services and risk of channel disintermediation

• Mainframe, Unix and x86 server mix

• Converged Infrastructure and Integrated Systems replace ‘industry standard’ components

• A shift in OEM policies threaten 3rd party maintainers in Europe


Server

x86 ratios increased after the Credit Crunch HP has a stronger lead in EMEA

There are 15M Servers installed in EMEA

Other 30.8%

Bull 5.0% Dell

13.8%

IBM 18.8%

HP 26.3%

<Q213 Total: €13.8B €0

€500

€1,000

€1,500

€2,000

€2,500

€3,000

Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

x86

RISC/Itanium

System z

EMEA Server Spending (€B) by Quarter 2008-2013


Storage

EMC leads, with NetApp catching Big Arrays in decline, Innovation growing

There are 3M storage arrays installed in EMEA

EMC 19.9%

NetApp 16.5%

HP 15.4%

IBM 12.8%

Other 27.1%

<Q213 Total: €6.3B €0

€500

€1,000

€1,500

€2,000

€2,500

Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 0

10k

20k

30k

40k

50k

60k

Revenue ($m)

Unit

EMEA Storage Spending (€B) and Units - 2008-2013


Enterprise Network

EMC maintains a substantial lead HP and others focus on Open standards

Other 39.3%

Cisco 40.4%

<Q213 Total: €14.0B

EMEA Network Spending (€B) by Quarter 2008-2013

€3,000

€3,500

€4,000



Data Centre spending by type

• 33.2% Hardware

• 6.1% Software (excluding tools and applications)

• 8.3% Services

• 5.0% Power/Cooling

• 47.4% Internal Staff

• Reducing internal spending is a key supplier strategy

• Hardware declines proportionately over time

Storage 9.7%

Networking 10.1%

Internal Staff 47.4%

Server 13.4%

World <Q213 Total: $289B


Vertical, Horizontal and Matrix Integration

• Vertical Integration was killed by anti-trust v IBM

• Horizontal Integration allowed more specialisation

• Matrix Integration involves Open designs and helping customers avoid lock-in


IBM Policy Changes

• Changes machine code licenses hotly contended by customers and 3rd party maintainers in Europe

• Covers System z, Power and Storage

• System x excluded

• Protects its IP strongly

• Successful against Turbo Hercules, Neon, T3 in 2011

• A strong move towards integrated systems with PureSystem

IBM EMEA System Revenues (€B) by Quarter 2008-2013

Traditionally strong 3rd party maintenance More software approaches

€0

€100

€200

€300

€400

€500

€600


System z

System x

Power

Network

Storage System


Oracle Policy Changes

• Sues Rimini Street in US for illegal software use

• Software maintenance has to be through a valid support contract

• EU held up Sun acquisition. Especially over MySQL and Open Source issues

• Is focusing on workload-optimised systems, rather than horizontal offerings

Sun had strong 3rd party maintenance Oracle is focused on solutions

Sun EMEA System Revenues (€B) by Quarter 2008-2013

€0

€50

€100

€150

€200

€250

€300

€350

€400


Sparc Server

Sun x86 Server

Storage System


Cisco Policy Changes

• Sparing – kit only valid if software bought from Cisco or authorised partner

• In EEC and Switzerland users can buy 2nd hand if from a Cisco (or authorised partner) supplied customer in the region

• License agreement does not transfer ownership

• Partners extensively upstream – NetApp, EMC, IBM, HDS, VMware

Fabric-based UCS launched in 2008 An integrated approach in servers

Cisco EMEA System Revenues (€B) by Quarter 2008-2013

€0

€200

€400

€600

€800

€1,000

€1,200

€1,400

€1,600

€1,800


Networking

Server


Data Centre spending forecast

Networking will slowly overtake servers Storage will eventually recover

€1,000

€1,500

€2,000

€2,500

€3,000

€3,500

€4,000

€4,500

2008 2009 2010 2011 2012 2013 2014 2018 2016 2017 2018

Networking

Storage

Server

EMEA Data Center Product Revenue (€B) Forecast by Quarter 2008-2018


The Effects of policy changes on the TAM

• Data Centre strategies focus on integration, virtualisation and the Cloud

• In servers x86 chips predominate, but not all are ‘industry standard’

• Suppliers help users cut down the 47% internal staff costs through automation

• Hardware will decline in favour of software and services

• Matrix Integration is a fundamental change in supplier strategy

• IBM, Cisco, Oracle and others are changing the concept of ownership through license agreements with users

• The hardware market will stay strong - €34B in 2013, €33B in 2018

• Despite potential help from the EU the TAM for 3rd party maintenance will be cut