Data centre tacking – Part 2

Data centre spend is high priority for many CIOs according to Gartner. Heather Wright gets some industry view on the state of play for the channel.

While Team New Zealand’s requirements were a little ‘unusual’ and very specific, they are indicative of more and more businesses needing to crunch serious data, and the increasing demand for data centres.

In fact, Matthew Boon, Gartner vice president and group team leader, says data centre hardware alone is forecast to be a $90 billion/year market now, and Gartner expects that to grow to $110 billion by 2017.

And that’s just hardware as it’s very difficult to factor in everything else associated with data centres, he says.

Boon says a global survey of CIOs shows infrastructure and data centre spend is now second on their list of priorities, with BI/analytics ranking number one, and mobile number three. Cloud comes in at number five with networking at six.

“And they’re all really intertwined.” Within the data centre arena, he says security is a top concern – in fact, it’s one of the top two areas of investments companies are looking to make with their data centre expenditure.

Private cloud is also proving an area of ‘high interest’, along with integrated, or converged, systems where servers, storage and networking are integrated into a single solution.

While it offers greater efficiencies and a more effective way of managing IT, it comes with an upfront cost and an impact on how data centres are built, powered and cooled – and how the channel needs to sell the offerings.

“If you look at the big vendors – HP, IBM, Oracle, Cisco – most are moving much more towards converged offerings,” says Boon.

“And for the channel, that has to be positioned differently to to the customer and there are different skill sets required to sell and support.”

He says there will be a lot more focus from vendors over 2014 in helping the channel – and vendors’ own sales people – to sell the offerings, saying through 2013 some vendors blamed poor results on poor sales execution, but he believes it was more a case of the channel and sales teams, ‘not being empowered to sell effectively’.

“If you’re used to selling infrastructure in the traditional way, when an organisation just needs servers for applications or storage for data, with the move to converged infrastructure you clearly need skills to sell an overall solutions to data centre managers or CIOs. You have to sell much more broadly across the ecosystem,” Boon says.

“It’s not just about how to sell the technology. Many more CIOs are becoming much more business focused. They’re reporting to the CEOs much more and need to be able to show the linkage between the investment and the value it brings back to the business – how will this reduce customer response times etc, and bring real value to the business.”

Boon says while many in the channel are well aware of the need to align a sale with business benefits for the customer, many are ‘not doing it as effectively as they might’.

“Typically, the business value still comes back to return on investment – you’ll be spending X million and your return on investment will be in 12 to 18 months.

“I’m not seeing them getting down to the granular level and being able to say, we have examples where this investment reduced response times by five to eight seconds on average… and providing information like that, that the CIO can take back to the business.

“You’re not always going to be able to get as granular as that, but the discussion needs to be had as to what the business is trying to achieve – improved retention, more customers… – its pain points, and then you map the technology to that.”

Says Boon: “It’s really important to keep on top of the changes that are coming. We’re seeing some of the biggest changes in a long time in the way vendors are approaching infrastructure, with the likes of IBM exiting the x86 business.

“The channel needs to remain relevant in a much more commoditised environment, and to do that they need to offer a value proposition and ongoing services, and ensure they make IT relevant to the customer’s business issues.”

For Part 3 – check back to The Channel on Monday and for Part 1 – click here

This article was first published in the April issue of The Channel magazine – click here to subscribe

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