Most corporate IT budgets are flat or are reflecting minimal annual increases. CIOs are being tasked with delivering more for less. That’s broadly the sum of it. “Deliver innovation and put IT to work to drive the top line, oh, and do it without increasing costs” is the message from the board. CIOs have never been more important to business but equally never been more exposed.
The promise of new consumption models for IT resources which favor the use of the Opex budget rather than the Capex budget is attractive for business leaders and it is no surprise that most companies are using some form of cloud based architectures for at least a part of their IT delivery.
The CIO has also to contend with other parts of the business procuring IT resources directly without consultation with his or her function, so called “shadow IT”, and it is a serious concern for them. Gartner estimates that by 2017 the Chief Marketing Officer will spend more on IT than the Chief Information Officer and IDC reckon Line of Businesses (LoBs) will control 40% of all IT budgets. If those predictions don’t give CIOs pause for thought, then I don’t know what will.
So what can the CIO do about it? Well, putting aside ensuring the close collaboration and co-operation between the IT function and the LoBs ( see this Forbes video in which NetApp’s Julie Parrish CMO and Cynthia Stoddard, CIO discuss best practice), a focus must be on reducing both complexity and cost in order to deliver functionality and innovation at a faster clip than before. CIOs are embracing this challenge in numerous ways.
One is to consider the use of converged or ‘integrated’ infrastructures.
The pre-packaging of compute, network and storage into a single rack, with validated designs for various workloads is an interesting and growing part of the IT infrastructure market. In fact, in a relatively low growth spend market for IT, converged infrastructures as a category are in realtive hyper growth. Gartner estimate a compound growth rate of 56% – which is significant in anyone’s book.
Why are CIOs spending more in this area than in most other segments? Well the appeal is obvious. Buying a single stack which is prevalidated can potentially cut out a lot of integration work and cost. Actually I think it is also a case that IT departments are seriously stretched these days and there are less and less of the integration skills available either in-house, or indeed affordably available on the open market. This makes the idea of the stack particualrly appealing, espescially where most of the heavy lifting has been done by the vendors.
Cisco & NetApp
NetApp recognised this trend nearly four years ago and began a relationship with Cisco to build a converged infrastrcuture stack. This became known as FlexPod and was a field-driven, engineering exercise that developed into a very powerful business. It emerged as a response to customer demand. It wasn’t the top brass at each of the companies coming together and investing billions to create a business. Rather it was an organic and flexible arrangement that grew at the pace the market wanted rather than the pace demanded by the C-levelers. The name FlexPod reflected the flexible nature of the configurations and the stack-line delivery model. To learn more about FlexPod, read John Rollason’s excellent post click here.
FlexPod – a growth story
Today Cisco and NetApp jointly announced that this organic business, featuring compute blades and networking from Cisco and storage and data management from NetApp has reached $3bn in sales since inception and is now at a $2bn annualized run rate. We have seen a lot of success in service providers with FlexPod, given its adaptability, scalability and some of its key architectural capabilities such as secure multi-tenancy, but also many major enterprises have invested in the architecture as a foundation for their cloud infrastructure initiatives. Given the trend towards cloud computing, especially hybrid clouds, the opportunity is only going to increase. In fact FlexPod is growing even faster than the converged infrastructure market as a whole.
Impressive as the numbers are, what I find fascinating is how quickly two behemoths of the IT industry can come together in partnership and from a standing start create a multi-billion dollar business in less than 4 years. Cisco have proven they can do this in the past with their UCS business, which has grown from a startup in 2009 to being the #1 in x86 blade servers in the US and #2 worldwide. When they announced UCS there was a collective quizzical response – “like the world needs another sever company, yeah right”. But they had some game-changing technology which also proved to be market-share changing as well. You can see the impact of UCS in the market in this infographic. Quite an achievement.
Personification of partnering
But doing it in partnership with another company is a different thing. It requires close collaboration, open minds and a focus on what matters most – the customer. In fact I think the history of FlexPod has largely been shaped by listening to customers and responding by delivering a flexible architecture and support for their chosen workloads. Cisco and NetApp together have had this in mind throughout the development and roll-out of FlexPod.
One of NetApp’s core differentiators over the years has always been its focus on deep relationships with its ecosystem partners and has had an open approach to partnering generally. In a way, FlexPod is the personification of those attributes. A deep relationship with Cisco, for mutual benefit, and strong partnerships with the higher stack ecosystem vendors, Microsoft, VMWare, SAP, Citrix, RedHat and so on.
So it is pleasing to see the growth rates of this part of the business. As we look to help CIOs transition from being the owner/operators of data centers to being the broker of IT services, FlexPod can be a major weapon in standing up IT resources with simplicity and flexibility.