Tough Times Need Disruptive Technologies

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The recession is encouraging interest in ‘green’ IT, virtual servers and desktops, the growth of cloud computing and the rise of the netbook.

It may seem slightly ironic that enterprise infrastructure technologies are evolving to offer IT users and management more and more options at a time when they can probably least afford it. But analyst firm Gartner recently examined whether the impact of these developments will be felt by those in charge of the IT budget, and so, have the power to change the face of the average data centre and office.

“We’re starting to see indications that we’re getting to bottom of the downturn,” Matthew Boon, Gartner managing vice president told attendees of a Gartner briefing event last week. “There are still issues around shrinking IT budgets. But, while enterprises are certainly delaying or re-examining the value of IT projects, we’re still not hearing about cancelling projects.”

The initial knee-jerk reactions, slashing budgets in the face of economic uncertainty, are giving way to pre-emptive measures in readiness to capitalise on any prospective upturn, said Boon. He even suggested recent IT industry acquisitions showed technology firms were sharing the same pain as their customers: “Vendors are reducing their R&D [research and development] expenditure, which leads to them looking outside their organisations for acquisition opportunities, like Oracle with Sun, and NetApp and EMC with Data Domain.”

Likewise, he added: “Users are looking for shorter IT investment cycles of typically three years, where IT is expected to be aligned to business processes and articulate its return on investment [ROI] to the business more clearly than ever. This is because competitiveness is more critical than ever. Retaining customers, improving process efficiency and the customer experience are all areas being looked at.”

In fact, figures from a recent worldwide user survey on “The Impact of the Financial Crisis on Large Enterprises” revealed UK respondents were even more cost conscious than their global counterparts. Reducing operational costs was named the number one driver of IT investment among some 70 per cent in every country polled, but the UK was some 5 per cent more sensitive to this factor.

Cost cutting is the only driver UK respondents rated more important than their worldwide counterparts on average; every other area, including improving operational efficiency, employee productivity and customer service, as well as increasing profits, was on average rated more important worldwide compared to UK responses according to this Gartner survey. So, with cost so high up the IT investment agenda, Boon argued: “The UK is a fairly mature market, with a stronger focus of the business side of things. It’s not about reducing the cost of IT, it’s about reducing the cost of the business.”

Three techs to save the company

The technologies most meeting the demand from enterprises to do more with less are cloud, virtualisation and green IT, where the benefits of one could help drive adoption of the others, Boon suggested. Nearly a quarter (24 per cent) of the same UK user respondents to the analyst’s Financial Crisis survey said they were planning to increase spending on more energy efficient technology in 2009 and even more (29 per cent) said the same for cloud computing. But just over half (53 per cent) of large UK organisations said they would increase spending on virtualisation in 2009.

The current focus on server virtualisation bears out Gartner’s research, as organisations seek out greater energy and cost efficiency, application performance, data availability and security in their data centres. “The downturn acts as a catalyst,” said Adrian O’Connell, Gartner principal research analyst. And with the appetite for more efficient server utilisation offered through virtualisation growing, he added: “We’re moving from discrete blade server farms in a chassis with a fixed I/O to a data centre in a rack, with virtualised I/O and integrated compute, storage, memory and I/O, and data centre modules with pre-configured zones.”

Alongside the power-hungry data centre, O’Connell said the insatiable demand for data storage was growing storage capacity shipments at a compound annual growth rate (CAGR) of between 60 and 70 per cent. At the same time, “enterprises just aren’t buying a lot of PCs at the moment,” Ranjit Atwal, Gartner principal analyst pointed out, so much so that 44 per cent of UK end users he surveyed about their client computing plans in 2009 said they were planning cut-backs. “But other alternatives to buying PCs are being developed,” he added.

Atwal said the rise of the netbook showed users were ready to embrace the benefits of hosted applications and desktop virtualisation. The decoupling of operating systems from applications and hardware, delivering tailored functionality to each user regardless of device was already becoming a reality. “And this centralising trend is also useful for data governance, compliance and disaster recovery issues, where 56 per cent said HVDs [hosted virtual desktops] would help with reducing costs,” he said.

“When these organisations are spending 30 per cent of their IT budgets on procuring and supporting their client computing estate,” it was no wonder Atwal urged, “they need to focus more on the end user than the device. We’ve never had a paradigm shift in the PC market – it’s about time”.