Data Center Upgrades Demand Attention Now

School is out for summer, but it's time for IT executives to hit the books to prepare for a 2011 data center refresh that delivers cost savings enabled by virtualization and flatter architectures with lower latency.

By Tim Greene
Sun, June 20, 2010

Network World — School is out for summer, but it's time for IT executives to hit the books to prepare for a 2011 data center refresh that will deliver cost savings enabled by virtualization and flatter architectures with lower latency.

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Enterprises need to tap major data center infrastructure vendors, not necessarily to choose one but to hear what they propose and determine how their proposals align with the needs of the company, says Tom Nolle, president of tech consulting firm CIMI Corp.

"The 2011 data center refresh will be the most complicated thing ever attempted by enterprises," Nolle says. Reading specific proposals from data center vendors is the best way for decision makers to educate themselves about the real architecture issues, he says. So far, education is lacking.

Based on CIMI Corp. surveys, general ignorance about data center issues is high. Ideally, technology literacy should be identical whether a business has a related project underway or not, Nolle says. That way, potential customers are informed even if they have no immediate need for the technology.

But in the case of data centers, there is a 70% difference in literacy between those who have no ongoing data center projects and those who do, he says. So businesses just beginning to plan data center projects have a steep learning curve, especially if they plan to make a purchase near-term.

"That means you're flying by the seat of your pants, and the decision-making process will be stressful," Nolle says. "That's a tough position to be in when management is demanding success and ROI."

However, the urgency to make decisions may not be as great as Nolle projects, suggests Zeus Kerravala, an analyst with the Yankee Group. Redesigning and building virtualized data centers are major projects that warrant time spent choosing the right alternative. Mainstream adoption might not occur until 2012 or 2013, he says, giving more time for consideration while the technology matures. "It needs to be proven that it works, and that's a big leap of faith right now," he says.

One indicator of customer commitment to data center upgrades is what they spend on data center switches, says Matthias Machowinski, an analyst with Infonetics. Sales of data center switches worldwide were $3.2 billion in 2009 and are projected to be $3.7 billion this year. The average growth from 2009 to 2014 is expected to be 10% per year.

That may not seem like extraordinary growth, but during the same time period, the price of 10Gbps ports are expected to drop, so total revenue growth registers a lower rate than growth in numbers of ports, Machowinski says. Infonetics projects 8 million 10Gbps ports will ship in 2010 and 14 million in 2014.

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