Is 3-tier technology dead?

Software
Disruption

Nutanix says incumbent vendors should be worried by the take-up of hyperconvergence

Innovation drives the IT market, but despite clear benefits, innovative technologies can be slow to catch on. Especially those likely to disrupt the revenue streams of incumbent vendors, not least hyperconverged infrastructure (HCI), long derided by vendors of traditional 3-tier solutions as somehow inferior.

The bad news for those vendors is that the momentum behind HCI is accelerating and having a noticeable impact on revenue streams already. Moreover, the market leaders are moving on from a pure convergence play to using HCI to bring the technologies and benefits of the public cloud into the enterprise datacentre, leaving the incumbents even further behind.

Server vendors, virtualisation vendors and storage guys are all struggling to maintain revenues as customers reach a new tipping point on the productivity curve for 3-tier. A tipping point where productivity gains and complexity costs have flipped over such that further investment in traditional technology has a negative result on the bottom line.

Datacentres

Not convinced? Neither are the incumbents. But consider this, the biggest datacentres in the world – those operated by Amazon, Facebook, Google et al – are all based on hyperconverged rather than traditional 3-tier architecture, due to the drastically lower operating costs and the fact that it is more scalable, more available, agile and easier to manage and, as a result, more productive. More than that, the same big vendors are offering access to their infrastructures as pay-as-you-go public cloud platforms like AWS and Microsoft Azure and, the once cautious, enterprise buyers are now lapping them up.

Consider too what the big 3-tier vendors have introduced in the last 5-10 years to address this trend. Answer – very little if anything at all, with a clear impact on the financial results of the vendors involved. Product sales are down across the board while maintenance renewals are up, making it abundantly clear that customers are not buying upgrades and not doing so because there are no obvious productivity gains to be had from sticking with 3-tier.

So what does this mean for a channel used to earning much of its income from helping customers deal with the complexity of 3-tier and what should they be doing instead?

Make no mistake, with 3-tier dead in the water revenues from services delivered around that technology will plummet with public cloud only adding further momentum to that demise. Don’t, however, assume that, because HCI alternatives are easier for customers to scale and manage themselves, they too pose a threat to service revenues.

Bridge to cloud

Hyperconvergence is about a lot more than simply merging compute, storage and networking resources. Done right it’s about delivering the scalability, availability and agility of public cloud services and delivering them in a format which customers can use to build their own enterprise cloud able to, seamlessly, bridge the on-premise to public cloud divide.

This is slowly dawning on the incumbents but few are doing much more than repackage traditional 3-tier technology into HCI-like platforms, typically, based on a single technology stack and requiring extensive customisation and further add-ons to integrate with public cloud platforms. So why wait for the big names to get on the hyperconvergence bandwagon when smaller, more agile, vendors are on it and moving the technology forward already?

While the incumbents are just starting to smell the HCI coffee others are reshaping the infrastructure market to push the productivity curve ever higher and the channel needs to be part of that process. The time for waiting is over, the channel needs to understand the way the market is changing, recognise the opportunity the enterprise cloud affords, grasp it with both hands and grasp it now.

Jan Ursi is senior director, EMEA, Channel & Service Providers, Nutanix
Jan Ursi is senior director, EMEA, Channel & Service Providers, Nutanix