Server Virtualization Holding Pattern Leading to Cloud Stall

Expect to see IT organizations hold back a bit over the next 6-12 months as they weigh their options and contemplate adapting IT strategy.

The macro IT market is experiencing an extended evaluation and research period for IT organizations that is resulting in a dip in action for vendors.

Server virtualization has been one of the hottest technologies to hit IT in years, and as a result, companies like VMware, its technology partners, and go to market channel have enjoyed sales pipelines full of activity and a healthy revenue stream. The physical to virtual transition has been the ideal pivot point for vendors to inject themselves into consolidation initiatives and cost reduction strategies, as well as provide customers simply with a better way to do IT.

BUT, virtualization has created a holding pattern for IT that is placing some IT vendors at risk. The reality is that the majority of sever virtualization initiatives have been consolidation and cost containment driven. Add to this the fact that what once was a single horse hypervisor race has completely transitioned to even playing grounds and has been complemented by the introduction of reliable and affordable public cloud services.

IT has transitioned from the pile of gear in the data center to a virtualized environment that now has a pile of storage it didn't necessarily expect or plan for. So, yes, while certain management and administrative tasks have been simplified, other processes have become more complex and costly. This has resulted in turning an eye and ear towards public cloud capacity. I think you see where I am going.

Now we have the situation in which server virtualization is acting as a holding pattern. The majority of companies have virtualized their easy workloads and many have targeted the next tier. This is all well and good, and while virtualization continues to generate efficiency and performance benefits, the question remains: is there a better alternative? It is looking more and more like there MAY be with public cloud services, but businesses are still researching, evaluating, dipping their toes in, and just starting to think about getting comfortable with this new consumption model.

If my theory holds true and IT is vectored to a virtualization holding pattern (many with whom I speak already are) wherein IT sits back for a period of time and evaluates its cloud options, this will have a massive impact to IT vendors, their resellers, and an emerging set of IT powerhouses. IT spending will likely go through a flat period before transitioning to alternative consumption models.

What will be interesting to see is what comes of the IT vendor stalwarts-those that had such great success with the meteoric rise of sever virtualization-and whether they can adapt and continue their success with this new wave of adoption and rapid rate of change. VMware is bouncing up against market saturation and Microsoft is going through a major organizational change, while a company that sells books (Amazon) has become a focal point of IT strategy. By the way, the hardware infrastructure that runs mega clouds such as Amazon and Azure look nothing like tradditional server, networking and storage hardware. This will certainly have an impact with the tradditional IT infrastructure hardware vendors.......likely quicker than they are anticipating.

Expect to see IT organizations hold back a bit over the next 6-12 months as they weigh their options and contemplate adapting IT strategy. They will still spend where they need to on hardware to support existing and planned growth, but any new initiatives such as application upgrades or big data moves will be stalled as IT organizations reconsider their long term strategy and analyze their options closely before fully opening up their wallets.

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