Future IT Capacity Planning Depends On Flexibility

Transcription

1 A Custom Technology Adoption Profile Commissioned By HP July 2014 Future IT Capacity Planning Depends On Flexibility Introduction Businesses today depend more than ever on technology systems for both internal and external operations, relying on these resources to optimize business processes, enrich customer experiences, and grow revenue. While new digital services will bolster competitive differentiation, they will also accelerate demand for data center resources to host and deliver these services. Over the past decade, the proliferation of data center solutions from fully on-premises to colocation, hosting, and cloud has introduced more options for capacity expansion but has also directly increased the complexity of the decisions around these solutions. Coupled with uncertainty in future growth and demand, businesses struggle to set IT sourcing strategies, balancing the risk of inaccurate capacity planning against budget limitations and availability requirements. Embedding flexibility into data center investments will help to minimize that risk, while increasing operational and cost efficiency by allowing customers to customize and scale capacity as needed. This HP-commissioned profile of US and UK enterprise IT decision-makers responsible for data center strategy evaluates adoption trends and challenges associated with HP s facility-as-a-service solution (i.e., data centers), based on Forrester s own market data and a custom study of the same audience.

2 1 Enterprises Still Rely On And Invest In Owned Data Center Facilities As enterprise technology footprints continue to expand, increasing demand for compute, storage, and networking resources directly inflates data center capacity requirements and budgets. While enterprises plan to increase investments in hosted and outsourced solutions, the majority of infrastructure will remain in owned facilities. Looking at the future of data center capacity planning, our data shows that: The majority of enterprises plan to maintain or increase spend on data center facilities. According to Forrester s Forrsights Hardware Survey, Q3 2013, 36% of US and UK hardware decision-makers in IT management roles or higher plan to increase their spending on data center facilities in the next 12 months, and 49% think the budget will stay about the same (see Figure 1). Only 10% plan to decrease their spending. It follows that as enterprises invest more heavily in technology, the budgets corresponding to hosting that technology will need to increase to keep pace. Even in the future, the bulk of infrastructure will remain in owned facilities. According to Forrester s Forrsights Hardware Survey, Q3 2013, US and UK hardware decision-makers in IT management roles or higher indicated that they host an average of 64% of infrastructure in owned facilities today (see Figure 2). In four years, that average will decrease to 49% but will remain the most utilized option. Simultaneously, the average percentage of infrastructure in hosted/outsourced facilities will rise from 13% to 20%, and the average percentage in public cloud will double from 7% to 14%. As the performance, security, and cost of cloud and outsourcing providers continue to improve and alleviate customer concerns, enterprises will continue to move more applications and workloads into third-party environments. However, while these solutions may present favorable use cases for new applications and services, many enterprises will continue to manage core infrastructure in owned facilities in order to maintain visibility and control over proprietary, partner, and customer information. FIGURE 1 Enterprises Plan To Increase Or Maintain Spending On IT Infrastructure How do you expect your firm s spending on the following IT infrastructure expenses to change over the next 12 months? Base: 606 US and UK hardware decision-makers in IT management or higher (1,000+ employees) (Percentages may not total 100 due to rounding) Source: Forrsights Hardware Survey, Q3 2013, Forrester Research, Inc. FIGURE 2 Increase more than 10% Increase 5% to 10% Stay about the same Decrease 5% to 10% Decrease more than 10% Don t know 2% 6% 4% 8% 30% Enterprises Plan To Increase Or Maintain Spending On IT Infrastructure 49% What percentage of your infrastructure is/ will be in the following categories? (Average) Owned facility Colocation facility Hosted or outsourced (includes hosted private cloud) Public cloud 15% 17% 13% 20% 7% 14% 49% 64% Today In four years* Base: 331 US and UK hardware decision-makers in IT management or higher (1,000+ employees, Don t know responses omitted) *Base: 324 US and UK hardware decision-makers in IT management or higher (1,000+ employees, Don t know responses omitted) Source: Forrsights Hardware Survey, Q3 2013, Forrester Research, Inc. To further explore the future of IT capacity planning, we conducted a survey of 109 US and UK enterprise IT decision-makers in IT management or higher responsible for IT sourcing and data center planning and purchasing

3 2 decisions. Sixty-seven percent of our respondents describe themselves as a decision-maker in IT sourcing, and 51% describe themselves as a decision-maker in planning and purchasing data center facilities, indicating a convergence of these responsibilities and objectives. With regards to sourcing future data center capacity, our survey found: Most enterprises will require multiple environments to support their entire application portfolio. While the majority of US and UK enterprise IT decision-makers (58%) plan to source future data center capacity by owning it themselves, 43% plan to leverage cloud computing platforms and 40% plan to use managed services (see Figure 3). This indicates the beginning of a shift to a multisourcing model, where individual applications will be hosted in the best-suited environment. While dynamic applications that are built to scale up and down can take advantage of the pay-per-use model in the cloud, static workloads and legacy systems will most likely achieve the highest cost efficiency in owned or dedicated facilities. FIGURE 3 Enterprises Plan To Source Future Data Center Capacity From Multiple Environments What are your organization s plans for sourcing future data center capacity? (Select all that apply) Own them ourselves Infrastructure-as-a-service or cloud computing platforms Managed services or hosting of infrastructure and/or applications Colocation or other data center facility lease 36% 43% 40% 58% Enterprises Prefer To Spread Out Data Center Investments Across Capital And Operational Expenses With data center costs ranging from tens to hundreds of millions, any investment decision for new capacity will be heavily influenced by financial teams and budget holders. IT decision-makers are then challenged to deliver high-quality resources within relatively inflexible budgets, while balancing the risk of variable and unforeseen costs. Since the majority of infrastructure will remain in owned facilities, many enterprises expect to invest large amounts of capital to maintain control and visibility over their facilities. Investigating how enterprises would like to manage these costs, our results showed that: The preferred distribution between capital and operational expenses reflects how enterprises are used to paying for data center capacity. Our survey shows that enterprises prefer to pay for future data center facilities with a close to even split between capital and operational expenses (see Figure 4). Respondents slightly preferred initial upfront investment (53% average) versus operational expenses (47% average). This ratio aligns to the expected distribution of capital and operational expenditures for owned facilities, suggesting an underlying inertia to maintain traditional budget allocations as IT decision-makers expect to continue paying for owned capacity within the same financial constraints. However, organizations choosing to finance and build their own facilities will assume all risk, and while the risk is anticipated, this decision may not be the best financial fit for every organization. In the wake of alternative solutions, IT decision-makers have the opportunity to rethink this ratio and investigate and propose alternative solutions to budget holders. Fully outsourced services 28% Other 1% Base: 109 US and UK enterprise IT decision-makers responsible for IT sourcing and data center planning/purchasing Source: A commissioned study conducted by Forrester Consulting on behalf of HP, June 2014

4 3 FIGURE 4 The Ideal Mix Of Capital Investment Versus Operational Expenditures Is Close To Even How would you ideally pay for your next data center facility? Capital investment Operational expenses 16% 33% 28% 28% 27% 32% 20% Averages: Capital investment: 53% 9% 4% 5% Operational expenses: 47% 0-20% 21-40% 41-60% 61-80% % Percentage of total investment budget Base: 109 US and UK enterprise IT decision-makers (manager+) responsible for IT sourcing and data center planning/purchasing (Percentages may not total 100 due to rounding) Source: A commissioned study conducted by Forrester Consulting on behalf of HP, June 2014 Data Center Planning Highlights Importance Of Uptime And Cost Management With businesses demanding uptime and cost reduction, data center decision-makers will continue to seek out solutions that both minimize the risk of downtime and total costs. With more internal and external processes becoming digital, it s no surprise that security is also top of mind as IT is now responsible for securing both proprietary and customer information. Our survey shows that: Security and total cost of ownership are the top two most important factors in data center capacity planning and facility investment decisions. Ninety-two percent of respondents listed security and risk/exposure as important or very important, with 73% listing it as very important. Ninety-two percent of respondents also listed cost as important or very important (see Figure 5). The resiliency of the facility was also highly ranked, with 84% of respondents listing it as important or very important. These findings highlight the ongoing need for data centers to be always on and always available at the lowest possible cost. Enterprises value flexibility when planning future capacity. Eighty-six percent of survey respondents indicated that flexible capacity allocation, the ability to scale their operation up or down as needed, was important to making decisions about data center capacity planning and facility investments. This demonstrates the need and desire to be able to seamlessly increase or reduce capacity as business demands evolve. Top concerns about building or owning data centers focus around time-to-market and changing business requirements. We asked respondents to select their top three concerns when choosing to build and/or own a data center. Along with the aforementioned importance of costs and security, enterprises are concerned with timeto-market (35%) and changing business requirements (29%) (see Figure 6). These concerns reflect the businesses rising expectations around speed and agility: IT needs to be able to react quickly and rapidly deliver new services and updates. This demand for marketresponsive solutions has driven many organizations to adopt cloud and on-demand resources, as current environments cannot react quickly enough to outpace competitors. However, the preference to keep the majority of infrastructure in-house suggests that this shift is driven more by necessity and not necessarily preference.

5 4 FIGURE 5 Top Factors In Data Center Capacity Planning And Facility Investments Total cost of ownership (i.e., total investment and operational expense over the lifetime of the facility) How would you ideally pay for your next data center facility? 54% 38% 6% 3% Security and risk/exposure 73% 19% 5%3% Flexible capacity allocation (i.e., ability to scale up or down) Very important Not at all important 1 Don t know/na 39% 47% 11% 3% Resiliency level and availability of the data center facility 54% 30% 6% 5% 5% Network connectivity options/carrier availability/ 45% 38% 17% 1% carrier density 1% Vendor support and services 32% 48% 16% 3% 1% Level of control over data center facility 30% 50% 23% 3% 1% Flexible contract terms (e.g., lease terms, SLAs, 29% 42% 26% 3% pricing structure, etc.) 2% Access to cloud, managed service 32% 38% 21% 6% 1% providers, or other partners 1% Industry regulators and compliance 37% 32% 23% 6% 1% Investment and expense structure 28% 41% 26% 5% 1% (i.e., capital versus operational expenditure) Energy efficiency of the data center facility 18% 42% 28% 8% 4% (i.e., low PUE, outside air economizers, etc.) 2% Company culture 15% 32% 37% 14% 1% Proximity of location to corporate offices 12% 28% 35% 17% 7% Base: 109 US and UK enterprise IT decision-makers (manager+) responsible for IT sourcing and data center planning/purchasing (Percentages may not total 100 due to rounding) Source: A commissioned study conducted by Forrester Consulting on behalf of HP, June 2014 FIGURE 6 Top Concerns In Owning/Building Data Centers What are your top barriers/concerns when choosing to own and/or build a data center? (Select up to three) Cost, rising expenses 59% Security risk/exposure 49% Deployment time 35% Unforeseen change in business requirements (e.g., new services, mergers, acquisitions, etc.) Maintaining internal skill set 26% 29% Unforeseen maintenance costs Inaccurate capacity planning Finite capacity potential (i.e., fixed maximum space and/ or power available at the site) 17% 17% 21% Uniform availability/redundancy specifications Limited network carrier availability 9% 11% Base: 109 US and UK enterprise IT decision-makers (manager+) responsible for IT sourcing and data center planning/purchasing Source: A commissioned study conducted by Forrester Consulting on behalf of HP, June 2014

6 5 Final Sourcing Strategy Should Balance Cost With Agility And Flexibility With technology services directly affecting customer satisfaction and revenue streams, businesses expect IT to provide agile and flexible resources that can respond quickly to market dynamics. With persistent demands for uptime and cost reduction, combined with heightened concerns over data security, those in charge of sourcing new capacity are challenged to deliver highly resilient and secure environments that are both agile and cost-efficient. However, with more variety in sourcing options and growing interest in managed, hosted, and cloud solutions, businesses will need to rethink traditional budget allocations. While modular data center solutions break up and spread out upfront investments, outsourced solutions will shift spending from capital to operational. More elasticity in expense structures will allow IT decision-makers to consider a larger variety of solutions and convert sourcing conversations from cost-directed tactical decisions into holistic strategic initiatives that prioritize flexibility, minimize financial risk, and will meet the rising expectations of end users.

7 6 Methodology This Technology Adoption Profile was commissioned by HP. To create this profile, Forrester leveraged its Forrsights Hardware Survey, Q Forrester Consulting supplemented this data with custom survey questions asked of 109 US and UK enterprise IT decision-makers in IT management or higher responsible for IT sourcing and data center planning and purchasing decisions. The auxiliary custom survey was conducted in June For more information on Forrester s data panel and Tech Industry Consulting services, visit ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to 1-QE9ASI