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Data explosion is driving a change in the server market model

Big data, cloud-based applications and whitebox servers: a heady combination that is sending a seismic shift through the data storage market.

The volume of data being collected is doubling in size every two years. IDC says that by 2020, an estimated 44 zettabytes of data will have been created. Much of this will be stored in datacentres which are increasingly looking for cost-effective, simplified business models to cope with these high data volumes.

To achieve this they are following the models pioneered by the huge curators of consumer data such as Facebook, Amazon and Google – by using whitebox servers. These servers de-couple the traditional inter-reliance of hardware, software and maintenance that is the cornerstone of servers sold by the traditional, larger Tier One (T1) Original Equipment Manufacturers (OEMs).

The whitebox servers are built using industry-standard components but to a bespoke need. They deliver a lower total cost of ownership (and when you are dealing in the volumes of data involved here, that can be a considerable factor), offer greater flexibility and are easily upgradable and scalable. Whitebox solutions are provided by the very businesses – usually the Original Design Manufacturers (ODMs) such as Quanta – who build the servers for the T1 companies and who, until now, relied on those companies as their primary (or only) route to market. The price of these whitebox servers may be lower, but for the ODMs the margins from selling directly to the channel are still greater than selling via traditional large OEMs.

“It’s the big data users, the likes of Facebook and Amazon that are driving this change,” said Gerard Marlow, a general manager at Hammer, the award-winning, specialist value-add distributor with 25 years’ experience in data storage, servers and end-to-end IT solutions. “They are the ones who have pioneered this new way of working, and the model is quickly being picked up by those with smaller data storage needs.”

Companies such as Intel and Supermicro are also now designing and creating compute and storage solutions, which are supplied through the traditional route of distribution and channel partners. These manufacturers are gaining an advantage by providing software-defined, optimised, flexible, cost-effective and scalable solutions with which traditional T1 providers are finding it hard to compete.

Interestingly, many of these ODMs are starting to badge and brand their whitebox products, in effect creating a whole new segment to the supply chain. Behind this new way of working is de-coupling, and key to that is a partnership between the hardware providers and software-defined storage vendors such as DataCore. “Openstack, along with the likes of Ceph, Hadoop, Redhat, Scality and SwiftStack, has also been a huge driving force around the growth in whitebox in the datacentre,” said Tom Cox, whitebox server sales manager at Hammer.

Sitting alongside the whitebox servers are de-coupled storage boxes. Companies such as Dot Hill, HGST, Infortrend, Promise, Quantum and Seagate are manufacturing – and selling directly to the channel – cost-effective primary whitebox storage. Along with the servers, these provide huge datacentres with a complete de-coupled option. This shift in the supply chain dynamics is clearly having an impact.

IDC reports: “The ODMs have outpaced the overall market and [have] come to represent a large part of the shipments.” Gartner predicts sales of whitebox servers to big datacentres will reach 16% of global X86 server shipments by 2018. Outpacing maybe, but not replacing; there is still a strong demand for T1 servers, specifically from those organisations that have a global reach but which don’t have the infrastructure or inclination to undertake their own maintenance.

“In those situations the advantages of a branded server can outweigh the benefits of a whitebox,” added Gerard Marlow. Even so, this shift within the market is prompting the T1 manufacturers to re-assess their own business models with many starting to partner with software suppliers to meet this new demand for de-coupled products and services. Dell, for example, partners with Nutanix to offer a branded server with third party associated software defined storage.

Hammer can supply T1 servers as well as a broad range of market-leading components to create a configuration that meets a customer’s specific requirement for a whitebox server and storage solution, complete with a pick’n’mix approach to compute, storage, software and service.

Source: Hammer
Published Date: 09/01/2017

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