Riding the Coming Wave of IT Infrastructure Upgrades

One of the bad things about virtual machine software from the perspective of the channel is that it allowed customers to reduce the number of x86 servers they needed. While the overall number of x86 servers being sold continued to rise, higher utilization rates constrained the number of servers being sold because customers are getting more mileage out of their existing x86 servers.

But now IT organizations are starting to struggle with virtual image sprawl. Not only are the number of virtual servers that IT organizations are trying to manage growing exponentially, the size of virtual images is growing. A new report from the IBM Institute for Business Value finds that virtual images are typically between five to 20 gigabytes in size.

From a channel perspective that’s good news. This month IBM, Hewlett-Packard, Cisco and Dell have all released next-generation x86 servers based on the new Intel Xeon E5-2600 family of processors from Intel. As virtual machine performance concerns rise, so too does the awareness of the memory and disk I/O limitations of legacy x86 servers. Some organizations may opt to move to a new class of higher performance servers all together, but the vast majority of IT organizations are going to look towards a new generation of x86 servers that have been optimized for virtual machines.

The end result should be a boon for the channel in the form of a wave of server upgrades. Better still, those server upgrades are likely to put more pressure on limited network bandwidth resources, resulting in a shift to next generation 10 and 40 Gigabit Ethernet networks.

What’s unusual about this activity is the number of related data center technologies that are making simultaneous advances. This creates a unique opportunity for solution providers because every upgraded piece of IT infrastructure such as a server should create an additional opportunity to sell any number of additional products, such as a router or a switch. The challenge solution providers face is making sure their sales people are well trained enough to identify the next logical upgrade opportunity once they decide to upgrade any part of their existing IT environment.

They may not want to push that issue immediately for fear of scaring off the customer. After all, an across the board IT infrastructure upgrade is both a daunting and expensive proposition. But the fact that many of these technologies are moving forward in lock step creates a lot of interesting follow-on lead generation opportunities for the solution provider.

While the last few years have been tough on IT infrastructure sales, the outlook for server, storage and networking equipment sales looks promising. With or without a major economic turnaround, technology trends starting with virtualization are conspiring in ways that will soon force a significant number of upgrades. The challenge facing solution providers is how to best position their organization to take advantage of those opportunities. Like most things in life, once everybody else figures out something is happening the opportunity is quickly lost. This coming wave of IT infrastructure upgrades will be no different.