A new global study by Spiceworks Ziff Davis into the state of server and client computing devices has found that despite the rise of the cloud, computer hardware still accounts for the largest portion of overall tech spending, at 30% of overall IT budgets.
Peter Tsai, Head of Technology Insights at Spiceworks Ziff Davis
While businesses are increasingly modernizing their technology infrastructure to prepare for an increasingly hybrid future, that does not mean a migration away from traditional hardware. That’s the core finding of a new global study by Spiceworks Ziff Davis, which gathered information from over 1,000 IT professionals in companies across North America and Europe about the state of server and client computing devices.
The overall findings on the evolving relationship between cloud and on-prem are, however, complex and not clear cut, said Peter Tsai, Head of Technology Insights at Spiceworks Ziff Davis.
“You can pick sides and look at individual points and take sides with either – but its nuanced,” Tsai stressed. “People are still spending more on hardware than on cloud, but more workloads are moving to the cloud and on-prem and cloud are more interconnected. But in the next couple of years, businesses have no plans to curb their hardware spend.” They are also investing in more advanced capabilities like embedded remote management [such as Dell iDRAC, and HPE iLO technologies], now used by 56%, and fault tolerance/failover capabilities, often implemented through virtualization and hyperconverged systems, which are now used by 55%.
The study found that AMD processor-powered machines in particular are poised to do well. Within two years, business adoption of AMD is expected to rise to 60% for PCs and 44% for servers. That’s up from 47% for PCs today and 30% for servers.
“The rise of AMD in the commercial market here reflects the strength of their new server and PC processors, and their increased entry into the commercial market, which has been delayed somewhat by replacement cycles,” Tsai said.
Adoption of ARM server processors for businesses is also projected to double within the next two years, from 11% of businesses currently to 22%.
“This is very strong on the client side, particularly Chromebooks and Apple,” Tsai indicated. “We see a lot of uptick there.”
An important storage trend that the study identified is the rise of all-flash storage arrays at the expense of hybrid ones. More than two-thirds [68%] of enterprises, defined here as having 500+ employees, plan to adopt all-flash storage arrays within the next two years. 39% are using it today, with the rest having it in plans. That 39% figure is way up from 14% use in 2019, however.
“Hybrid flash were popular earlier, but all-flash is becoming the default answer,” Tsai indicated.
In addition, a majority of businesses [54%] plan to use faster NVMe storage technology in their on-premises servers by the end of 2023. 37% use NVMe today, up from 13% in 2019.
“SSD technology use was already high, but there is a bump here, although the big one took place with the move from spinning disks to SSDs,” Tsai noted.
Spiceworks Ziff Davis’ 2021 Cloud Trends report revealed earlier that 40% of workloads were running in the cloud, with that figure expected to rise to 50% by 2023. Their multi-year State of IT research also showed cloud spending growing over time, increasing from 22% of overall IT budgets in 2020 to 26% in 2022. Not surprisingly them, this study showed that the cloud “pay-as-you-go” model is becoming more popular on-premises. More than half [57%] of enterprises expect to adopt consumption-based infrastructure to some degree by the end of 2023, up from 25% today.
“Large enterprises are the canaries in the coal mine,” Tsai said. “They are more interested in composable computing – and are usually about three years ahead. We think others will follow suit 3-5 years down the line. Composable is energizing both tech stacks and billing structures and I think a lot of companies like that flexibility.
In addition to all this data on the rise of consumption-based composable computing, server spending is also projected to account for 11% of IT budgets in 2022, down from 14% in 2020. So is this all part of an ominous trend for hardware? Not necessarily, Tsai said.
“Most workloads today still run locally and even in 2023, 94% of organizations still plan to use on-prem servers in some capacity,” he indicated. “Businesses want their workloads to live where it makes the most sense. The cloud is great, but it is not magic and it is not the cheapest option. Because of that, I see a lot of staying power for hardware.”
The shift to remote work has had an impact of the kind of PCs organizations are buying. Companies now spend significantly more on laptops [19% of hardware budgets] than on desktops [14%]. Still, that desktop share is larger than many will expect.
“Desktops are still popular because they last forever – and also because some companies are cheap,” Tsai commented.
So how many of these trends are likely to be offset somewhat as people go back to the office”
“We believe that most of the changes will be long lasting,” Tsai said.
