Techaisle Blog

An extensive survey of US small and midmarket businesses shows that HCI adoption is poised to double within the current planning period. Techaisle’s US SMB & midmarket survey on CI/HCI adoption shows that 18% of midmarket firms are currently using hyperconverged infrastructure (HCI – systems that package compute, storage, networking, hypervisors and other system software into a single product) but more compelling is the fact that another 46% are actively investigating and planning to adopt, a 2.5X increase in adoption – significant growth over the next 12-18 months.

Within the upper midmarket firms (500-999 employee segment), the current penetration is 45% and another 38% are planning to adopt. HCI has also caught the attention of small businesses (1-99 employees) with slightly less than 1/3rd of IT mature small businesses are planning to adopt. Dell EMC XC Express, HPE HC380 and Cisco HyperFlex Systems appear as top choices within the SMB segment.

SMBs view technologies supporting HCI adoption as contributors to business growth. Techaisle’s survey data shows that the drivers of adoption, anticipated or currently realized benefits and important purchase criteria are very tightly aligned around cost, agility, scalability, operational efficiency and high availability. The SMBs that are fully committed to digital transformation are on the fastest path to adoption, as HCI is an important element of a future-ready, resource-sensitive IT approach.

Converged infrastructure solutions (which provide a hardware-centric bundling of system components) are already in widespread use with twice as many SMB firms already using; and software-defined HCI delivers even more compelling advantages (relative to conventional/siloed server, storage, networking and management technologies) than SMB buyers obtain from converged infrastructure. Some of the important benefits that SMB & midmarket buyers realize with HCI include:

The rise in virtualization has been driving an accompanying demand for converged infrastructure or hyperconvergence: products that combine processing, storage and networking into a robust and scalable unit that can support and respond to the options inherent in virtualization. While the migration from separate server, storage and networking products to converged infrastructure is still in its early stages, the Techaisle SMB virtualization & converged infrastructure survey shows that it is beginning to gain traction, especially within more sophisticated SMB accounts.

Scale computing, launched in 2008, based out of Indianapolis with development in San Francisco bay area and offices in London, Paris, Toronto and Dubai made its SMB focused hyperconvergence launch at VMworld in 2012. Since then Scale Computing has implemented over 6,000 systems in a little over 1,600 customers.

As per Techaisle’s SMB virtualization and converged infrastructure survey, the key barriers to adopting hyperconvergence within SMBs are high cost of implementation, infrastructure disruption during roll-out, greater-than-anticipated time and resource investment, and the complexity of integrating new infrastructure units with existing infrastructure. For example, a pet peeve of SMBs when using VMware on HP Proliant DL380 G8 is their inability to use cloud migration to upgrade or add G8 or G9. These are the issues that Scale Computing is trying to address. In defense of VMware, although the initial code base of ESX was never built to be self-aware, VMware is working on it.

Founded by an engineer in 1991, New Belgium Brewing, a midmarket firm with 700 employees, uses technology across its entire business. Automation in engineering is in its DNA and data is at the core of its business success. Technology is pervasive within the organization and is used for manufacturing, quality, sales, operations and even sustainability needs and initiatives. In an interview with Techaisle, Jake Jakel, Technology Solutions manager at New Belgium Brewing said, “Technology is a huge part of what the company does to bring to market its Fat Tire Amber Ale beer. Our entire sales staff relies on data to be at their fingertips when they are out in the field selling our products and brands, and our non-field staff uses data from an analytics standpoint to understand what they are doing right and which areas need attention”.

A key challenge for New Belgium Brewing is managing growth, not only business growth but also corresponding growth of IT staff to support the business. It finds itself frequently caught in the medium sized business conundrum, the in-between phase where it is neither a small business nor a large enterprise. It has many IT personnel who are generalists supporting the business, and is trying to add specialists but is faced with issues such as at what pace should it add the specialists and in what areas should it add first. It is an area which is no different than other growth-oriented mid-market firms. In a Techaisle’s survey, we found that 36% of midmarket businesses have taken steps to address the need for what is sometimes referred to as “double deep” (with respect to IT and business experience) employees by employing IT specialists for the growth and rapid adoption of emerging technologies.

For all the talk of a world predicated on software-defined resources, there is still need for capable, reliable, scalable physical infrastructure to support these software layers and the features and applications that sit atop them. The rise in virtualization has been driving an accompanying demand for converged infrastructure: products that combine processing, storage and networking into a robust and scalable unit that can support and respond to the options inherent in virtualization.

While the migration from separate server, storage and networking products to converged infrastructure is still in its early stages, the Techaisle SMB & midmarket converged infrastructure survey and corresponding Techaisle SMB & midmarket virtualization adoption trends survey shows that it is beginning to gain traction, especially within more sophisticated accounts. Data shows that 10% of small businesses and 27% of midmarket businesses (weighted data) are planning to adopt converged infrastructure. Current midmarket adoption rates for converged infrastructure are below findings for VDI but differences readily become apparent when analyzing the data from the lens of Techaisle’s segmentation by IT sophistication. Converged infrastructure adoption rises steadily with increased buyer sophistication in both the small and midmarket segments. As the market matures, we expect to see accelerated adoption of converged infrastructure across the SMB market.

What is driving converged infrastructure adoption?

While there are technical advantages that make converged infrastructure products more effective virtualization hosts than traditional servers, Techaisle’s research shows that SMB buyers adopt converged infrastructure for one or more of five primary reasons:

1. to benefit from converged infrastructure’s integrated design and efficiency,
2. to tap into its ability to enable centralization/management of resources,
3. to capitalize on performance/time-to-benefit advantages,
4. to improve IT agility and its ability to meet business needs, and
5. in response to core requirements for cost savings and improved security.

Drilling down into the data Techaisle finds that core requirements inform many converged infrastructure strategies, and the benefits and efficiency of integrated solutions are also frequently cited as a driver of converged infrastructure adoption.