IT Hardware Spending Persists Despite Cloud Competition
Hardware still accounted for about almost a third (30 percent) of IT spending in 2021, despite the general cloud market pull, according to a newly published study.
The study, "Hardware Trends in 2022 and Beyond" by Spiceworks Ziff Davis, acknowledged that cloud spending is on the rise. While an earlier study by Spiceworks Ziff Davis had found that cloud use accounted for 40 percent of workloads, that percentage was expected to increase to 50 percent of workloads by 2023, according to the researchers.
The current "Hardware Trends in 2022 and Beyond" study was compiled from July 2021 survey data. It represented "1,145 IT buyers from organizations across North America and Europe."
Overall Hardware Spending
Overall hardware spending actually dropped, per the Spiceworks Ziff Davis 2022 study. It constituted 33 percent of IT budgets in the previous report vs. 30 percent in the 2022 report. Meanwhile, cloud IT spending showed an upward trend. Cloud spending grew from 22 percent in the previous report to 26 percent in the 2022 report.
Nonetheless, the majority of IT organizations continued to use their own hardware to run workloads, the Spiceworks Ziff Davis report contended:
On-premises servers remain extremely important to organizations worldwide. The majority of workloads today are still running locally, and in 2023 almost all organizations (94%) will still use on-premises servers in some capacity.
Organizations currently appear to be sticking with "a hybrid world" (on-premises plus cloud) approach in terms of server use. The study speculated that local premises-based servers and cloud-based servers could grow "increasingly interoperable" over time.
Intel Server Processor Challenges
Some changes at the server chip level were noted in the 2022 report.
Intel represented 78 percent of processors used in servers vs. 30 percent for AMD, 18 percent for IBM and 11 percent for Arm. In two years, though, AMD is expected to show a 14 percent market-share gain, larger than an expected 7 percent gain by Intel in that same time period. The report suggested that AMD's introduction of Epyc and Ryzen chips in 2017 was the force that brought inroads into Intel's market dominance.
The report also predicted that the use of Arm-based processors on servers would rise. Arm-based chips were used on 11 percent of servers per the 2022 report, but Spiceworks Ziff Davis expects that figure to double to 22 percent by 2023.
Server Storage Trends
The use of solid-state devices (SSDs) for server storage is at the mainstream stage. The report found that 55 percent of the respondents were using "local SATA-based SSDs in servers."
NVMe use for storage was reported to be at 37 percent in the 2022 study. It was just 13 percent in the prior-year's report. Larger enterprises (more than 500 employees) are more likely to adopt NVMe technology, the report indicated.
All-flash storage arrays for servers were used by 39 percent of enterprises vs. 14 percent of the smallest companies (1 to 99 employees), per the 2022 report.
Advanced Server Capabilities
Spiceworks Ziff Davis also polled respondents on the use of some "advanced" server technologies. The use of embedded remote management topped the adoption rate at 56 percent, followed by fault tolerance and failover capabilities at 55 percent.
Here are some other advanced server uses uncovered by the Spiceworks Ziff Davis poll:
- Software-defined storage use -- 39 percent
- Server automation/orchestration -- 37 percent
- Software-defined networking -- 36 percent
- Automated workload balancing -- 36 percent
- Integration with public cloud -- 36 percent
- Workload migration -- 34 percent
- Automatic issue remediation -- 27 percent
- On-premises "as a service" billing -- 25 percent
The latter item refers to businesses renting their servers instead of buying them, where the billing is conducted on a "pay-as-you-go" use basis. The report suggested that this spending model was poised for future growth, "especially among larger companies."
Desktops vs. Laptops
The report also included a section on client device hardware use. Laptop spending showed gains over desktop spending in 2021, which persisted in 2022.
There were regional differences with regard to desktop use. Employees favored using desktops at 44 percent in North America, vs. 35 percent in Europe, 29 percent in Latin America and 27 percent in Asia-Pacific.
Intel currently dominates the client device processor market (88 percent), but the report contended that its control is less acute than in the server market. Almost half of organizations (47 percent) are using AMD chips in desktop and laptop devices. IBM chips were used in 24 percent of devices. Apple M1 chips were used by 24 percent, with Arm chip use reported at 21 percent.
Many more details can be found in the full Spiceworks Ziff Davis report, which is available at this page (no sign-up).
Kurt Mackie is senior news producer for 1105 Media's Converge360 group.