Spiceworks: Cloud Far from Replacing On-Premises Server Hardware

On-premises server infrastructure will remain prevalent and important to businesses despite growing adoption of cloud infrastructure.

That’s according to Spiceworks‘ 2019 State of Servers report, which examines on-premises server infrastructure in the workplace, including purchase plans, brand prevalence and perceptions, and emerging trends in businesses across North America and Europe.

Spiceworks surveyed 530 IT buyers from organizations across both continents.

Ninety-eight percent of businesses currently run on-premises server hardware, and 72 percent of businesses plan to buy new server hardware within the next three years.

Spiceworks’ Peter Tsai

Peter Tsai, senior technology analyst at Spiceworks, tells Channel Futures the data shows more than one in three (36 percent) organizations plans to buy server hardware in the next year, and that about half of businesses will purchase through the channel, “so there’s definitely opportunity for channel partners.”

“Additionally, IT buyers told us larger enterprises are most likely to purchase new servers through a VAR, while smaller companies are more likely to turn to an MSP for assistance on selecting the right servers for their business,” he said.

Enterprises with more than 1,000 employees are most likely to buy new servers this year. Some two in three (68 percent) enterprises plan to buy servers within the next 12 months, compared to 34 percent of midsize companies with 100 to 999 employees, and 30 percent of small businesses with fewer than 100 employees.

“The use of cloud infrastructure has grown dramatically over the years, but it’s not a perfect solution for every organization or workload,” Tsai said. “While not specifically mentioned in the study, often because of cost, latency, regulatory or control reasons, it still makes sense for organizations to run server hardware on premises.”

The top factors driving businesses to buy new server hardware include company growth, performance degradation of existing infrastructure, maintenance costs associated with aging hardware, and reliability issues, according to the report.

Nearly one-third of organizations also plan to buy new servers due to server OS end of life, such as Windows Server 2008 end of service scheduled for January 2020. When comparing company sizes, the results show enterprises are more likely to purchase new servers on a schedule outlined in a corporate technology replacement policy, while small businesses are more likely to wait until hardware failure.

Across all company sizes, two in three (68 percent) reported using on-premises servers from Dell Technologies, while almost half (46 percent) reported using Hewlett-Packard Enterprise (HPE). Additionally, 15 percent of organizations are using Cisco servers, 12 percent IBM and 9 percent Lenovo.

Adoption, however, varies by company size; for example, enterprises are more likely to use HPE servers while SMBs are more likely to use Dell servers.

Spiceworks also examined the attributes IT buyers associate with the server brands their business is using or planning to use. Dell Technologies ranks the highest for value for money, quality support and ease of management. HPE also received high marks across all attributes, while IBM was most frequently associated with reliability. There’s not a clear leader when it comes to server security. One-third of IT professionals didn’t associate any server brand with security.

Intel remains the most commonly used CPU manufacturer with 93 percent of businesses using Intel processors in their servers. AMD, however, is expected to gain some ground. Sixteen percent of respondents are using AMD processors in their servers, and that number is expected to increase to 21 percent by 2020.

“When looking at emerging trends, it was interesting that adoption of solid-state drives (SDDs) has already reached 62 percent of organizations, and is expected to increase to 72 percent by 2020,” Tsai said. “Also, adoption of hyperconverged infrastructure usage is quite high, with adoption expected to reach 46 percent by 2020.”