The Covid-19 pandemic has blown a hole in many of the worlds economies, forcing many businesses to temporarily shut their doors, send employees home to telework, and in some instances cut their workforces. In the United States alone, more than 20 million jobs were lost and the unemployment rate went up to more than 14 percent. Companies choked with cash-flow problems have been left to manage their way through the coming months, trying to find places in already tight budgets where they can shave a few dollars.
The tech industry hasnt been spared from all this. IDC, which in April said that IT spending in 2020 would decline year-over-year by 2.7 percent due to the coronavirus outbreak, downgraded that prediction this week, predicting that IT spending will fall by 5.1 percent. However, despite those bleak forecasts, there are some bright spots on the tech front. Given the large numbers of employees now working from home, virtual desktop infrastructure (VDI) vendors have seen increases in use and video conferencing services providers are seeing demand spike. Zoom has said that the number of daily meeting participants jumped from 10 million in December to 300 million in April.
IT infrastructure also is expected to see growth this year despite the public health crisis. As organizations look for ways to shed costs and continue to modernize their businesses, they are looking to accelerate their use of cloud services, which is driving the need from cloud providers for more infrastructure. IDCs report says infrastructure spending will grow 3.8 percent this year, with Program Vice President Stephen Minton saying that where there is growth, most of it is in the cloud.Synergy Research Group, which keeps track of spending in the cloud and found that in the first quarter, as the coronavirus spread across the globe and the economic fallout began, almost $29 billion was spend worldwide on cloud infrastructure services, a 37 percent increase over Q1 2019.
Hewlett Packard Enterprise is seeing that effect with its GreenLake IT-as-a-service platform, which is designed to bring cloud-like environment on premises, unify everything from the datacenter through the cloud and out to the edge, and give businesses flexible payment methods. GreenLake, which HPE introduced in 2018 and has been building out since (including this week making its Nimble Storage dHCI disaggregated hyperconverged infrastructure available via GreenLake), also is foundational to the vendors plans to offer its entire portfolio as a service by 2022. According to Keith White, the one-time Microsoft cloud executive who in December came to HPE as its senior vice president and general manager of GreenLake, interest in the platform as accelerated since the pandemic.
Clearly the challenge is as customers step back and look at their environment and look at their balance sheet, theyre looking for free cash flow, White tells The Next Platform. Without revenue and income coming in with many of our customers, theyre stepping back and saying, Hey, what can we do here differently? Weve seen a pretty strong surge of interest for GreenLake over the last six to eight weeks. Its actually the number-one hit component of our website in the last six, seven weeks. Even from our partners we have a site that weve got partner tools and resources and information that GreenLake information has been number one on the partner site as well. Were seeing pretty heavy interest in that piece of it.
VDI on GreenLake is getting a lot of attention, thanks to the massive amounts of suddenly remote workers, but more industries are evaluating it.
Were seeing a lot of hospitals that are requiring additional storage capability, he says. Theyre having an influx of patients and information, a lot of x-rays that theyre taking on a daily basis to check chest conditions and lung conditions and that sort of thing, so were seeing a pretty big push from hospitals. Interestingly enough, employment agencies across the world are seeing a heavy push of people filing for unemployment. Theyre needing infrastructure and capabilities to do that as well. Also, obviously, were leaning in pretty heavy on the research firms, where theyre trying to do analysis for vaccines or medicine. Weve seen a big push on that.
At the end of the last fiscal quarter, HPE reported that there were more than 800 GreenLake customers. White declined to say where that number stands now well know more when the company reports its second quarter 2020 numbers May 21 but says that customer acquisition momentum is strong now and that it should continue as the Covid-19 crisis unfolds and even after its passed. The pandemic will have a lasting effect on how businesses operate.
The myriad concerns about revenues and balance sheets, costs and free-cash flow are pushing a new way of working and thinking faster than maybe what customers had planned on before to get to more of a GreenLake model, he says. They have the ability to pay as they go, pay for what they use, to expand capacity when its time to expand capacity versus over-provisioning. It rotates itself to be probably more commonplace and more of a new normal then perhaps whats been established before. Its a real opportunity for us to also have a different relationship with our customers, much more of a partnering relationship, and have very different dialogues around their challenges and the solutions they require for those business challenges.
The company is expecting that the new GreenLake Central offering will help accelerate that momentum. HPE first talked about GreenLake Central in December and said this week that it is now generally available to GreenLake customers. The software platform leverages an online operations console that enables organizations to manage applications and data throughout their entire cloud operations, from hybrid, public and private clouds and out to the edge. (The vendor also enhanced GreenLake support for data management, file storage and a co-location offering via partnerships with Cohesity, Qumulo and CyrusOne, respectively.)
With GreenLake Central, enterprises can more easily cloud instances and redeploy on-premises resources, monitor cloud costs and compliance in Amazon Web Services (AWS) Microsoft Azure and suggest spending priorities through integration with AWS Access Manager and Azure Access Manager, make recommendations around security, capacity and costs throughout all cloud environments, and leverage analytics regarding consumption to determine where workloads should be placed.
What weve done with GreenLake Central has really created a platform that allows a customer to basically manage and optimize their entire hybrid estate, White says. They can look across their datacenters, their co-locations, their edge locations, but also into the public cloud, into Azure or AWS, for example, and be able to take a look at things like how much they are spending [and] the costs theyre utilizing across their hybrid estate. We have capabilities within GreenLake that essentially give and do cost analytics to basically say how much theyre spending where.
Many organizations are eager to get out of the business of managing their own datacenters, but they still need to keep control over their data, applications and everything that comes with the cloud, including how much they are spending. The cloud initially came with promises of reducing infrastructure costs by eliminating capital expenses around hardware infrastructure and the ongoing operational costs of keeping a datacenter up and running. However, some enterprises found that other costs from networking to data storage at times ran significantly higher than expected.
Those dont happen all the time, he says. But at the same time, it does showcase this need for a CFO, for business leaders to get their arms around the costs and to understand not just what it is today, what were spending, but what the forecasts are and get insights on that on a regular basis. What Ive heard both from my time at Microsoft and here is that its super confusing where were spending money and that its difficult to get your arms around the costs and things end up being more expensive than expected in the public cloud. But they do want that level of depth and insight and analytics so that they can understand where and how to run things most cost-effectively. About the cost of everything, people are starting to get their arms around it and getting a better sense.
HPE had about 250 early adopters of GreenLake Central and key to their interest has been the ability to analyze the costs associated with the cloud, White says, adding that they felt blind with respect to what they were sending out.
Right now, about 70 percent of enterprise workloads remain on premises for a variety of reasons, from concerns over security, latency and compliance to the need to re-architect some applications to get them into the cloud. Hybrid cloud is the model that most businesses are expecting to embrace in the coming years and over the next year, the 70-30 percent split will stay fairly consistent, due in large part to the Covid-19 crisis, White says. Businesses will be more likely to keep the status quo as they navigate their way through the pandemic.
However, the drive to embrace the benefits of the cloud from the flexibility and easier scalability to the reduction of cost and management headaches and adopt cloud-native scenarios like containers and Kubernetes will continue to grow, he says.
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