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Top data center market news stories of 2016

Outages, acquisitions and server innovations piqued the interest of enterprise IT shops in 2016. Here's a look back at five of the biggest data center news stories from this year.

Data center market news in 2016 spanned a variety of topics that affected enterprise IT shops. Cloud and server innovations dominated much of the discussion, while a number of outages prompted some teams to investigate their disaster recovery strategies and examine their vendor partnerships.

Downtime at Verizon affected the airline industry, and the Dell-EMC merger continued to shake up the data center market landscape. RHEL 8 also piqued interest for users looking for Red Hat and Microsoft integration.

Here's a look back at some of the top news stories from SearchDataCenter in 2016.

Move back from cloud to data center

One of the earliest data center news stories in 2016 came when Groupon recognized that cloud was not the answer for its growing demands. When cloud expenses eclipse $200,000 per month, it might be time to look into other options, said Harmail Chatha, director of global data center operations for Groupon.

Groupon started in the cloud, but began to move away from it in 2011 in search of a more cost-effective alternative. By the start of 2016, Groupon had 95% of its production environment in data center colocation space, with the remaining 5% in AWS.

High power needs forced Groupon to develop a cold-aisle containment system within its architecture, and the company's linear programming model helps to optimize space. Groupon has expanded its data center footprint twice since it moved into Vantage Data Center's V3 data center in 2011.

Dell-EMC merger closes, but user questions linger

The Dell-EMC merger closed this year, but that didn't stop users, other vendors and investors from seeking more information on the megadeal.

The Dell software business sale in June, for example, raised questions about who would benefit most from the deal. Some users saw the software sale to a private equity firm as a step toward clarity for Dell-EMC in the hyper-converged market. Still, other users remained uneasy and wondered what the merger, overall, will mean for their buying decisions down the road.

Dell attempted to transition from a hardware-first entity to a major player in the software field, so the sale of its software business represented a white flag on those efforts. However, even with the software sale -- which could help prevent future overlap with VMware offerings -- Dell held onto products including Boomi and AtomSphere, as it looks to move forward in the cloud.

Server market stays loyal to enterprise

The gap between enterprise spending on infrastructure hardware and software compared to cloud service provider spending is narrowing, but server vendors won't likely turn their attention away from mainstream IT anytime soon.

The data center infrastructure market was worth over $120 billion at the beginning of 2016, with a projected 3% annual growth. Software, virtualization, blade servers and security accounted for the biggest pieces of the market puzzle.

Enterprises still account for the largest share of server spending, but cloud providers represent the top four customers in the server market segment. The focus on simplicity and the growth of convergence and hyper-convergence is also impacting the market.

As the calendar turns to 2017, the rise of cloud providers and their increased demands for servers will narrow the gap more with enterprises. But, most vendors still plan to focus their efforts on their longtime enterprise customers.

Verizon outage keeps JetBlue grounded

In January, the data center market turned its attention to Verizon, whose outage knocked JetBlue infrastructure offline for several hours, grounding the airline as IT staff frantically tried to put the pieces together. At a high level, the outage raised disaster recovery (DR) and uninterruptable power supply questions for both companies. At the enterprise level, understanding downtime procedures and power failures became a top priority.

A maintenance operation reportedly knocked the Verizon data center offline, but the Verizon and JetBlue DR policies did not kick in properly and resulted in thousands of missed and delayed flights in early January. The lengthy downtime that followed the outage affected thousands.

Smaller enterprises should recognize that even major companies can be left in the dark due to an error -- usually a human error -- and that they need to examine their DR policies on a regular basis.

Future of Red Hat integration with Microsoft gets boost

RHEL 8 updates are on the horizon for Red Hat as the server OS hits maturity. The release date for RHEL 8 has not been announced, but the data center market welcomed the enhanced integration with Microsoft and a greater focus on security.

With current RHEL versions, a dependency on packages remains an issue. Users hope that RHEL 8 will relieve this dependency hell, and increase stability for changes to infrastructure and deployment. RHEL 8 looks to offer a minimal install version for users, and an opportunity to easily layer packages for enterprise IT.

RHEL 8 -- which wasn't the only focus of the Red Hat Summit in June, as the company looks to mobile and big data for growth -- could also serve both linear and distributed apps in more agile ways.

Next Steps

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This was last published in December 2016

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