No server makers
The future of IT looks grim as the relentless demand for technology from giants like Google and Microsoft could potentially eliminate competition from independent chip, system, and storage manufacturers. In IDC’s own words, its Worldwide Quarterly Enterprise Infrastructure Tracker: Buyer and Cloud Deployment is “designed to provide clients with a better understanding of how enterprise infrastructure technologies (server, external enterprise storage systems, purpose-built appliances: HCI and PBBA) are being deployed in cloud environments and what type of buyers are acquiring them.” According to the data, while hyperscalers, cloud builders, and other service providers who “build datacenter infrastructure and sell capacity on it” surpassed 50 percent share of the combined server and storage revenues in the first quarter of 2020, by the close of 2028, that figure will have jumped to 69.7 percent.
Exploring further into IDC’s data, The Next Platform’s analysis reveals that “non-cloud” spending is now seriously lagging behind “all-cloud”, a trend that shows no signs of slowing down. Timothy Prickett Morgan paints a grim picture of a future where organizations may lose the skillsets required to run their own infrastructure as they become more dependent on service providers. This path might lead to a scenario where there are no independent chip, system, or storage makers left, and IT expenses may increase significantly as a consequence. The possibility of a world with no server buyers or server makers, where hyperscale clouds dominate the market, raises concerns about inflated pricing, decreased customization options, and reduced flexibility for organizations seeking IT solutions.
In the longer term, enterprises, governments, and academic institutions (EG&As) aiming to utilize AI technology may find it more cost-effective to do so through cloud services rather than maintaining their own data centers. This shift towards cloud dependency highlights the potential risks involved in the tech community. If organizations continue to rely heavily on hyperscale clouds and lose the ability to manage their hardware, it could lead to a scenario where only a few major players hold significant sway over IT solutions, potentially limiting competition and innovation.
While this worst-case scenario may not necessarily materialize, the trends and projections put forth by IDC and analyzed by The Next Platform underscore legitimate concerns within the industry. Monitoring how the dominance of hyperscale clouds affects the IT landscape is crucial for organizations, tech vendors, and policymakers to ensure a competitive and diverse market that caters to the evolving needs of technology users.
