Revolutionary Disruptors Are Coming to Your Data Center

Four points to consider for revolutionary disruptors and incumbent data center vendors

Traditional IT infrastructure approaches are struggling to support the ongoing digitalization of businesses. New and disruptive vendors bring technologies and business models that change the rules of the data center market.

As more data center infrastructure and operations (I&O) value is delivered as software on commodity hardware, the competitive barriers to market entry have lowered.

Joe Skorupa, vice president and distinguished analyst at Gartner, examines what opportunities this will present.

Who are these revolutionary disruptors?

Gartner categorizes data center vendor behaviors into three types:

  1. Revolutionary disruptors are typically new to the data center market bringing disruptive technology or a new business model, often both. This category includes startups such as Nutanix or SimpliVity, as well as more mature vendors such as Amazon Web Services.
  2. Protectors represent the status quo. These traditional data center infrastructure providers, like Cisco and NetApp, are driven by the protection of their installed base and preservation of profit margins.
  3. Evolutionary disruptors complete the picture, bringing innovations and cost advantages from adjacent technology markets. For example, Hewlett Packard Enterprise is a protector in the server market, but an evolutionary disruptor in networking. Huawei and VMware are two other examples.

Why are these revolutionary disruptors here?

As more data center infrastructure and operations (I&O) value is delivered as software on commodity hardware, the competitive barriers to market entry have lowered.

“While data center I&O teams are traditionally risk-averse, the increased pressure to reduce IT budgets, and the need to increase agility, is leading buyers to seek more innovative solutions,” Mr. Skorupa said.

Why do they represent such a threat to the status quo?

Typically these are private companies, led by experienced executives who can attract top talent and funding, that have the ability to experiment without risking an established business and revenue streams.

“Their ability to try out new business models and tailor their offering to the buyers’ needs, in both its delivery and its consumption model, enables them to outmaneuver larger well-established providers,” Mr. Skorupa said.

Yet, they face many hurdles from low buyer trust, limited market reach and small ecosystems. The brilliance of an idea may be enough for a low-value acquisition by an incumbent but not a guarantee of success.

Below we outline a SWOT analysis of the revolutionary disruptors (See Figure 1).

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Figure 1: Revolutionary Disruptors — Strengths, Weaknesses, Opportunities and Threats

revdisrupt_infographic

Source: Gartner (October 2016)

How can revolutionary disruptors succeed?

Only a small number of revolutionary disruptors will likely succeed. The ones that do best understand where and how to disrupt in this quickly changing environment.

Below are four points of advice for disruptors, or alternatively, four warnings for incumbents:

  1. Differentiation — Revolutionary disruptors must clearly differentiate their approach to solving client issues via a combination of product/service offering, business model, go to market and communication strategy
  2. Slipstream — Rather than go head-to-head, disruptors should look for market segments that allow them to “slip stream” competitors to minimize the risk of incumbent-driven fear, uncertainty and doubt about their company’s viability.
  3. Pivot — Disruptors need to quickly adjust their value proposition if it doesn’t resonate with an evolving market. Too often revolutionary disruptors fall in love with their technology and fail to adjust to market demands.
  4. Alliances — Innovative alliances with established vendors, system integrators and consultants can quickly enhance reputation and go-to-market capability.

 

 

Additional information is available to Gartner clients in the report ‘Revolutionary Disruptors Are Changing the Rules of the Data Center Infrastructure Market,’ by Joe Skorupa, et al.

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