Competition between Cisco and VMware intensifies in network virtualization

August 29th, 2014 by AnnMarie Jordan

Nikolay Yamakawa, Analyst for TheInfoPro

VMware is expanding its existing ecosystem of partnerships with its latest announcement of NSX integration with Arista as it moves closer to Cisco for network virtualization implementations between our studies. In 1H 2013, about 13 percentage points of in-use implementations separated Cisco’s lead in the space from VMware, but in 1H 2014, the gap has declined to just 2.4 percentage points. Announced earlier this month, the expanded strategic relationship with Arista may serve as an additional tailwind for VMware CEO Patrick Gelsinger to strengthen the company’s competitive stance against Cisco’s ACI platform. Cisco continues to display more future project plans than VMware for network virtualization, but if Cisco fails to convert those implementation plans into in-use cases and VMware successfully makes the conversion, we may see a new king of the hill.

More decision-makers are taking advantage of virtual networks today than a year ago. In 1H 2013, 37% of large and midsize enterprises reported implementations and an additional 11% had future project plans, while in 1H 2014, in-use cases have climbed to 41% of respondents with an additional 13% planning future implementations. Spending intentions also remain positive for the technology, with 16% citing budget increases in 2014 and 21% in 2015 vs. just 1% and 2% having budget cuts in plan respectively.

VMware and Cisco are the main beneficiaries of future adoption plans and budget increases for network virtualization. The two incumbents are taking different approaches to network virtualization, and both are goliaths in this standoff. It is too early to judge whether VMware’s lead in core server virtualization will spread into network virtualization or if Cisco’s entrenched position in the space will hold off. A recently published Technology and Business Insight from 451 Research, titled ‘Software-Defined Networking: Making Sense of a Complex Technology Inflection and Market Opportunity,’ explores network virtualization in detail and discusses the two approaches taken by VMware and Cisco.


Network managers had the following comments about network virtualization in their environments:

  • “We’ve become a VMware shop. We’ve done a little with Cisco virtual switches, but VMware’s big in that.” – LE, Services: Business/Accounting/Engineering
  • “We do a lot of that in the area of VMware.” – LE, Other
  • “We stand up virtual network switches that support the VMware servers.” – LE, Consumer Goods/Retail
  • “Discovery phase – Cisco Nexus offers some capability here.” – LE, Services: Business/Accounting/Engineering

Budgeting for the transition to cloud computing

August 27th, 2014 by AnnMarie Jordan

Peter ffoulkes, Research Director for Servers and Cloud Computing

From the budget perspective, enterprise IT organizations are increasingly focusing on the transformation to cloud computing in one form or another as being the IT delivery model of the future. In our most recent survey completed in August 2014, 37% of respondents had separate budgets for cloud computing, almost identical to the figure from a year earlier, and 12 percentage points higher than the number in the survey completed at the end of 2013. For the group with separate cloud budgets, spending has continued to show a trend to a more regular distribution of budget levels, with a minimum budget of $5,000 and a maximum of $30m. Median and mean levels of spending are $725,000 and $3.15m respectively, slightly down from the prior survey.

Cloud is still a small percentage of overall IT budgets

Of the remaining 63% of respondents who did not have separate cloud computing budgets, two-thirds were able to estimate the percentage of their overall 2013 IT budget spent on cloud-related projects in comparison to traditional non-cloud IT spending, with 57% spending 5% or less on cloud. Of the remainder, 25% spent 6-20%, with 8% spending more than 50% of their 2013 IT budget on cloud-related projects.


In line with the previous two surveys, 81% saw an increase in cloud spending from 2013 levels, and 82% expected 2015 spending to be higher than 2014 levels. Twenty-seven percent (27%) of respondents expected 2015 spending to increase by up to 10%, 36% by 11-50%, and 19% expected increases of over 50%. As indicated by median budget levels, the top five sectors were telecom/technology, public sector, energy/utilities, healthcare/pharmaceuticals and financial services.

Anecdotal commentary illustrates the slow and steady pace of cloud adoption by TheInfoPro’s respondent community:

  • “Small dollars ($100k) for now as we test and build comfort with technology/process. We are trying to redirect $100k working with partners to build the case for a private cloud.” – LE, Consumer Goods/Retail
  • “The 5% of cloud spending above would be 25-30% if you include … exchanges around the world, reference data providers. Externally provided data capabilities. Growth, it won’t spike. It’s a steady thing. We have to change some legal stuff as an organization to enable stuff to happen. We’re hamstrung by what data we can put where. 2016, 2017 more interesting things can happen.” – LE, Financial Services
  • “Challenge on separating spending – we have so many businesses. I cannot give you any figures as to what we’re spending. I can give you relatives. It’s impossible to separate the cloud computing budget because of how many different players there are. I can tell you this – it’s all opex. We cannot capitalize software or infrastructure as a service.” – LE, Energy/Utilities
  • “The way the DoD works, there is money assigned for large capacity machines, then commodity-type machines with no cloud capabilities. Agencies must then provide funding for software, developed code, and any cloud-based features/functionality. Our HPC lab has total spending of $2-3m. One to 2% is for internal cloud-related spending. We have no plans for external cloud spending. We want spending on internal cloud to grow, but it will stay flat or decline due to budget pressures, but will increase in 2016. We have a large machine coming in this year which has taken much of our resources for this year. Disk-based archive will grow, however, in 2014.” – LE, Public Sector
  • “Difficult for us to justify getting funding right now. For FY 2015, trying to put in about a hundred to two or 300 thousand in the budget for OpenStack or cloud-related initiative. Currently less than 5% of our budget. If the new ERP goes into cloud, 15-20%.” – MSE, Healthcare/Pharmaceuticals
  • “Guestimate 10% cloud to 90% traditional.” – LE, Industrial/Manufacturing

The race in capacity planning tools continues

August 25th, 2014 by AnnMarie Jordan

Nikolay Yamakawa, Analyst for TheInfoPro

VMware continues to lead the race in capacity planning tools, but as enterprises search for new efficiencies following IT’s transformation to a cloud-ready environment, change on the vendor landscape may follow. VMware’s lead in capacity planning tools stems from its dominant role in core virtualization that many large and midsize enterprises have still yet to complete. At first, efficiencies that virtualization and cloud computing bring to the table often overshadow the benefits enabled by capacity planning tools. However, as pain points continue to evolve at higher levels of virtualization, capacity planning continues to be a top pain point, cited by 9% of commentators in 2H 2013.

The results of the Wave 13 Servers and Virtualization Study show that 42% of large and midsize enterprises took advantage of capacity planning tools in 2H 2013, up from 38% in 2H 2012. From a total of 11% of enterprises with future project plans for the technology, almost half, or 5%, are planning to implement capacity planning tools in the long run. We expect the technology’s enterprise proliferation to continue in the future as server professionals seek out additional cost savings and efficiencies following private cloud deployments.

In 2H 2013, VMware gathered almost three times the selections for capacity planning tool implementations than did the closest runners-up, including homegrown approaches and BMC Software, but placing bets on which will prevail at the end may be premature given the expected x86 commodification. Microsoft jumped from seventh to fourth place for implementations between the studies and gathered most selections for near-term project plans. Satya Nadella’s ship may become a new runner-up to VMware if it successfully converts future project plans into in-use cases. In addition, a number of smaller vendors are also gaining traction in the space. A 451 Research report, titled ‘If your head is in the clouds, it helps to understand your capacity,’ (client login required) discusses some of the technologies and vendors that have been getting increased awareness in capacity planning.


TheInfoPro’s respondents had the following comments about capacity planning tools:

  • “[Pain point:] Capacity planning, making sure we have capacity in place for needs of the business. We’re using custom homegrown tools and just starting to deploy a new tool, vCOps from VMware, to help with that. But the tool doesn’t exactly do everything – no tool does – so we’ll continue the homegrown pieces.” – LE, Other
  • “Capacity planning is definitely one [pain point], across any of our storage platforms. A lot of our projects are bursty, so we have busy seasons and low seasons. Nothing’s linear, it’s kind of hit and miss.” – LE, Education
  • “It’s hit or miss right now, maybe some spreadsheets and manual processes.” – LE, Financial Services
  • “Not consolidated – several tools used ad hoc.” – LE, Healthcare/Pharmaceuticals
  • “The tools are in place, they are running, but not used today. The processes don’t use the data that the system provided.” – LE, Industrial/Manufacturing

Diversifying into WAFs

August 22nd, 2014 by AnnMarie Jordan

Daniel Kennedy, Research Director for Information Security

Qualys, the Wave 16 Information Security Study leader in vulnerability assessment solutions, mentioned in its recent earnings call the need to diversify its security offerings, harking back to last year’s announced entry into the Web application firewall (WAF) space. Largely driven by compliance standards such as PCI, as well as situations where an application’s code is not accessible for hardening, WAFs were again the fastest-growing application security technology in Wave 16. Based on the reported plans of respondents in the study, WAFs have the potential to grow another 10 percentage points into new enterprise installations over the next couple of years. The closest other application security tool in terms of new growth is code or binary analysis, which shows potential growth of 8 percentage points. Twenty-four percent (24%) of respondents having or putting a WAF in place reported plans to increase investment in the category.


Leadership in the WAF category changed from Imperva to F5 Networks, as foreshadowed in Wave 15, and 2014 does not see that order changing as F5 Networks continues to show growth in new installations. Of course the listing of Palo Alto Networks by security managers, a vendor with no offerings in the category, reflects the continuing marketplace confusion between what constitutes an application-aware firewall vs. a Web application firewall.

Security respondents had the following to say about WAF solutions:

  • “More from a compliance position than a tactical security position [was the reason for installing a WAF].” – LE, Services: Business/Accounting/Engineering
  • “Looked at Imperva; we liked it, but there are some collateral issues with the product.” – LE, Financial Services
  • “F5, I like their Web application firewalls.” – LE, Industrial/Manufacturing
  • “Application firewall, trying to get it to work. We’re using Citrix or NetScaler. It’s a Web application firewall.” – LE, Education

Cloud creates exciting opportunities for vendors large and small

August 20th, 2014 by AnnMarie Jordan

Peter ffoulkes, Research Director for Servers and Cloud Computing

There is little debate about the significance of the transition to cloud computing-based delivery models that is, and will be, driving activity across the IT industry for the foreseeable future. As enterprises of all sizes select the best execution venues for their varying categories of workloads, we expect to see a spread of deployments across on-premises private, hosted private, hybrid and public clouds.

Exciting vendors, technologies and initiatives

This journey to the cloud is creating disruption and opportunity for technology and service providers alike, for well-established companies as well as smaller, emerging vendors and startups. Most organizations are still in the early stages of their cloud initiatives and are becoming increasingly aware of the complexity of building out a global cloud-based IT infrastructure and associated services.

A common thread in TheInfoPro’s surveys is to ask respondents about exciting vendors that have captured their attention in the past 12 months. For the cloud surveys, we have included technologies and initiatives as well so that we don’t ignore some of the open-source activities or other developments that may have a significant contribution to make. The following chart gives an idea of the extent of the organizations that are perceived as playing an important role.


Anecdotal commentary illustrates some of the opinions expressed by TheInfoPro respondent community:

  • “I am interested in OpenStack, I like the seamless capability between on premise and cloud.” – LE, Consumer Goods/Retail
  • “Ceph that Red Hat bought.” – MSE, Education
  • “Obviously we’re excited about NSX. Network and security virtualization. Cisco has a competing product, ACI, but it’s still reliant on placement of a hardware device. But I think that’s the exciting part right now, to be able to extend the benefits that have been already realized through compute and storage into other critical services.” – LE, Consumer Goods/Retail
  • “AWS leads the charge. They have the footprint to deliver and the certifications to deliver. And they also are kinda like the bellwether for the realistic availability criteria throughout the industry. Anybody who thinks of going to the cloud 100% is deluded; understanding they seem to be more open with ‘Oops, we propagated a switch and it went berserk,’ ‘Oops, our SAN went offline for XYZ reason.’ That’s what I appreciate, the honesty and the openness. I’m a techie, and that makes sense. Applications that go to the cloud for us are not mission-critical.” – LE, Energy/Utilities
  • “CloudSoft has the dashboard we’ve been looking at. Big [discussion] one for us is private cloud vs. public cloud. We’ve got datacenters and global coverage. We have the infrastructure, no one else can really offer but the cost of running that sort of stuff is astronomical. Can we use public cloud for marketing apps, management apps? Stuff that may have gone onto very low priority systems in-house. Obviously all the big players – IBM SoftLayer, lots of interesting offerings, looking to see if we can offer public cloud under the guise. [Only thing in public cloud is event sites.]” – LE, Financial Services
  • “Being able to do things like or Dropbox for business. We’re excited about expanding our end users’ C drives. Without our intellectual assets leaving the company each day.” – MSE, Services: Business/Accounting/Engineering
  • “On the OpenStack side, I’m a big fan of Metacloud. The new HP cloud entry is interesting. Dell’s Enstratius is pretty cool. I like RightScale too.” – LE, Telecom/Technology

EMC takes the lead in strategic AFA technology

August 18th, 2014 by AnnMarie Jordan

Marco Coulter, Research Director for Storage

The all-flash array (AFA) took the number one position on TheInfoPro’s Wave 18 Storage Technology Heat Index. This year, EMC stepped up to become the most selected vendor for production use of AFAs, placing it ahead of previous leader Violin Memory. With only 8% already using the technology, the opportunity for growth is significant. The limited adoption to date, and significant plans this year, leave an opportunity for other vendors to potentially wrench the lead away, and we will be watching the segment closely.

2014 is the year that enterprises are getting serious about investigating AFA technology. The 22% of enterprises that are piloting or planning to deploy the technology is a significant increase over the 9% of the previous year. Per our narratives, an inhibitor to adoption remains the perception (and sometimes reality) of high total cost of ownership for AFAs.


Deployments of AFAs in enterprises are mainly a reaction to business applications running slow. Moving the workload to an AFA can be the fastest way of addressing applications’ slowdown. The workloads that are transferred to flash currently are predominantly database, followed by VDI.

We have seen the focus on performance increase significantly between studies: 73% now have a specific I/O performance requirement in their enterprises, up from 52% in the prior year. Of those with a specific requirement, 47% cared about IOPS-related performance metrics. Only 27% identified latency-based requirements that may tend toward server-side flash resolution.

Given the significant plans appearing for Pure Storage and IBM, EMC’s continued lead is not a certainty, though the arrival of the storage incumbent at the top of this technology chart will make displacing it an interesting challenge for emergent AFA vendors and incumbents alike.

  • “EMC makes a good, solid product. They are the leading supplier in the storage market. … I like that they are moving into the all-flash-array market, I think this will help to remove the vendors that should go away.” – LE, Industrial/Manufacturing
  • “People say, ‘I want an all-flash array.’ We tell them ‘that’ll be $5m.’ [Then they say,] ‘I don’t want an all-flash array.’ Everybody wants the functionality, but they don’t want to fund it.” – LE, Financial Services
  • “We did look at ‘em [AFAs] that was Violin; no way I could justify that money. It was overkill for what we need. We went with 3PAR instead.” – LE, Education
  • “Won’t switch [from current array] but will augment with all-flash array.” – LE, Financial Services

Cloud Platforms: Will Juno become the ruler of the cloud gods?

August 15th, 2014 by AnnMarie Jordan

Peter ffoulkes, Research Director for Servers and Cloud Computing

According to Roman mythology Juno was the goddess of marriage and queen of the gods, the protector and special counselor of the state. Juno is also the project name for the next release of OpenStack, expected in October this year. If the state we are headed toward is some form of cloud computing, then the role that Juno will play becomes an important consideration.

Cloud Platforms lead the heat index

In Servers and Virtualization Wave 13, cloud platforms were in the top position on the TheInfoPro technology heat index, indicating that this was going to be strategic decision for survey respondents to make in the next two years based on spending intentions weighted by the size of their budget. A big deal in other words.

Part of the problem is that this is an extremely dynamic market, some survey results are valid over a year-long cadence or more, and some have the shelf life of a banana, to quote Scott McNealy, founder and ex-CEO of Sun Microsystems. With that in mind, the following chart is a preview of cloud platform data from our as yet unpublished Cloud Wave 7 survey.

The results are consistent with our prior server and cloud surveys, but also reflect the fast-changing market dynamic. VMware still has the market opportunity for both in-use and in-consideration mindshare, but current usage is no guarantee of future dominance in such a dynamic, emerging and volatile marketplace. OpenStack as a technology is less widely used than either Microsoft or Citrix offerings but has greater mindshare as a platform for future consideration. This observation does not take into account that specific vendor mentions such as Cisco, HP, IBM, Red Hat and even VMware (in alphabetical order) may be additive to the momentum behind the OpenStack technology base. In addition there are a host of other players that merit discussion beyond the scope of this document.


Will Juno become the ruler of the cloud gods? It’s too early to say, but she will have influence. She already holds a matriarchal position, and her progeny may well become rulers of the ‘cloudverse’ one day. Anecdotal commentary illustrates the feelings about cloud platforms and OpenStack expressed by TheInfoPro respondent community:

  • “Developing OpenStack virtualization ourselves – save cost. We don’t need to spend money with VMware if we can derive same benefits from OpenStack.” – LE, Business/Accounting/Engineering
  • “We have had conversations with Red Hat so far for OpenStack.” – LE, Financial Services
  • “OpenStack – when a giant hardware vendor gets behind it, it will really take off.” – LE, Consumer Goods/Retail
  • “But if it [VMware] starts costing money, it’ll be the first to go. Everything is going OpenStack. Who knows where it’ll go.” – LE, Transportation
  • “VMware still has a technical edge, and they have not priced themselves out of the market… yet. I think that we will look at OpenStack and Microsoft because we are cost-conscious.” – LE, Consumer Goods/Retail

Switch upgrade replaces wireless as most common networking project in 1H 2014

August 14th, 2014 by AnnMarie Jordan

Nikolay Yamakawa, Analyst for TheInfoPro

Wireless-related projects are not as common now as they were last year in large and midsize enterprises, while switch upgrades and more general network refresh have gained traction between the studies. The results from the recently completed Wave 11 Networking Study show that switch upgrades have replaced wireless as the most common top networking project, with 19% of selections in 1H 2014, up from 14% in the prior study. After a significant drop from 25% of selections in 1H 2013 to 16% now, wireless is now sharing second place with network refresh. The drop in selections for wireless-related projects between the studies suggests that it may take a longer time for the new 802.11ac wireless standard, which continues to be in high demand, to convert future project plans into in-use implementations. A recently published 451 Research report, titled ‘The new 802.11ac standard prepares to take the relay baton from 802.11n,’ discusses the transition from 802.11n to the 801.11ac next-generation wireless network.

Router upgrade was a new entrant to the list of top networking projects in 1H 2014, with 7% of selections. This is similar to capacity upgrade and network segmentation, which have also gained traction between the studies to be included on the list, with 7% and 6% of selections respectively. We have seen before that useful life of equipment is most commonly in a five- to six-year range, and some of the changes in the list of top networking projects this year can be attributed to the equipment’s end of life (EOL) and regulatory compliance requirements, such as PCI.


Networking managers had the following comments about top projects at their enterprises:

  • “PCI compliance. Made a large investment in equipment to secure the hardware a bit better. We purchased a lot of new switches. Our old switches couldn’t do much with security features. Also purchased next-gen firewalls for the edge.” – LE, Consumer Goods/Retail
  • “Refresh – our networking switches, core and access – everything that’s gone EOL.” – MSE, Consumer Goods/Retail
  • “Refreshing network infrastructure for new top-of-rack switching to give us better coverage for 10Gig Ethernet in the top of the rack.” – LE, Other
  • “Looking possibly within next 12 months to moving a datacenter to a new building.” – LE, Other

Security regulatory control is… appropriate?

August 12th, 2014 by AnnMarie Jordan

Daniel Kennedy, Research Director for Information Security

Perhaps perceptions toward regulatory requirements that drive security controls are not so rosy, but 37% of information security managers interviewed in the 16th Information Security study do believe the level of regulation their security program faces to be appropriate. That must be considered against a full 52% saying that the regulations they face are either overbearing (29%) or rigid (23%). The issue of course is that the regulatory hammer is meant to set a baseline for appropriate security controls for different industry verticals, but that level of control can either be too loosely defined (GLBA), too narrowly construed (PCI), or accompany severe repercussions (SOX).


Reflecting the publicly traded status of many of the large enterprises interviewed, security requirements outlined in Sarbanes-Oxley controls were cited by 67% of interviewees as affecting their security program. Payment Card Industry (PCI) and HIPAA round out the top three choices, and the security requirements of the Gramm-Leach-Bliley Act (GLBA) put upon financial institutions also received a significant number of mentions.

Security respondents had the following to say about their regulatory challenges:

  • “How to develop practical, reality-based metrics for security? How to present a compelling case for security projects and implementation? Risk assessment is key, rather than focus on privacy or a particular regulation.” – LE, Financial Services
  • “Sarbanes-Oxley, SEC regulations for publicly traded companies, privacy laws are the other big one for international, European privacy laws.” – LE, Financial Services
  • “We are anticipating a bump due to regs in the next year or so, but I have no faith it will actually happen. DoD regulations – there are a lot of them; a minimum of 200 of them.” – LE, Telecom/Technology
  • “We’re a fairly large mature organization, so some projects are ROI-based, and there are compliance-based projects. And then there’s paying attention to regulation and industry and government.” – LE, Industrial/Manufacturing
  • “Our policies are standard and straight-forward, very black-and-white. Most of them driven directly by regulation. Some redundant tasks (like audits) can lack a little in quality.” – LE, Telecom/Technology

The flattening storage budgets of 2014

August 5th, 2014 by AnnMarie Jordan

Nikolay Yamakawa, Analyst for TheInfoPro

In a recent Thursday TIP, we examined the storage budget as a portion of IT spending with a view to industry verticals. This report drills into the storage budget specifically. The results of the recently completed Storage Wave 18 Study show that 38% of respondents plan to increase storage budgets in 2014, while 25% plan to cut budgets, and an additional 37% have flat budgets in plan. Although more storage professionals from large and midsize enterprises report budget increases than budget declines for 2014, this picture may be may be rosier than the reality when we consider the magnitude of these changes. Those indicating vendor spending increases were often in the 5% to 10% range, although some did plan increases of over 50%. On the other hand, those forecasting budget declines were predominantly in the 25% to 50% range. The storage outlook in 2014 is tight, and the benefits of optimization technologies – discussed in Optimization technologies thrive as search for efficiencies spreads to investment choices (client log-in required) – may be approaching exhaustion.


Refresh negotiations will be tougher for both vendors and enterprises. Vendors should expect to see lesser known competitors on short lists to be considered as ‘equals’ since enterprises see ‘good enough’ offerings as sufficient for lower tiers of storage. Alternatives may not have full enterprise management capabilities but have acceptable price points.

Changes in storage budgets are starting to affect not only purchasing decisions, but also team structures, as spending on third-party services continues to rise. Given that structures are moving to outsource or offshore vendor-specific skills from storage teams, vendors may be able to find some benefit from this trend. For clients who want to see how this budget trend will impact the major vendors, the It is not just storage – overall budgets are shrinking even faster (log-in required) report drills into the details.

Wave 18’s study participants had the following commentary about their budgets at their enterprises:

  • “[Top pain point is] the budget. Getting funding for forklift upgrades, storage refreshes, and then trying to get enough money to continue with the ongoing growth. It’s a double-edged sword, and it cuts both ways.” – LE, Telecom/Technology
  • Regarding IT team structure changes: “There’s been more offshoring consultants hired. A lot of replacing of full-time staff with FT temps. Some support satellite offices. The goal was to reduce the budget costs of FTE.” – LE, Financial Services
  • “Budgets are decreasing, no one wants to spend money.” – LE, Healthcare/Pharmaceuticals
  • “We are asked to retain spending at the same level going forward.” – LE, Telecom/Technology