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IDC FutureScape: Worldwide Datacenter 2016 Predictions

APEJ Implications

Avneesh Saxena, Jun Fwu Chin,

Richard Villars, Glen DuncanJanuary 2016

An IDC Excerpt

Please refer to www.idc.com for the worldwide report #259808 & #AP40437115

In This StudyThis IDC study provides IDC's top 10 Asia/Pacific (excluding Japan), or APEJ, predictions for the 2016 IT buyer when it

comes to understanding and investing in their own datacenter facilities and staff as well as datacenter facilities offered by

third-party service and network providers. These predictions provide the strategic context to enable APEJ enterprises to

consider the overall impact of developments such as business model disruption through digital transformation of industries,

globalization and shifts in populations, software-defined compute, and the growing use of cloud storage. This document

offers the collective understanding of IDC worldwide and APEJ analysts regarding major industry transitions. It also offers

advice to IT buyers to consider in their strategic planning in relation to datacenter facilities and IT infrastructure investment

and operations.

This document offers IDC analysts' collective understanding of major industry transitions and advice to

IT buyers to consider in their strategic planning in relation to datacenter facilities and IT infrastructure

investment and operations. We advise decision makers to approach each prediction in three steps:

Assess its relevance: Should I pay heed to this prediction? Does this prediction apply to me?

Can I reasonably enough ignore it? What do I risk if I ignore it? Strategy is, after all, as much

about what you decide to do as what you decide not to do.

Assess its urgency: Does it apply to me now or in the future? If it applies in the future, when do

I have to get started to deliver enabling capabilities as needed?

Assess its resource requirements: What resources do I need and at what costs? What would I

have to forego or postpone to achieve the capability? What do I have to speed up to achieve

it? What priority does this prediction have relative to other projects consuming resources?

In the following slide, Figure 1 presents IDC's Datacenter top 10 predictions in terms of their likely impact across the

enterprise and the time it will take for the predictions to reach mainstream. By mainstream, IDC means the broad

middle of the bell curve of adoption (i.e., the 40–60% of enterprises that are neither the first movers and early adopters nor

the last to act). Each bubble's size provides a rough indicator of the complexity and/or cost an enterprise will incur in acting

on the prediction.

© IDC Visit us at IDC.com and follow us on Twitter: @IDC 2Source: IDC #259840

IDC FutureScape: 2016 Datacenter Predictions

Asia Pacific (excluding Japan) Implications

© IDC Visit us at IDC.com and follow us on Twitter: @IDC

Worldwide APEJ

TIME (MONTHS) TO MAINSTREAM

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Network Transformation

WorkloadRealignment

Diversified IT

Smart Datacenters

Next-Gen Power

Hyperconvergence& SDI

3rd Platform Finance

Datacenter Obsolescence

Edge IT

Hyperscale Datacenters

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Workload realignment

FIGURE 1

Note: The size of the bubble indicates complexity/cost to address. Source: IDC, 2015

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10

By 2018, 50% of new datacenter infrastructure investments

will be for systems of engagement, insight, and action rather

than maintaining existing systems of record.

By 2017, next-generation converged systems that are

optimized for flash and SDI will drive >18% of consolidations

in internal datacenter space and staff.

Datacenter Obsolescence — By the end of 2018, 40% of

businesses will confront facilities mismatches and change

climate risk profiles, reducing spend on upkeep of existing

datacenters.

By the end of 2017, hyperscale-based infrastructure

providers will extend dense compute and deep storage to

regional gateway facilities to address data sovereignty fears.

By 2018, 48% of companies' IT assets will be offsite in

colocation, hosting, and cloud datacenters while 1/3 of IT

"staff" will be employees of third-party service providers.

By 2018, 45% of companies will rely on highly instrumented

datacenters that use advanced automation to boost

efficiency and tie datacenter and IT spend to business value.

By 2018, 50% of enterprises will transform their networks

with SDN-based, flexible networking to connect

diversified IT environments and facilitate new data flows.

By 2018, cloud, mobile and IoT services providers will

own/operate 30% of IT assets in edge locations and micro

datacenters, posing major asset and governance challenges.

By the end of 2016, 25% of companies will demand payment

models based on usage for major IT and datacenter

investments, basing vendor decisions on these programs.

In 2018, 8% of new datacenters will be powered by green

energy while improvements in cooling technology and rack

architectures will continue to improve energy efficiency.

Source: IDC FutureScapes, November 2015

4

By 2018, 50% of New Datacenter Infrastructure Investments Are for Systems

of Engagement, Insight, and Action Rather Than Maintaining Existing

Systems of Record

Many existing datacenters were built to support 2nd Platform workloads focused on bottom-

line efficiency-oriented systems of record. Systems of record are internal-facing/-bounded

and focus on automating back-office operational processes through software such as ERP.

3rd Platform technologies such as the cloud and mobility afford the IT executive new

opportunities to support top-line business value–oriented workloads around systems of

engagement, systems of insight, and systems of action. These systems are external-facing

and have a broader scale. In APEJ, adoption of each of these systems is accelerating.

New datacenter infrastructure investments will increasingly be focused on client-facing and

analytical workloads that enhance organizational competitive advantage. Businesses

seeking to connect with a global web of mobile-enabled customers will require a web of

interconnected datacenter facilities. This web will be a physical geographical footprint and

need to include the critical developing countries of China and India within APEJ. However,

most corporate datacenters are in the wrong places with limited network choice and

connectivity. In addition, most corporate datacenters don't have the room for all the compute

and storage needed to deliver, process, and analyze all the necessary content/data.

Prediction #1: Workload Realignment

5

By 2018, 50% of New Datacenter Infrastructure Investments Are for

Systems of Engagement, Insight, and Action Rather Than Maintaining

Existing Systems of Record

IT impact • More frequent turnover of applications as well as changes in data formats and data sources, driven by expansion in mobile and IoT applications.

• Rapid application development, massive storage management, and requirements for new analytics capabilities challenge IT staff.

• Greater reliance on third-party datacenter operators and cloud facilitators to address service expansion and performance requirements for outward-facing applications, primarily mobile.

• IT will increasingly be seen as a strategic partner by LOB necessary to drive business value and competitive advantage rather than as a cost center to be minimized.

• Information available for analysis and decision making will be richer, more varied, and more customer-centric rather than merely operationally focused.

• Relationships with customers will become more highly coupled and cohesive.

• Systems of record will often not initially integrate with systems of engagement and systems of action, creating “siloed” visibility for LOB.

Prediction #1: Workload Realignment

BU impact

6

Essential guidance for tech buyers

• Develop organizationwide IT resource requirements for compute, storage, and networks throughput based on logical capacity required, not physical assets owned.

• Realign capacity planning, budgeting, and chargeback processes to accommodate “bursty” and limited duration demands for compute, storage, and network resources.

• Assess colocation, hosting, and cloud partners based on their ability to provide insights into current and historical asset use.

Prediction #1: Workload Realignment By 2018, 50% of New Datacenter Infrastructure Investments Are for

Systems of Engagement, Insight, and Action Rather Than Maintaining

Existing Systems of Record

7

By 2017, Next-Gen Converged Systems That Are Optimized for Flash and SDI

Will Drive >18% Reductions in Internal Datacenter Space and Staff

The ongoing business demands and IT challenges are forcing IT organizations to dramatically

change the way they deliver IT infrastructure. The increasing awareness of the benefits of a

cloud environment result in a push toward the adoption of cloud-scale infrastructure.

Hyperconvergence and SDI are a new trend in the IT infrastructure market as legacy IT

infrastructure is not able to deliver cloud-scale capabilities in enterprises. Hyperconverged

infrastructure and SDI are increasingly being looked at as building blocks of a new generation

of datacenters, such as software-defined datacenters or default infrastructure for cloud.

Hyperconvergence brings to enterprise IT a cloud-like economic and operational model that

provides faster time to value for datacenter expenditures and lower total cost of ownership for

the entire solution.

Most businesses now believe that they can meet their internal IT capacity needs based on

continued increases in processor capacity combined with the growing use of virtualization,

hyperconverged systems, and solid state. These developments will enable them to reduce IT

asset spending in their internal datacenters, shifting more spend to IT assets in externally

owned and operated datacenters. They also believe that adoption of these new, more

automated solutions will significantly reduce required IT staff needs. In many cases, they will

seek to further reduce staff via greater use of managed services.

Prediction #2: Hyperconvergence and SDI

8

IT impact • Radical shift in IT resources used to extend existing datacenters versus use of equipment in third-party datacenters changes datacenter infrastructure and asset management behaviors.

• Growing tendency to leverage managed services when onboarding new IT systems versus retraining existing IT staff.

• Increased risk of not adhering to asset tracking and management standards prolongs “siloed” areas of IT (good management practices only implemented on “new” equipment).

• Organizations that are still supporting legacy infrastructures face several barriers to business agility, including slow service provisioning, inability to ramp capacity quickly, and spending too much time managing datacenter infrastructure.

• Shifts toward hyperconvergence and SDI will enable the creation and delivery of thousands to millions of high-value, industry-transforming solutions and services. They will also drive the development of entirely new business models, altering and improving customer experience, and delivering vastly new insights that are the sources of competitive advantage.

BU impact


By 2017, Next-Gen Converged Systems That Are Optimized for Flash and

SDI Will Drive >18% Reductions in Internal Datacenter Space and Staff

9


• Implement aggressive standardization policies for IT HW and SW assets to improve asset management practices and regulatory compliance.

• Implement an enterprisewide infrastructure management practice to view available resources and plan for future capacity.

• Select converged and software-defined environments that include technology to automate the discovery and location of IT assets.


By 2017, Next-Gen Converged Systems That Are Optimized for Flash and

SDI Will Drive >18% Reductions in Internal Datacenter Space and Staff

10

By the End of 2018, 40% of Businesses Will Confront Facilities Mismatches

and Change Climate Risk Profiles, Reducing Spend on Upkeep of Existing

Datacenters

Many businesses already have significant investments in existing datacenter facilities.

Typically these facilities have been designed to support 2nd Platform environments.

Businesses have been sweating these existing assets because of the significant sunk

costs. However, many of these facilities are now unsuitable for 3rd Platform

environments. They lack the power, cooling, network connectivity, and security

required to support traditional, integrated, hyperconverged, and software-defined

infrastructure necessary for the new systems of engagement, insight, and action. Often

these datacenters are also no longer in the right location. Rather than refit existing

facilities, businesses will continue to allow their internal datacenter facilities to slowly

age out. Spend will be redirected toward third-party services such as colocation and

service provider, systems integrator, and cloud provider hosting.

Climate change is also influencing organizational perceptions about risk of datacenter

locations. Rising sea levels and tsunami-based disasters have threatened the viability

of current and future locations particularly for regional-centric organizations.

Healthcare, government, and manufacturing, especially those near large costal urban

areas have been reconsidering location.

Prediction #3: Datacenter Obsolescence

11

IT impact • Capex and opex levels draw increased C-level attention and impacts IT administration staff morale.

• Illuminates need to improve capacity planning that’s better aligned with actual needs, not perceived needs while also taking a deeper look at implications of sea level change on risks.

• Provides strong impetus for organizations to look to colocation for future DC services, but third-party datacenter ecosystem remains heterogeneous with local/national/international footprints.

• LOB with capex-oriented financial structures will need to make the systemic, governance, and cultural shift to accepting opex-oriented financing.

• From a corporate governance perspective, climate change is an acknowledged risk that needs to be mitigated for reporting purposes.

• The maturation rate of the provision of infrastructure by IT will not always match what is required by LOB for systems of engagement, insight, and action. LOB will need to be patient at times as it waits for IT to catch up. At times, critical new systems will need to be prioritized.

BU impact

Prediction #3: Datacenter Obsolescence By the End of 2018, 40% of Businesses Will Confront Facilities Mismatches


Datacenters

12


• Make greater use of DC infrastructure management solutions to locate, identify, and redeploy underutilized resources.

• Re-evaluate power and cooling design within datacenter to identify areas for increased efficiency.

• Identify and evaluate colocation providers to address future need for IT resources based on capacity, reduced risk, and geographic expansion requirements.

• Develop IT staff retraining and repurposing programs to better prepare staff for future roles.

Prediction #3: Datacenter Obsolescence By the End of 2018, 40% of Businesses Will Confront Facilities Mismatches


Datacenters

13

By 2017, Hyperscale-Based Infrastructure Providers Will Extend Dense

Compute and Deep Storage to Regional Gateway Facilities to Address Data

Sovereignty Fears

The new workloads associated with systems of engagement, insight, and action are

highly variable in nature. They have short, useful lives and are quite bursty by design.

Rather than directly deal with the capacity planning issues posed by these applications

as they expand to support growing mobile user populations in urban areas, businesses

are choosing to adopt consumption-based models for infrastructure use. This cloud-

based infrastructure is being provided by a small number of service and cloud providers.

Companies such as Apple, Facebook, Google, Amazon, Alibaba, and Microsoft are

designing specialized facilities of such scale, sophistication, and cost that they are best

described as “data factories.” These datacenters account for just 2% of datacenter

space but already hold more than 20% of all servers installed in datacenters.

In order to connect with a global web of mobile-enabled customers, cloud services need

to be part of a web of interconnected datacenter facilities. In this footprint, physical

location matters. IT still likes to be able to touch or at least know where the physical

infrastructure is. Physical location also feeds into concerns about sovereignty, security,

latency, which often are framed by government regulation.

Prediction #4: Hyperscale Datacenters

14

IT impact• Hyperscale datacenters are increasingly where the data lives, the compute

resides, and SaaS applications run.

• Hyperscale is the go-to option for early access to new compute, storage, and data management technologies.

• Datacenter interconnect to large central hyperscale facilities and new, smaller hyperscale microdatacenter sites affects datacenter selection criteria.

• Companies operating in APEJ that collect, store, and use personal information will face increased regulation and compliances issues as the data protection, sovereignty, and privacy regimes of governments mature.

• Regulatory regimes vary across countries in APEJ and from a risk and governance perspective, the LOB needs to be aware of variations as well as the varying cross-border data transfer guidelines.

• It is critical for the LOB to build compliance positions in order to avoid regulatory penalties. In this context, the LOB is quite broad and can include legal, risk managers, HR, auditors, and purchasing managers.

BU impact

Prediction #4: Hyperscale DatacentersBy 2017, Hyperscale-Based Infrastructure Providers Will Extend Dense


Sovereignty Fears

15


• Identify a use case where “hyperscale-first” is the preferred option for application development and deployment.

• Identify critical data sets where the ability to access more localized hyperscale facilities will speed time to market.

• Assess hyperscale suppliers based upon their agility in service upgrades and pace of expansion in geographic reach.

Prediction #4: Hyperscale DatacentersBy 2017, Hyperscale-Based Infrastructure Providers Will Extend Dense


Sovereignty Fears

16

By 2018, 48% of Companies' IT Assets Will Be Offsite in Colocation, Hosting, and Cloud

Datacenters While 1/3 of IT "Staff" Will Be Employees of Third-Party Service Providers

The 3rd Platform environment is one of increased complexity. New cloud-based systems

of engagement, insight, and action require implementation and management. These

systems in turn require integration with legacy systems of record, predominantly 2nd

Platform on-premises environments. Service providers, systems integrators, and cloud

providers are building out datacenters and points of presence to support their customers'

demand for IT facilities optimized to support fast-growing systems of engagement,

insight, and action. Though more prominent in mature markets such as Australia,

Singapore, and Hong Kong today, diversified IT will eventually become a norm in most

markets in AP.

The future model of IT organizations will go beyond hybrid cloud to operating diversified

IT environments encompassing a range of deployment models (on-premises and off-

premises) and a broad portfolio of SaaS and IaaS cloud services. IT organizations will

manage distributed assets across multiple internal and third-party datacenters. They will

also need to be able to implement hybrid IT operations and governance models that

bring in the assets, technology capabilities, and expertise of external managed services

providers. Many IT departments will struggle in this new role and will increasingly look to

service partners for the requisite support.

Prediction #5: Diversified IT

17

IT impact • The role of IT department shifts from procurement to the administration and orchestration of internal and externally-sourced IT assets and functionality with increasing degrees of co-management along with third-party service providers.

• Internal datacenter-based IT assets are becoming increasingly software-defined, providing IT organizations with more flexible services-oriented capabilities abstracted from asset ownership and physical hardware.

• Service provider and enterprise datacenters adopt low-cost, modular designs that are energy-efficient and offer superior automation and standardization.

• IT will increasingly be seen as a strategic partner by the LOB, necessary to drive business value and competitive advantage rather than as a cost center to be minimized

• IT departments need to devote less time managing day-to-day operations and more time building next-generation services that help grow the business. Diversified IT will offer the IT department to devote more time on innovation.

• Help building IT solutions that are tuned for business.

BU impact

Prediction #5: Diversified ITBy 2018, 48% of Companies' IT Assets Will Be Offsite in Colocation, Hosting,

and Cloud Datacenters While 1/3 of IT "Staff" Will Be Employees of Third-

Party Service Providers

18


• Develop and continuously refine best practices for service provider selection, governance, and performance while identifying and incentivizing key internal staff that can minimize reliance and dependence on a specific service provider skill set, should shifts in partner be required.

• Implement a consistent management, security, and governance framework for IT environments featuring diversified and distributed IT assets, capabilities, and service providers.

• Seek service providers that can act as digital transformation partners offering cloud and hosted services with a range of resource tenancy and management options as well as transition assistance related to financing, network rationalization, and integration across diverse IT environments.

• Regularly engage with third-party service providers to assess the compatibility of their business and product strategy road maps with your IT transformation objectives.

Prediction #5: Diversified ITBy 2018, 48% of Companies' IT Assets Will Be Offsite in Colocation, Hosting,

and Cloud Datacenters While 1/3 of IT "Staff" Will Be Employees of Third-

Party Service Providers

19

By 2018, 45% of Companies Will Rely on Highly Instrumented Datacenters

That Use Advanced Automation to Boost Efficiency and Tie Datacenter and IT

Spend to Business Value

A key trend in the IT industry is convergence. This trend extends into the datacenter

with building management systems and datacenter information management systems

that are now integrating with software-defined infrastructure. Workloads and services

are becoming increasingly complex and distributed across multiple datacenters in

diverse geographic locations. It is therefore becoming necessary for the environment

to be simplified into a “single pane of glass.” Organizations need to manage all IT

resources (including the facility) remotely and in a lights-out fashion.

IT and datacenter facility infrastructure such as servers, storage, network equipment,

racks, and cooling and power systems can be considered “Things" in the Internet of

Things framework. Companies attempting digital transformation of their business and

service provider relationship are showing strong interest in increasing the automation

and efficiency of "things" in the datacenter. Combined building management,

datacenter information management, and software-defined infrastructure systems are

generating diverse and rich data that can be used to drive proactive maintenance and

dynamic adjustment of the environment to increase efficiency.

Prediction #6: Smart Datacenters

20

IT impact• IT for internal datacenters is purchased and managed by fewer players, with a focus

on squeezing efficiency out of IT.

• Brand becomes less important in IT HW and SW decisions, while service becomes more important.

• Spending on sensors and advanced automation tools within datacenters and edge IT locations increase as they shift to being viewed as necessary and enabling technologies, as opposed to “nice to have” technologies.

• Security concerns spur increasing focus on providers with proven track records in industrial automation projects.

• The LOB will need to work closely with IT to continually review those workloads that are contributing to business value and those that are not given the new visibility.

• Help take the learning from the datacenter to apply on services rendered to customers.

• Increase speed of information and ensuing decisions as IT becomes smarter and more predictable.

BU impact

Prediction #6: Smart DatacentersBy 2018, 45% of Companies Will Rely on Highly Instrumented Datacenters



21


• Rationalize and support ongoing and new IT projects by making greater use of software that enables granular reporting on total costs related to IT.

• Develop new criteria for selecting service partners to manage IT and identify the skill sets required from those service providers to speed up internal business transition.

• Look for automation tools and sensors that work well with existing datacenter infrastructure management (DCIM) and systems management software as well as building management systems that don’t require set up of a separate monitoring system.

Prediction #6: Smart DatacentersBy 2018, 45% of Companies Will Rely on Highly Instrumented Datacenters



22

By 2018, 50% of Enterprises Will Transform Their Networks with SDN-Based, Flexible

Networking to Interconnect Diversified Environments and Facilitate New Data Flows

True software-defined networking was not possible until recently. Now it is possible to more

tightly integrate applications, servers, and network infrastructure than ever before. The network

will be a pivotal part of this. Future software-defined networks will be on-demand, instantly

provisioned, flexibly controlled, connected to hybrid cloud ecosystems, and carrier-neutral.

New systems of engagement, insight, and action are built upon the technological pillars of the 3rd

Platform. They require a realignment and rebalancing of workloads, datacenters, and IT assets

that will bring about changes to enterprises' wide-area network (WAN) architectures. Network

traffic will shift from being intra-WAN to moving between the WAN and external datacenters and

from the datacenter to the edge. This will require software-defined virtualized networking in

datacenters and core networks.

The expansion of hybrid, and then diversified, IT environments will dictate a more dynamic, on-

demand networking approach as organizations' end users require flexible connectivity and

bandwidth capacity to IaaS and SaaS services housed in external datacenter facilities. This level

of flexibility and agility will be required for an organization to survive in today’s globalized,

hypercompetitive environment.

Prediction #7: Network Transformation

23

IT impact • The transition to diversified/hybrid IT requires more flexible networking capabilities in both the datacenter LAN and enterprise WAN.

• Automation and virtualization of network functions boosts the need for dynamic interconnections within digital business ecosystems, linking end users to IT resources, applications, and data distributed across internal datacenters, external colocation facilities, and third-party clouds.

• The next phase of IT transformation takes place in the network as IT organizations incorporate SDN and NFV technologies and services into their datacenter LAN and enterprise WAN environments.

• Software-defined networking is part of the broader trend to make the management of IT infrastructure easier and more efficient so that IT can focus more on business needs.

• Software-defined networking will contribute to a more agile business capable of aligning its offerings with a constantly changing marketplace.

• Software-defined networking will give the business better visibility on the relationship between IT spend and consumption and the creation of business value.

• Software-defined networking will provide wider coverage, speed to market while reducing costs and enabling real-time provisioning

BU impact

Prediction #7: Network TransformationBy 2018, 50% of Enterprises Will Transform Their Networks with SDN-Based,

Flexible Networking to Interconnect Diversified Environments and Facilitate

New Data Flows

24


• Develop investment plans for network and datacenter convergence with an eye toward supporting business requirements throughout the organization such as SaaS access and usage, business units' IoT initiatives, and mobile app usage.

• Work closely with service providers to enable secure, performance-optimized multi-cloud connectivity throughout the organization, particularly in branch office locations and for mobile end users.

• Ensure that cloud networking solutions incorporate security, visibility, governance, and policy control elements.

Prediction #7: Network TransformationBy 2018, 50% of Enterprises Will Transform Their Networks with SDN-Based,

Flexible Networking to Interconnect Diversified Environments and Facilitate

New Data Flows

25

By 2018, Cloud, Mobile, and IoT Services Providers Will Own/Operate 30% of

IT Assets in Edge Locations and Micro Datacenters, Posing Major Asset and

Governance Challenges

The proliferation of sensors associated with the buildout of the Internet of Things as well as

mobile devices and cloud-based services used by both customers and employees, are all

redefining what the edge of an organization means. The new edges of an organization are

branch offices, shops, airports, malls, public libraries, sports grounds, and other public

spaces. The edge of an organization is fast becoming anywhere the customer might be. Not

only is the edge of an organization shifting but so, too, is the nature of customer

engagements at those locations.

The increased adoption of colocation, hosting, and cloud services in recent years has seen

the consolidation and centralization of IT infrastructure. The redefinition of organizational

edges will go some way to reverse this trend as compute, storage, and networking are

pushed out to the edge to deal with workloads with high processing or bandwidth

requirements. There will be a resurgence of the micro datacenter but this device will not be

in its present-day form. The shifting of organizational edges will also drive continued

innovation and convergence in both IT and non-IT infrastructure/devices. The growing

likelihood that service providers want to deploy their IT assets in customer and partner

locations raises a whole new range of challenges for IT teams in both organizations.

Prediction #8: Edge IT

26

IT impact • Buildouts at the edge must be done in a highly prescribed manner in which configurations at each site is exactly the same, which affects the choice of infrastructure providers.

• The IT organization must boost investments in technology to enable remote visibility, control, and lights-out management of edge locations.

• The need to ensure secure transmission from these dispersed sites alters network requirements.

• The buildout of the organizational edge will create new corporate governance risks around the security and privacy of data that will need to be mitigated.

• The new vast, rich, and diverse feeds of structured and unstructured data from remote customers, employees, and sensors will create new commercial opportunities and ways to develop business value. However, they will also create new challenges as organizations struggle to turn vast quantities of data into meaningful information for decision making.

• Embracing the new edge of organizations creates the opportunity for businesses to digitally transform, to innovate in the ways that they engage with these newly connected customers.

BU impact

Prediction #8: Edge ITBy 2018, Cloud, Mobile, and IoT Services Providers Will Own/Operate 30% of



27


• Implementing process change with IT operations is as important as technology investments to improve asset management and regulatory compliance; the stakes are higher and the risks greater for data breaches and equipment loss at the edge.

• Plan for the complete IT equipment life cycle process upfront, and partner with a local resource to ensure the proper decommissioning and disposal of equipment.

• Hyperconverged infrastructure and cloud-based applications are ideal for edge environments. The potential bottleneck will be the network.

Prediction #8: Edge ITBy 2018, Cloud, Mobile, and IoT Services Providers Will Own/Operate 30% of



28

By the End of 2016, 25% of Companies Will Demand Payment Models Based

on Usage for Major IT and Datacenter Investments, Basing Vendor Decisions

on These Programs

APEJ companies are shifting from an on-premises infrastructure environment to a hybrid

cloud model and ultimately a diversified IT environment. This shift is seeing companies

now partner with a range of others including cloud, hosting, and service providers as well

as systems integrators. The standard IT consumption model for many of these partners

is more service-oriented, with the underlying premise being that these services can be

delivered when and how customers want them. The delivery model is a flexible service

model in which customers can flexibly scale up and down resources with a periodic

consumption or time-based contract. Under this model, risk is spread more evenly within

a complex supply chain. However, the appetite for outright purchase of IT resources still

remains strong in many countries within APEJ including China and India. To

accommodate these significant markets, infrastructure suppliers are building out the

financing arms of their organization to tap into new revenue streams.

Many APEJ companies are also shifting internally from capex to opex budgetary models.

This shift is also driving the requirement for new payment options from IT suppliers.

CFOs are already demanding this from their internal business unit partners and they are

turning to their IT suppliers for flexible payment solutions.

Prediction #9: 3rd Platform Finance

29

IT impact • The new consumption requirements have ignited the demand for new payment models that match the accelerated pace of new business initiatives.

• IT procurement shifts from the CIO to the LOB, creating a tension between these two stakeholders based on technology maturity, which impacts the sales process and financing requirements.

• The shift to a services-based model has increased the need for flexibility because, typically, the usage will change over the length of the agreement.

• The systems and culture of many APEJ-based companies still revolve around the traditional CAPEX budgetary model. As APEJ companies digitally transform themselves and adopt the technologies of the 3rd Platform, these models will need to change to take best advantage of the new opportunities. Significant change management initiatives will need to be implemented internally.

• There are now a plethora of financing options available to the CFO to fund IT consumption ranging from capex to opex, consumption-based contracts and vendor financing. The business will be challenged to identify the most cost-advantageous option from all the available solutions. The risk will be that proper consideration will not be given to alternatives and that only the vendor-recommended option will be chosen.

BU impact

Prediction #9: 3rd Platform FinanceBy the End of 2016, 25% of Companies Will Demand Payment Models Based


on These Programs

30


• Require suppliers to offer programs that reduce capex outlay and tie new project expenses into a manageable payment stream that meets the business manager's budget goals.

• Require new flexible payment programs that remove roadblocks and budget objections that often derail a cloud implementation.

• Look for less complex arrangements that provide details about monthly or quarterly costs and details about usage that can be easily understood.

Prediction #9: 3rd Platform Finance By the End of 2016, 25% of Companies Will Demand Payment Models Based


on These Programs

31

In 2018, 8% of New Datacenters Will Be Powered by Green Energy While

Improvements in Cooling Technology and Rack Architectures Continue to

Improve Energy Efficiency

Pressure for the identification and deployment of alternative power and cooling solutions in

datacenters is slowly building. This pressure is being driven by issues around the reliability of

uninterrupted power from electrical grids, power supply susceptibility during natural disasters,

and changing political/social/economic attitudes towards all the costs associated with power

generation. In late 2015, the UN Climate Conference in Paris saw all countries of the world for

the first time commit to cutting greenhouse gas emissions. Pollution has become a major issue

throughout APEJ including China, India, and Southeast Asia.

Renewable energy sources, such as solar, hydro, wind, and geothermic energy, will be

increasingly used to power datacenters. These deployments will start out as supplements to

existing power sources and evolve to become the primary power sources. The preference for

cleaner energy will be complemented by efforts to minimize power usage in datacenters.

Integrated and hyperconverged infrastructure are inherently more energy-efficient. The

continued convergence of both IT and non-IT infrastructure and facilities, as well as the

enhanced visibility obtained from datacenter information management systems and facilities

management systems, will all contribute to the more efficient utilization of equipment within the

datacenter. Cost within the datacenter is slowly evolving from a space to a power utilization

metric. This too will contribute to organizations pushing toward lower energy consumption.

Prediction #10: Next-Gen Power

32

IT impact • The quest for more power-efficient operations with lower PUE ratings leads to denser server and rack architectures that allow for more compute power per square footage.

• Interest in renewables will organically lead to greater adoption of liquid cooling technologies at rack level, closer to the compute function in datacenters.

• Cloud operators looking to further boost efficiency will drive the development of regeneration solutions that recycle the heat output from servers for heating datacenter offices and adjacent buildings.

• Environmental awareness is growing throughout APEJ and consumers are becoming less and less willing to compromise the environment for development. The recent cases of contaminated baby formula in China and the Indonesia “haze” throughout Southeast Asia highlight this.

• Although the trend toward the utilization of greener energy generation is primarily driven by the cost benefits, organizations should also be looking for green credentials that they can market favorably to their customers.

• Organizations in APEJ will face increased regulatory pressure around the environment. This is already the case in developed countries such as Australia and Singapore, and will also be seen in developing countries such as China and India as the environmental costs of development become unstainable.

BU impact

Prediction #10: Next-Gen PowerIn 2018, 8% of New Datacenters Will Be Powered by Green Energy While



33


• Assess cost/benefit analysis of deploying renewable power sources at existing and newly built datacenters including predictability and marketing aspects.

• Consider geography when identifying sites for new datacenter deployments (such as cooler climates to leverage ambient cooling, proximity to hydro power sources, sunny climates for solar power, an so forth).

• Look to partner with experienced renewable power consultants with datacenter experience and local energy providers to ensure the most suitable renewable power resources are selected.

Prediction #10: Next Gen PowerIn 2018, 8% of New Datacenters Will Be Powered by Green Energy While



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