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Issue of June 2003 
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Hardware
Build a Robust Computing Platform

The performance of your applications depend on the robustness of the server. CIOs are moving towards open industry prevalent platforms

Enterprise Hardware is the tangible part of IT infrastructure. It is the foundation for connectivity, applications, storage, security, and communications. Naturally Hardware has been a key area of investment in the past (second only to Bandwidth/Connectivity). On an average, companies have allocated almost half the IT budget (41 percent) for hardware in the past.

While many companies went on a spending spree and invested heavily in the latest (hardware) technologies in the past, the picture is quite different now. Because of the economic downturn, hardware budgets are more constrained today. So CIOs have to focus on extracting the maximum from existing hardware.

Investment in hardware will decrease in the next one year. This year overall investment in hardware is down to 55 percent (from 64 percent in the last one year)—in terms of the number of companies investing in this area. Also, the slice for hardware (in the budget allocation pie) has shrunk to 34 percent (from 41 percent in the past one year).

Rapidly expanding businesses, like telcos, manufacturing units, banks and call centers, have made the most investment in hardware and connectivity in the past year. Banks in particular, scaled up its infrastructure to keep pace with rapidly growing business.

This year however will see declining investment in hardware compared to last year, across all industry verticals. The cuts in spending are due to smaller IT budgets. Also, companies are looking to extract more out of existing hardware resources—through consolidation and resource re-allocation—rather than procure new hardware.

For this survey we placed all Enterprise hardware in four broad categories: Servers, Networking gear, PCs & peripherals, Laptops/PDAs, and Power Conditioning equipment.

Towards industry prevalent servers
When it comes to servers we considered the server OS, because to an extent, the OS determines the type of server hardware.

Like other companies around the world, Indian enterprises are moving away from proprietary server platforms towards industry-prevalent Windows NT/2000- and Linux-based servers. The chief reason for this is vendor support and clearly defined future roadmaps. Major vendors (with the exception of Sun Microsystems) that once offered only proprietary solutions are now moving to the Windows/Intel or Linux/Intel platforms. HP for instance is offering customers that use proprietary servers—like the erstwhile Tandem Nonstop Himalaya servers, or Digital Alpha servers—transition programs or migratory paths towards open industry platforms. IBM is offering Linux across all its server platforms—right from mainframes to low-end Intel servers.
Although Indian enterprises continue to use Unix, and Linux is making inroads, Windows seems to be a dominant server platform. Enterprises that use Windows NT are upgrading to Windows 2000. A large majority of the respondents said they have already invested in Windows NT (63 percent) and Windows 2000 (66 percent).

The reason for popularity of Windows-based servers is obvious—they cost significantly less than proprietary Unix servers. This makes it ideal for running non-mission critical (that is internal, corporate) applications. A large number of companies in the Services, Health Care and Telecom/IT/ITES verticals use Windows 2000.

Enterprises will continue to invest in Windows servers this year. Overall, 41 percent plan to invest in Windows 2000-based servers.

Linux moves in
But Windows may face some stiff competition from Linux as more enterprises adopt this open source server. First Linux wowed the research and educational bodies. Then certain state governments began to evaluate Linux, and now corporates are using it for messaging and other non-mission critical applications. It's only a matter of time before enterprises start using Linux for core or mission critical applications.

The survey shows that Linux servers are steadily picking up in Indian enterprises and 31 percent of the respondents said they have already made investments in Linux.

Almost half the number of companies within the Telecom/IT/ITES vertical use Linux. The BFSI and Services segment have also made substantial investment in Linux.

Research and educational institutions embraced open source servers because these are either free or the licensing terms are rational. Now corporates are embracing Linux servers for the same reasons. Also, server hardware vendors are offering complete support for the Linux servers that they distribute. HP for instance is offering full support for Red Hat Linux.
25 percent of all respondents plan to invest in Linux this year. The BFSI vertical is seriously looking at Linux—in fact during the next year 43 percent of BFSI companies said they would invest in Linux-based servers.

Still a Unix country?
Someone once said, "India is a Unix country." Well, Unix continues to hold out despite newer entrants like Linux—33 percent said they have invested in some kind of Unix server. This trend is mostly application driven—those who are using ERP applications on Unix for instance, will not want to switch to another platform anytime soon. Unix is renowned for its robustness and its ability to handle high volume transactions and mission critical, high-availability applications. The other reason is investment protection—those who have made huge investments in legacy platforms are holding on, or slowly moving to open
industry platforms.

Among the respondents that invested in Unix, we see that 45 percent are from the large enterprises. It's mainly the BFSI and Government/PSU companies that have invested in Unix. The BFSI companies have chosen Unix for its robustness which makes it ideal for running 24x7 core banking applications. The Government/PSU companies invested in Unix long ago, when it was the only reliable solution around.

But overall investment in Unix is on the decline. Just 17 percent of the respondents said they plan to invest in Unix this year. These are mainly large companies (24 percent) and that too from the BFSI segment.

While the large companies have to hold on to Unix (for reasons mentioned earlier), new investments will lean towards Windows and Linux servers.

What about Solaris and NetWare?
Among the various Unix flavors it is Sun Solaris that has the highest usage. So we considered Solaris-based servers separately.

Overall, 26 percent of the respondents have invested in Sun Solaris. Of these, 32 percent are the large companies, and mostly from the Telecom/IT/ITES vertical.

In 2003-04 it is mostly companies from the Telecom/IT/ITES vertical who will invest in Solaris.
Novell NetWare was once a popular network operating system and nearly a quarter of the respondents (24 percent) said they use it today. But new implementations of Net- Ware are clearly on the decline—just 12 percent of the respondents plan to invest in NetWare this year.

We have a few recommendations for companies planning to go in for Linux for the first time. Consider buying a commercial distribution (rather than downloading), as it includes vendor support and well integrated modules. Also consider the type of applications you want to run on the Linux server.

When buying Servers…

  1. Map the benefits of the server to your business processes.
  2. Licensing terms for the new server should be carefully considered.
  3. Vendor support is of prime importance here, and one should not compromise on support fees.
Research Snapshots
  • Indian enterprises are moving away from proprietary server platforms towards industry-prevalent servers—like Windows NT/2000 and Linux.
  • Unix continues to hold out despite newer entrants like Linux—33 percent said they have invested in some kind of Unix server. 17 percent of the respondents said they plan to invest in Unix this year.
  • Within networking hardware most of the investment is made in Switches (89 percent) and Structured Cabling (82 percent). But there has also been investment in Hubs (78 percent), Routers (70 percent), and Network printers (67 percent). Respondents plan to invest mainly in Switches (50 percent), Routers (43 percent) and Structured Cabling (42 percent). Respondents also plan to invest in Network printers (37 percent) and Hubs (39 percent).
  • Although overall PC sales were sluggish last year, most of the buying came from the enterprises. Of the total respondents who invested in enterprise hardware, 89 percent invested in PCs/Peripherals.
  • Laptops and PDAs are becoming increasingly common in enterprises. 56 percent of enterprises have already invested in Laptops. This year 33 percent of the respondents plan to invest in Laptops.
  • Overall 34 percent of respondents said they plan to invest in Power conditioning equipment this year.
NM Suggests
  • Migrate from proprietary vendor dependent platforms to open architecture/industry standards. This will reduce TCO and complexity.
  • Do not migrate to a new platform without evaluating business benefits/value derived from the new platform.
  • Before continuing with proprietary technology, consider roadmaps of the technology/ migration path to new platforms as well.
  • Consider licensing issues as well instead of just sticking to the most popular option.
Planned areas of investment in 2003-04 - Industry wise
  Mfg./ Engg BFSI Auto & Auto comps Chem & Pharma FMCG/ Consumer durables Telecom/IT/ ITES Govt./ PSU Services Health Care
Base 88 44 15 16 19 21 23 14 13
  % % % % % % % % %
Proprietary Unix 7 27 20 25 21 24 26 0 15
Linux 18 43 20 25 26 19 17 29 38
Solaris 11 20 7 13 5 43 22 7 0
NetWare 9 20 13 25 11 5 4 14 15
Windows 2000 40 55 47 31 16 48 35 43 54
Windows NT 22 27 20 25 21 33 26 21 8
Base : All those who have invested in Enterprise hardware or are planning to invest
 
     
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