June 20, 2012
Only a few months since I authored Forrester’s "Market Overview: Data Center Infrastructure Management Solutions," significant changes merit some additional commentary.
The major vendor drama of the “season” is the continued evolution of Schneider and Emerson’s DCIM product rollout. Since Schneider’s worldwide analyst conference in Paris last week, we now have pretty good visibility into both major vendors' strategy and products. In a nutshell, we have two very large players, both with large installed bases of data center customers, and both selling a vision of an integrated modular DCIM framework. More importantly it appears that both vendors can deliver on this promise. That is the good news. The bad news is that their offerings are highly overlapped, and for most potential customers the choice will be a difficult one. My working theory is that whoever has the largest footprint of equipment will have an advantage, and that a lot depends on the relative execution of their field marketing and sales organizations as both companies rush to turn 1000s of salespeople and partners loose on the world with these products. This will be a classic market share play, with the smart strategy being to sacrifice margin for market share, since DCIM solutions have a high probability of pulling through services, and usually involve some annuity revenue stream from support and update fees.
How Big Is The Market?
I’ve received a number of inquiries about the state of the market, and I will admit that my answers have been pretty fuzzy because the larger companies are not prone to part with details of their revenues, and the small privately held firms are equally reticent. Through a series of interviews with customers and triangulating revenues of the firms through their competitors' lenses, with an attempt to factor in the various biases, I think that total revenue for DCIM solutions, not including services, is in the neighborhood of $200 million. Currently my best educated guess is that Emerson (counting all its former piece part products as well) is currently number one in revenues, with nlyte and Schneider competing for number two, possibly with a slight edge to nlyte, with the three of them accounting for perhaps $100 million in revenue.
This is a highly arguable estimate, and if anyone cares to contribute additional data, I’m all ears.
The major changes I’ve seen in the last few months are an increasing trend toward further segmentation of product offerings, with multiple low-end entry options as well as versions targeted toward service providers, with, as you would expect, granular multi-tenancy capabilities and flexible options for reporting and billing.
While all vendors are not currently at the same place in their implementations, all of them have their eyes on two emerging requirements: better visibility and management of the server workloads, primarily through VMware and Hyper-V integrations, and more granular cost and resource accounting.
Major System Vendors — Missing In Action
HP and IBM (despite IBM having a basic DCIM capability in its Maximo product) have not been active participants in the market to date, although they have all implemented what amounts to DCIM implementations as part of data center services engagements. Aside from having substantial IP distributed across many unrelated products, HP is beginning to lobby for its top-down data center management architecture, but that is a long haul to reach the market. My best guess is that there are additional cycles of acquisition by both HP and IBM, possibly Dell to build out their product portfolio.
Emerging fringes for functionality include early discussions of embedding sophisticated reliability modeling capability to assess risks for business services running in the data center.
I am anticipating rapid growth in this solution category, possibly in excess of 100% PA as Emerson and Schneider add a large number of feet on the street and users increasingly learn the value of these solutions.
I’d be interested in hearing about your DCIM plans.