A new value equation

NWME: What brings you to this part of the world?

The Middle East is important for us. This region is one of the fastest growing markets for us and it’s of strategic important that we serve this market well, and also take feedback into our labs for our development team.

NWME: You have met customers here. What are they telling you? Any common themes?

At a bigger level, customers here have many pain points. If you look the data centre profile today, energy cost is going up through the roof while the compute cost is coming down. Then, there are customers with existing data centres, looking to extend its life, and build more computing infrastructure into those data centres. Virtualisation is creating pain points in terms of management. Now, we are talking more and more about converged environments, where pools of resources need to be shared. In the current economic climate, return on investment is very important for our customers, and we are doing our bit. If you look at our ProLiant G6 server line, introduced in April this year, it delivers double the performance of previous generations, that would enable our customers to get more value out of every IT dollar. With these innovations, coupled with comprehensive service offerings, we are redefining server economics. These new breed of servers offers RoI within 3 months, and if you look at energy savings itself, we offer a RoI of 12 months.

NWME: There has been a steep decline in server sales in the first two quarters. Do you see a turn around now?

We saw the market bottoming out in North America earlier this year and the market stabilising around this region. Now, the momentum is building again, especially for us.

NWME: But users are not buying new servers, are they?

There was clearly a slowdown in terms of refreshes and budgets for new projects were halted. Now, what we have seen at the beginning of Q3 was that refreshes have started to happen again, and it’s a big part of our business. Every crisis creates an opportunity. The decision criteria for customers have also changed in this economy. They want a faster RoI; it’s now 12 months, which used to be 2-3 years earlier. So they are actually buying new servers if it can help them reduce opex, capex and make them ready for growth.

NWME: How about blade systems? Do users prefer to buy tower ones because blades cost more?

Blade server market is relatively growing better, because its optimized for virtualization. But I do agree that some customers do go in for rack and tower environments because they don’t want to spend on converged infrastructure in an enclosure.

NWME: Is power and cooling really top-of-the-mind for customers?

If you look at data centres today, compute spend has decreased, storage and networking costs have stabilized, but energy cost is a big concern. If you look at the next wave, data centre capacity is an issue because racks are often half full at C-level customers. Any surge in workload means a surge in power consumption. What we have done is to cap the power supply to the CPU. It’s done in the hardware, so it’s not a problem even if software crashes. This enable our customers to build out data centres and fill those racks without having to worry about energy costs. We have stepped up our innovation not just around power and cooling. We are also doing a lot around management, automation and virtualization that can dramatically reduce costs.