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Thursday, February 16, 2017

Superior IT Vendors Have Forward-Thinking Leaders

The senior executives who approve the purchase of business technology, and the industry analysts that influence them, have been very clear that they expect IT vendors to understand and respond to complex digital transformation agendas.

That said, many vendors have a go-to-market strategy that hasn't evolved in a decade or more, and it's impacting their growth potential. The few that are attuned to the IT market of today are reaping the rewards.

Meanwhile, 451 Research indicates that while 49.4 percent of enterprises are undergoing major IT transformation initiatives, which often include migration of current workloads to public cloud services, server spending remains steady.

IT Server Market Development

However, many IT buyers say their server vendors must demonstrate that they understand their business requirements, which is an increasingly important factor with cloud services and low-cost infrastructure underpinning software-defined IT environments.

"There is a clear opportunity for server vendors to guide customers into next-generation technologies while preserving their current distribution of standard infrastructure," said Christian Perry, research manager at 451 Research. "To seize this opportunity, vendors must work more closely with customers and prospects to understand current and future business requirements."

In fact, when customers were asked to rate their vendors both prior to purchase (Promise) and following implementation (Fulfillment) of traditional servers and converged infrastructure, cost and the ability to understand customer business needs consistently ranked lowest compared to other rating attributes.

In contrast, product-specific attributes received consistently high ratings for both the Promise and Fulfillment indices. And, in a commodity market like IT servers, vendors that differentiate on services and support -- which is also a critical future driver among buyers -- will win.

"As compute infrastructure choices expand beyond traditional servers, customers are more critical than ever about their x86 servers because they must provide a better ROI than competing servers, cloud services and converged infrastructure," Perry said.

According to this analyst assessment, two attributes in converged infrastructure lagged all others by a large margin across both Promise and Fulfillment: Understands My Business and Cost.

Outlook for IT Server Vendor Advancement

While converged infrastructure might fit more strategically within the IT plans for some organizations, it appears that the vendors selling the infrastructure do so primarily from a transactional basis, rather than a strategic IT basis.

For customers that purchase converged products only to satisfy project requirements, this approach is probably adequate, but customers displacing large portions of their legacy server infrastructure tend to prefer vendors that understand the businesses of customers in disparate verticals and regions.

Furthermore, those legacy server vendors that still believe that their installed base has an upside growth potential must learn to speak the language of the C-suite, in order to be viewed as informed and credible suppliers for today's enterprise IT requirements. In most cases, new forward-thinking sales and marketing leadership is the only way to stay relevant in this rapidly changing market.