Pursuing agility to impact business transformation requires embracing data center modernization as a core competency. This is crucial to having the most up-to-date IT infrastructure to support the scale and complexity of a changing technology landscape. Companies must embrace this by adopting software-defined data center principles, embracing modernization, and automating their IT management processes.
Those that do will propel business innovation and deliver superior customer experiences with fast, secure, and reliable business technology.
In December 2018, Dell Technologies commissioned Forrester Consulting to evaluate the business value of modern infrastructure in company data centers. Forrester conducted an online survey with 508 IT infrastructure technology decision makers in seven countries to explore this topic. This spotlight focuses on the 102 respondents we surveyed at midmarket businesses (MBs) with 100 to 499 employees. We found that while most midmarket firms have a software-defined data center (SDDC) strategy, they have made minimal progress toward adopting SDDC technologies and automating infrastructure management processes — both of which are critical to security and business agility. However, organizations that have embraced modernized IT as a core competency are delivering applications that better meet end user needs and using automation to boost efficiency, security, and innovation.
- Data center modernization at midmarket firms falls short of what is needed to meet business goals.
- The consequence is a lack of agility and unmet business needs.
- Firms that invest in modernizing their data centers drive better
business outcomes than those that do not.
Midmarket Companies Must Modernize Their Data Centers To Achieve Their Business And Technology Priorities
As midmarket companies pursue business growth, they must deliver differentiated products and experiences without compromising the security of business or customer data. Infrastructure decision makers recognize that they need agile technology to support these goals, which requires upgrading legacy systems and enabling IT innovation. Specifically, IT organizations consider improving their data and analytics capabilities and increasing their use of cloud computing among their top technology priorities. Midmarket firms are also investing in digital experience technologies to improve customer interactions — a third of IT decision makers (ITDMs) consider this a high-priority investment. Security and privacy imperatives underpin all of these initiatives, with 95% of companies rating security and privacy as at least a moderate technology priority.
95% of midmarket companies consider security and privacy at least a moderate technology priority.
CURRENT LEVELS OF DATA CENTER MODERNIZATION FALL SHORT OF THESE GOALS
To achieve their business and technology goals, MBs must move to a cloud operating model that supports the agility, automation, and security they require. The realm of what is possible within a company’s data center has evolved tremendously since Forrester declared 2013 as “year one” of the software-defined data center (SDDC).1 IT leaders are embracing different levels of abstraction by using automation tools, containers, software-defined networks, and composable infrastructure.
Yet, despite these advancements, 40% of midmarket businesses have infrastructure in their data centers that precedes “year one” of the SDDC revolution (i.e., some servers are at least 6 years old). Older servers also lack the built-in security capabilities available in modern servers.3 And while 93% of midmarket firms see value in a long-term SDDC strategy, only 11% have broadly implemented SDDC technologies (see Figure 2). Our survey also revealed that:
- Midmarket companies have largely embraced flash storage and converged infrastructure.
- They have also made moderate progress toward virtualization and data protection
- Gaps in automation impede progress.
Modernized Data Centers Support Secure, Fast, Reliable Apps That Drive Business Innovation
Our global survey included a maturity framework to assess the extent to which companies embrace modernized IT as a core competency, as defined by the progress being made toward a series of infrastructure and automation attributes.6 Forrester has also used this framework in prior Dell-commissioned studies. While Modernized firms exist at the intersection of high modern infrastructure and high automation maturity, Aging firms are on the other extreme. Evaluating companies through the lens of modern infrastructure, and comparing their survey results across a range of metrics, reveals the many benefits of modernization. Our research for midmarket to enterprise companies has shown that:
- Midmarket companies lag larger firms in IT modernization. Only 7% of MBs qualified as being completely Modernized, based on the modern infrastructure maturity framework, while 15% of larger firms achieved this distinction. Midmarket firms need to catch up in order to capture the business outcomes that larger organizations have seen from modernization.
- Modernized firms run data centers that are up to 3x more likely to meet end user needs. Modernized firms are investing in more computing power to support emerging technologies, and their investments help them deliver on-premises apps that are up to 3x more likely to meet end user needs than Aging firms. Customer facing web applications are among the strongest performing on premises apps: 43% of Modernized firms said these apps meet end user performance needs completely versus 14% of Aging firms — a 3.1x difference (see Figure 5). Modernized firms also reap more business benefits from newer server investments where it matters most, in data center security, employee productivity, improved CX, and increased innovation.
- Modernized firms also drive significant business outcomes from automation. A November 2018 Dell-commissioned study on server automation showed that Modernized firms are 2x more likely than Aging firms to report lower opex as a benefit of automation (44% versus 21%), with an average reduction of 16% — or 2.3x the reduction that Aging firms reported. The majority have also experienced higher systems reliability (61% of Modernized firms cited this benefit versus 32% of Aging firms), with an average 21% reduction in service outages. This reliability boost supports continuous security and ensures that systems are not slowing down the pace of innovation.
Delivering secure, fast, reliable software that supports business innovation and agility requires companies to embrace modernized infrastructure, from automation and virtualization tools down to the servers. Forrester’s in-depth survey of IT infrastructure technology decision makers about server modernization yielded several important recommendations:
- Align your infrastructure strategy around a modern SDDC.
- Leverage the SDDC to reduce risk.
- Measure success with business-centric KPIs.
- Watch for modernization road bumps.