No ‘independent chip makers, system makers and storage makers’: Industry expert paints bleakest picture of IT’s future β Insatiable technology hunger from Google, Microsoft and other hyperscalers could kill competition forever
In IDC’s own words: it is Global Quarterly Enterprise Infrastructure Tracker: Copper and Cloud Deployment is “designed to give customers a better understanding of how enterprise infrastructure technologies (server, external enterprise storage systems, purpose-built appliances: HCI and PBBA) are deployed in cloud environments and the type of buyers purchasing them.”
The next platform has been tracking these trackers as they are released quarterly, noting that while hyperscalers, cloud builders and other service providers that βbuild data center infrastructure and sell capacity on itβ surpassed the 50 percent share of combined server and storage revenue in the early years as IDC is right, that figure will rise to 69.7 percent by the end of 2028.
The reason is of course LLMs. While businesses, governments and academic institutions (EG&As) all want to ride the AI ββwave, it will be more affordable for them to do so via the cloud rather than buying, running and maintaining their own data centers.
No server makers
Diving into IDC’s data, The next platformTimothy Prickett Morgan has found that ‘non-cloud’ spending is now seriously below ‘all-cloud’, and this is a trend that shows no signs of slowing.
Prickett Morgan paints a grim picture of where this could lead us. βDuring that longest period, companies may lose the skills needed to manage their own infrastructure as they become more dependent on service providers. During that longest period, there may be no independent chip manufacturers, system manufacturers and storage manufacturers, and IT can become a lot more expensive as a result. There may be no server sellers at all, nor any server makers. Just hyperscale clouds (i.e. an intentional hybrid) selling application access with expensive built-in AI that no one can easily replicate in their own data center, all based on hardware they designed and built themselves.β
And things are getting bleaker. βWhat if the plan for the hyperscalers and cloud builders is not just to build their own stuff, but to prevent you and your OEM partners from building an alternative? That’s what happens when the EG&A sector becomes too small, and don’t think for a second that these ever-hungry giants don’t know that.β
That may sound like the worst case scenario, and it may not come true, but the trends and projections presented by IDC and analyzed by The next platform underscore the genuine concerns within the technology community. If organizations become increasingly dependent on hyperscale clouds and invariably lose the ability to manage their own hardware, this could create a technology monopoly in which only a handful of major players dictate the terms of IT solutions. The consequences can range from high prices to reduced options for customization and flexibility. This is a transition that organizations, technology providers and policymakers should keep a close eye on.