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Flexible consumption models the way to customer's hearts

New insights from GlobalData show that infrastructure vendors are, more often, promoting flexible consumption options for on-premises IT in order to grow their customer base.

According to GlobalData, there has been a growing demand from enterprises for more flexible approaches for consuming on-premises IT, and infrastructure vendors ranging from HPE, Dell EMC and Lenovo, to IBM, Cisco and NetApp are all targeting this perceived increasing demand.

Flexible approaches, defined by GlobalData, include pay-per-use offerings, vendor-managed private clouds, and flexible financing for on-premises IT investments.

Public cloud providers, including AWS, Microsoft, Oracle, and Alibaba. are also honing in this emerging need for more adaptable IT delivery and contracting models with managed, or easy to manage, on-premises versions of their platforms, according to GlobalData.

GlobalData principal technology analyst Chris Drake, says, “The growing demand for more flexible ways to consume on-premises IT is being driven partly by the widespread popularity of the public cloud as an elastic and often more cost-effective way of delivering and accessing IT resources.”

However, according to Drake, at the same time, many enterprises need to maintain at least some of their IT resources on-premises, within their own data centres rather than rely on public cloud providers for those resources.

Alongside these drivers are various perceived benefits of malleable on-premises IT consumption, including reduced upfront costs, the avoidance of overprovisioning, elastic provisioning, and improved consumption-to-cost alignment, he says.

Drake says, “Several factors suggest that flexible consumption offerings for on-premises IT will continue to attract new customers and generate growing revenue for vendors and service providers. These include the tendency among providers to offer pay-per-use options for a growing share of their overall solutions portfolio.”

However, flexible consumption offerings for on-premises IT will complement, rather than replace, traditional IT businesses, he says.

Things that could contribute to weaker than expected growth for the former include the risk that solution portfolios will be poorly organised and communicated to potential markets, as well as factors that encourage enterprises to favor a CapEx approach for particular solutions, over an OpEx model, says Drake.