Hyperscalers can obtain hardware before enterprise vendors, and their bulk purchasing power lets major clouds offer bare metal servers and memory that are cheaper and easier to acquire than on-prem options. This purchasing advantage can make infrastructure available faster, leading some customers to move from on-prem infrastructure to cloud. High memory and solid state storage prices are expected to remain elevated into next year, increasing server costs and requiring careful customer planning and budgeting. Customers often choose servers based on price and lead time, where clouds frequently perform well. At the same time, customers increasingly prefer on-prem AI infrastructure to keep costs predictable, despite unclear ROI. Common on-prem AI uses include document search and summaries, with measured improvements in response times and faster feature delivery. Enterprise virtualization stacks may require multiple hosts, while buyers seek smaller hosts and even non-x86 processors, though Arm porting is not yet a priority due to limited demand.
"Hyperscalers' purchasing power means bare metal servers offered by major clouds can now be cheaper and easier to acquire than on-prem servers, according to Nutanix CEO Rajiv Ramaswami. The CEO told The Register hyperscalers' ability to buy servers and memory in bulk means they can often make infrastructure available faster than enterprise hardware players, and sees some customers who have previously preferred on-premises infrastructure heading for the cloud."
"Ramaswami said he expects high memory and solid state storage prices will persist into next year and noted the impact of current price rises on the cost of servers. "What that means for customers is they need to plan and budget carefully," he said. "They pick servers on price and lead time" - and clouds often win on both metrics."
"At the same time, Ramaswami said customers increasingly favor on-prem AI infrastructure to keep costs predictable. They want that because the CEO thinks AI remains "one of those things where people feel they have to do it" and return on investment is unclear. "People are seeing incremental benefits," he said, citing document search and summaries as the most common on-prem AI applications."
"Enterprise virtualization stacks like Nutanix's products can require several hefty hosts to run. Ramaswami said he's comfortable the footprint of his company's products is not an issue for new buyers, but that he is also keenly aware that customers are looking for smaller hosts - and even servers running non-x86 processors. For now, he doesn't see sufficient appetite for Arm servers that Nutanix will devote developer time to porting its stack to that platf"
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