The landscape of AI automation within businesses is undergoing significant transformation, with current supply chain dynamics influencing decision-making processes among CIOs and data centre managers. According to David Annand, speaking to Network World, suppliers currently have the upper hand in equipment purchasing. “When demand outstrips supply, it’s the customer who bears the brunt of the impact,” Annand stated. He highlighted that companies like HPE are prioritising certain market segments and product bundles due to constrained supply of AI infrastructure.
Annand outlined how this prioritisation might favour higher-margin, customer-centric solutions, such as HPE GreenLake, over more commoditised offerings, specifically Gen11 HPE ProLiant Servers equipped with Nvidia GPUs. The turbulence in the supply chain witnessed during the COVID-19 pandemic five years ago, where demand surged against limited availability, presents a potential precedent for current market behaviours.
Despite the challenges, Annand noted that “deals can be made.” He proposed a “dark horse hypothesis” whereby the timing of supply exceeding demand could be crucial. If CFOs in the Fortune 2000 remain sceptical about the return on investment (ROI) from generative AI, there could be a marked shift in the dynamics of vendor-customer relationships.
Addressing the competitive landscape, he remarked that fast followers, while they may miss first-mover advantages, could ultimately benefit from lower total cost of ownership (TCO) and higher ROI in the long run. The phrase “bleeding edge” aptly describes the risks associated with attempting to lead in technology adoption prematurely.
Annand also hinted at the limitation of prediction in this rapidly evolving sector, stating, “without a magic eight ball, it’s impossible to know how this will all unfold.” He pointed out the historical relevance of Moore’s Law, which suggested that a pilot project costing $1 million could substantially scale in performance without increased cost over time. However, he emphasised that the current environment may challenge such simplistic forecasting.
In response to the challenges of transistor miniaturisation reaching its theoretical limits, Annand advised CIOs to consider planning product offerings that leverage refined AI models. This strategic approach could allow organisations to effectively navigate the complexities of adopting AI technologies and capitalise on emerging opportunities within the evolving market landscape.
Source: Noah Wire Services