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When PeoplesBank in Holyoke, Mass., recently decided to upgrade its data center with hyperconverged infrastructure, it joined a rapidly growing group of banks.

Hyperconverged infrastructure (also called hyperconverged integrated systems) combines virtualized computing, storage and network equipment in an integrated "stack" that can be managed with software. The stack can also include backup, recovery, replication, deduplication and compression. Nutanix, SimpliVity, Cisco, HPE, Dell EMC, Pivot3 and VMWare are among the vendors that offer hyperconverged infrastructure.

It's the latest stage in the evolution toward software-defined computing, in which all technology in an IT environment is tightly integrated and can be managed with one software program.

About 40% of all companies use hyperconverged infrastructure, according to the information technology research firm 451 Research. In financial services the numbers are slightly higher: 41.3% use the technology today and more than 25% plan to use it in the near future, according to the firm's latest surveys, which were conducted in the second quarter.

"There's a larger contingent of folks who are either using it or have it planned in finance than any other vertical," said Christian Perry, research manager at 451. The company expects that number to grow over the next two years.

It's still being used in a limited way, however. Gartner analysts say less than 5% of data in data centers is stored in hyperconverged infrastructures today. By 2019, they expect 30% of stored data in enterprise data centers to be deployed on such systems. And 20% of mission-critical applications will transition to hyperconverged by 2020.

Why PeoplesBank Took the Plunge

At PeoplesBank, a $2 billion-asset institution with 17 branches and nearly 300 employees, legacy systems were aging and needed to be upgraded or replaced.

A Dell EqualLogic storage area network and a disk-to-disk backup system were running fine, but their capacity was stretched at times. "We knew we were going to need to move on," said Joe Zazzaro, the bank's chief information officer.

Zazzaro was especially interested in upgrading the bank's disaster recovery systems. "I'm a big DR person," he said. "I like making it much more efficient."

He was impressed by demonstrations of hyperconverged infrastructure technology at conferences such as VMWare user group meetings.

"We were at that point where we wanted to improve our operational efficiency, and we thought [hyperconvergence] looked like a really good fit," Zazzaro said. His team looked at products from SimpliVity, Pivot3, Dell EMC, HPE and VMWare.

SimpliVity's ease of use appealed to them. "We're a small shop with seven IT people, and we're responsible for anything and everything that's IT related," Zazzaro noted. "This helps simplify our administration — we don't have to have as much cross-training as we had to before."

The bank formerly had to have EqualLogic SAN experts on staff. Now, since SimpliVity supports VMWare's commonly used VCenter control console, less training is required. "We have people who are already experienced with that tool and can easily fit into that role, so we're much more comfortable with that."

The software makes it easy to make changes, such as setting up a new virtual server.

"The first time we moved an SQL server over, when we rebooted and started the server through the interface, we thought, 'Something must be wrong, it can't be up already,' and it was," Zazzaro said. "We were taken aback. I'd never seen an SQL server go up that fast in my life."

SimpliVity combines virtualized servers, storage, networking, backup, data management and disaster recovery in an appliance called an OmniCube. Jesse St. Laurent, SimpliVity's vice president of product strategy, said OmniCubes replace the typical data center's servers, storage units "and a whole pile of infrastructure appliances that have come into the market in the past few years — backup appliances, application optimization, flash arrays, data management software, backup software, replication software. Even if we ignore the [capital-expenditure] dimension of that stack of equipment, which is obviously very high, there's a tremendous operational burden to all that infrastructure."

An OmniCube (or OmniStack as the product is called when provided with a partner like Cisco, Lenovo or Dell) "effectively collapses that entire stack and delivers it in this one single, scale-out system that you can use to build your data center," St. Laurent said.

PeoplesBank began installing OmniCubes in June and finished in September. "We moved things over slowly — we're cautious about safety and making sure things are going to be up and running for our users," Zazzaro said. "We were able to test them to make sure we weren't having any problems."

Disaster recovery has been enhanced with the use of two OmniCubes at the bank's main site and one at a disaster recovery site 42 miles away.

This replaced a setup in which data was replicated between two storage area networks, requiring high-bandwidth networks. With the deduplication and compression conducted by the OmniCubes on the fly, data is replicated to the backup site more efficiently, Zazzaro said.

Why Hyperconvergence Has Gotten So Popular

The hyperconvergence trend started in 2009, when converged infrastructure — a combination of computing and networking technologies — came on the scene, according to Perry.

"Within about five years, we started to see a lot of steam gaining with converged infrastructure," he said. The main reason is that converged infrastructure makes buying technology easier; it's one piece of equipment, rather than several stand-alone components.

Deployment, configuration, and management also become easier. Instead of taking months to set up a new hardware stack, IT departments can be up and running in days or weeks, Perry said.

"That means a lot of operational efficiency within environments," Perry said. "And there are cost savings associated with that," including reductions in staff and in some cases hardware.

Banks are unlikely to go completely hyperconverged in the near future. Most have legacy workloads such as aged core banking systems and homegrown applications that are hard to shift to a virtualized environment. And some workloads, such as analytics, run better on bare metal. (That's changing, too. "The hyperconverged vendors are evolving their platforms to handle things that used to run best on bare metal," Perry said.)

Technology fads come and go but Perry, for one, doesn't expect hyperconverged infrastructures to be replaced in the near future.

"It's difficult to see right now a more sensible type of infrastructure for today's requirements for high flexibility and fast responsiveness from IT," Perry said.

Gartner analysts also expect hyperconvergence to grow rapidly. But they strike a note of caution. "As with any new trend, it is easy to see it as a panacea to every problem," said Andrew Butler, research vice president at Gartner. "While it's exciting and transformational, it also has its limitations, and the choice really depends on things like use cases and company structure."

For instance, hyperconverged infrastructure lacks the ability to tightly integrate with existing traditional infrastructures, applications and workflows. This means it makes the most sense for edge computing and point projects within an enterprise data center, Butler said.