The Future of Servers in Cloud Computing

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1 The Future of Servers in Cloud Computing Jean S. Bozman Research Vice President IDC Enterprise Platforms Group November 29, 2011 Copyright 2010 IDC. Reproduction is forbidden unless authorized. All rights reserved.

2 Agenda Market Drivers for Change Directions in Cloud Computing Impact on Server Designs

3 Market Drivers for Change

4 Server Installed Base: The Evolution From Physical to Virtual 100,000,000 Server s CAGR 75,000,000 50,000,000 WW Virtual Server IB 31.5% 25,000,000 WW Server IB 0.6% 0 WW Server Shipments '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 6.5% Virtualization Leaves its Mark and Primes the Market for Change

5 New Economic Model for the Datacenter Shifts to Automation Tools are a Requirement WW Spending on Servers, Power and Cooling, and Management/Administration $300 $250 $200 $150 Power & Cooling Expense Managment Cost Server Spending 56 million virtual machines by 2012 Virtualization Management Gap $100 $50 $0 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Source: IDC Server Virtualization 2009

6 Converged Infrastructure Overview Building a Highly Virtualized Private Cloud The market momentum for convergence will continue in 2012 Integrated platforms simplify IT infrastructure and reduce costs, compared to onpremise system integration There are trade-offs between operational simplicity and vendorspecific designs Best of Breed Management Virtualization Networking Storage Storage Server vs. TCO Management Virtualization Networking Storage Server However, system integration at OEMs reduces need for tuning/optimizing IT skillsets at the customer site Traditional Converged Source: IDC s Top 10 Enterprise Server Predictions for

7 Benefits From Convergence Reduced Energy Consumption x86 Blade Heterogeneous Management x86 Blade x86 Blade SW License Consolidation x86 Blade DC Convergence Improved Asset Utilization Faster Time-to-Market x86 Blade Flexible Capacity Planning x86 Blade Improved VM x86 Blade x86 Blade Densities Bigger Databases/ Larger VMs

8 Breaking Down Barriers in the Datacenter More, and Broader, Access to More Data Impact Across Geos Expanding the Global Audience Extending the Walls of the Enterprise Building compliance with governmental regulations into the solution, while isolating workloads in a virtualized server, multi-tenant cloud environment End-to-end solutions (mobile phone to CSP) will require redesign of the software environment Business Goals: Better end-user productivity, more efficient processing of applications, databases

9 Density and Fabrics Shrink the System Server Density is Increasing Systems on a Chip (SOCs): Less cabling, fewer components Server Processors as Neighbors to Local Storage Leveraging Low-Power Processors (e.g., ARM, Intel Atom) Fabric Is a Key Component of Dense Systems Fabrics Bring More Cross-Bar Switches Inside the Machine Downsizing the System Board for High Performance Smaller Distances Between Components

10 Directions in Cloud Computing

11 The Third Platform for Industry Growth Trillions of Things Billions of Users Social Big Data/ Business Analytics Mobile Mobile Broadband Devices & Apps 2011 Cloud Services Millions of Apps Hundreds of Millions of Users LAN/ Client- Internet Server PC 1986 Tens of Thousands of Apps Millions of Users Thousands of Apps

12 Evolving Cloud Business Models Consumer and Enterprise Divide Cloud Service and Delivery Saas Paas Iaas Public Hybrid Private Consumer Cloud Blended Cloud Enterprise Cloud Consumer to Consumer Lack of Privacy a Reality Business to Consumer Provider is Trusted Quality of Service is Important Business to Business Security & Compliance & SLAs are Differentiators

13 Cloud Benefits and Challenges Pay-as-you-go (opex) Easy/fast to deploy to end-users Pay only for what you use Allows us to reduce IT headcount Makes sharing with partners simpler Encourages standard systems More sourcing choices Faster deployment of new services Reliability Availability, Security, Total Cost Time to Deploy Pay for Use Collaboration Regulatory requirement restrictions Performance/response times Availability/service provider uptime Not robust enough for critical apps Not enough ability to customize Hard to integrate, manage w/in-house IT May cost more Security -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% Source: IDC s Cloud Computing Survey, December 2010, n=603

14 Servers for the Cloud: Private Cloud Outpacing Public Cloud Spend Public cloud computer server spend will grow from $1.54B in 2010 to $3.56B in 2015 (5-year CAGR of 18.3%) Private cloud computer server spend will grow from $2.55 B in 2010 to $5.88 B in 2015 (5-year CAGR of 18.1%) Source: WW Enterprise Server Cloud Computing Forecast, IDC #228916, July, 2011.

15 What s Moving to Public Cloud? Q. Which applications and IT functions do you consider MOST SUITABLE for Public Cloud implementations? Business apps (excl ERP) ERP (Financials) TechApps (design, eng, R&D) ERP (HR) Collaboration Apps (excl ) Data analysing/mining apps Office/productivity apps Data Backup/archive IT Help Desk/IT Service Management Storage Capacity on-demand Application development Application deployment IT management (server, network) Mobile device management T-B order based on most suitable for all respondents +7% +13% +9% +12% +11% +3% +5% % All <500 users Source: IDC's North American Cloud Survey, January 2011 n = 603 (Dir IT and above)

16 Shifting IT Spend Patterns for Servers Where the servers will be deployed in next-gen datacenters Q. Please estimate how much of your company's IT budget will be allocated to buying and managing these different types of IT services 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 11% 13% 11% 13% 16% 49% Today 15% 19% 16% 37% 24 Months IDC s Cloud Computing Survey, December 2010 n=603 Public Cloud Private cloud - Hosted Private Cloud Inhouse Outsourced IT Traditional IT Enterprises see that the onramp to cloud is more likely to be private clouds for the next 24 months Hybrid approaches to IT delivery are already a standard, including cloud

17 Clouds for Enterprises Will require a new set of operational standards for maturity The market will grow as SLAs improve Innovation for enterprises will be with service providers & hosters More than 50% of all enterprise cloud servers are hosted Portability between public & private environments a differentiator

18 Impact on Server Design: Density, Fabrics and SoCs

19 Vendors Morph Server Designs: Chasing a $5.2 B Opportunity in 2011 The market for servers that are designed for the cloud is growing Signature characteristics: high density compute, fast I/O Emergence of new fabrics to link clusters of servers together Support for cloud-scale analytics for unstructured data (Big Data) Horizontal scaling Leveraging scale-out computing to build up overall capacity to support cloud workloads Phase 2 deployments Working toward a state-ful cloud, with more security, more support for high availability, fat nodes Platform as a service (PaaS) grows for new-app development Software as a service (SaaS) for enterprise applications

20 Examples of Server Design Innovation Cisco and UCS: Using blocks of infrastructure to combine server, storage and networking components Dell and its DCS/SP Customers: Staying close to SP customers for emerging server HW requirements Facebook drives Open Computing Project; builds datacenters with new approaches to cooling components, works with ODM partners to build next-gen servers for the cloud-enabled datacenter HP: Customer input from HPC, hosting and cloud customers; converged infrastructure. HP/Calxeda Redstone development platform to refine use of low-power components SeaMicro: High numbers of Intel Atom processors per system, leveraging density, low power, proximity for speed

21 Key Takeaways In cloud servers, it s a start-over environment, with cloud-specific requirements. Growing from $5.2B to $9.4B in five years ( ). Stay close to the customers. It s worth it. New Requirements from Cloud Service Providers Keep Emerging. Monitor their latest deployments for technical changes and evolving server design. Understand what the ODMs are trying to do. If you re a systems vendor, you may want to take the same approach. If you re a large enterprise, you have a choice: build, buy, or collaborate.

22 Questions? address:

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