White Paper: Enterprise Hosting 2013

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1 White Paper: Enterprise Hosting , igroup ltd. All rights reserved. INTELLECTUAL PROPERTY DISCLAIMER This white paper is for informational purposes only and is provided as is with no warranties whatsoever including any warranty of merchantability, fitness for any particular purpose, or any warranty otherwise arising out of any proposal, specification, or sample. No license, express or implied, to any intellectual property rights is granted or intended hereby. Igroup Ltd disclaim all liability, including liability for infringement of proprietary rights, relating to implementation of information in this specification. Igroup Ltd do not warrant or represent that such implementation(s) will not infringe such rights. Product or company names mentioned herein may be the trademarks of their respective owners.

2 Contents Executive Summary... 3 About igroup Ltd Industry Trends... 5 Technology Platforms... 8 Server Software Market Share... 9 Server Security... 9 Factors Driving Business Adoption... 9 Lifetime Cost

3 Executive Summary The worldwide server market for business is in a state of growth and change, driven by a number of factors: Demand for cloud technologies Rise in data transfer with internet expansion Economic forces Advancement of technology A shift in the market towards more energy efficient ARM technology is underway as power improvements are made in chip architecture, which is likely to lead to increase market-share for AMD away from the current market leader, Intel. Apache market-share is currently declining towards Windows and new market entrants such as Nginx. The key factors determining software choice are: Requirement for an integrated technology stack Long-term cost of deployment Security requirements Performance needs This report sets out to identify the trends within the enterprise hosting market for applications and websites, and provide insight into the reasons behind those trends form a business perspective. 3

4 About igroup Ltd. igroup is an ISO 9001 certified organisation and a Microsoft Gold Certified Partner with our specialist competency in SharePoint. The SharePoint services we offer include development, hosting, consultancy, support and training. Our Managing Director, Steve Rastall has been named in Insider Magazine s Top 25 Up & Coming Entrepreneurs and we have also won a HOT 100 Fastest Growing Companies award. Since we were setup, we have at least doubled sales revenue every year via organic growth. For more information about the products and services offered by igroup ltd, please visit our website: Or contact us using the following address and telephone number:

5 Industry Trends 2012 marked the fourth successive year of growth in the Global server market following the drop in demand seen during According to data from Forrester, the upward trend in the sales of the international server market is expected to continue, with growth to around 15 million units in (Sources: Gartner & IDC Press Releases) This significant growth in server unit sales is being driven by four primary business factors: Server Virtualisation Growth of Cloud Computing Growth in the HPC market Increases in the number of connected Devices According to Forrester research, the global market for cloud computing is expected to reach $241 billion in 2020 from $41 billion in 2011 (Source: Demand for servers has been matched inversely by gradually falling costs. The average cost per unit has fallen from $6227 in 2007 to $5412 in 2012 a reduction of 13%: 5

6 The downward trend in cost per unit is also shown in the chart below: With increases in efficiency, and processing power, further reductions in the cost per server are expected going forwards, while the overall size of the market should continue to grow. The steady growth in Internet traffic through this period is a major factor driving sales and is expected to continue for the foreseeable future. This is primarily due to an increase in world population with access to high speed internet connections and greater requirements for businesses to provide centralised data services to staff using technologies like SharePoint. 6

7 During the period from 2007 through to 2012, Cisco measured consistent growth in the volume of fixed line Internet traffic at an average of 41% annually, from 5,000 petabytes in 2007 to 20,000 Petabytes in 2012: Over the same period, traffic from mobile devices increased by a factor of 100, from 15PB to 1500PB per year: (Source: Cisco) A key point to take away from the above data is the increasing performance of servers over the past 5 years, which has resulted in greater efficiency and an ability to handle more traffic per unit. With growth across both mobile data requirements, total internet population and the volume of data required within businesses expected to continue increasing over the coming years, businesses are expected to increase their use of cloud resources to manage demand in a cost-effective manner going forward, further driving the growth of more efficient server technology. 7

8 Technology Platforms Traditionally, the server market has been dominated by x86 processors, with Intel as the dominant supplier. Key factors driving market adoption of the x86 technology are familiarity and value proposition. However, with increasing fabrication capacity given over to ARM chipsets due to increasing performance and demand within the mobile computing sector, we are seeing a growing trend towards the use of ARM chips in servers as shown below: (Sources: Gartner & IDC Press Releases) In the period since demand began increasing again in 2010, sales of ARM servers have increased by 45%, compared with just 3% growth for x86 servers. Two key reasons for this are the lower power demands of ARM servers and their lower costs. Future growth in the ARM sector will be supported by investment from AMD. Although its share of the x86 market has been in decline for several years, Gartner expect its share of the market to reach 20% by 2017: 8

9 Server Software Market Share Windows / IIS and Linux / Apache are the leading providers of web server software globally, together responsible for approximately 72% of the total market as of July Additionally, software from Nginx and Google is gaining ground, although this is currently the minority. (Source: According to a 2012 study by Web Host Park IIS and Apache were found to have similar performance levels for static pages, however, when running on a Windows server, Apache was unable to match performance levels for dynamic pages, and failed at 5 threads compared to 30 threads on Windows. Windows + IIS are recommended for both PHP and.net / ASPX software, whereas Apache is unable to run ASPX /.NET Applications. Server Security A key consideration for larger organisations is data security and vulnerability. According to Secunia, three major vulnerabilities that could result in unauthorised access to data were identified for Apache in 2010 vs. 4 for IIS, however, the study went on to advise that most encountered security risks on either platform were due to installed application design, rather than being related to either IIS or Apache. (Source: Factors Driving Business Adoption A key driver of platform adoption between Apache and IIS or Windows and Linux at enterprise level is compatibility. Microsoft s dominance of productivity software via Office, Exchange and SharePoint provides a compelling argument in favour of selecting an integrated software stack. Additionally, for the corporate environment, the ease of integration for Microsoft technologies, staff training and staff certification are key considerations. Although Apache occupies the market leader position in the external web server market with approximately 52% share, Microsoft stacks are leading in the corporate server space with approximately 82% of the market as of July 2013, according to Gartner. 9

10 Lifetime Cost Total cost of ownership remains a primary consideration for business when selecting servers. Extensive research has been carried out by both Microsoft and Red Hat regarding total cost of using either Windows or Linux over a 5 year period. While the software costs over time of choosing Windows Server over Red Hat Linux are substantially higher, the long term staff costs balance this out due to the higher cost of employing system administrators with experience of Linux, who are paid approximately 7,000 more annually according to average salary data from Indeed. (Source: e59/1/jcr:frozennode/rh:pdffile.pdf) (Source: 10

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