All of us in the technology industry get caught up in the near-term fluctuations and pressures of our business. This quarter’s earnings, next quarter’s shipments, this year’s hiring plan . . . it’s easy to get swallowed up by the flood of immediate concerns. So one of the things that we work hard on at Forrester, and that our clients value in their relationships with us, is taking a few steps back and looking at the longer-term, bigger picture of the size and shape of the industry’s trajectory. It provides strategic and financial context for the short-term fluctuations and trends that buffet all of us.
I am lucky to co-lead research in Forrester's Vendor Strategy team, which is explicitly chartered to predict and quantify the new growth opportunities and disruptions facing strategists at some of our leading clients. We will put those predictions on display later this month at Forrester's IT Forum, our flagship client event. Among the sessions that Vendor Strategy analysts will be leading:
"The Software Industry in Transition": Holger Kisker will preview his latest research detailing best practices for software vendors navigating the tricky transition from traditional license to as-a-service pricing and engagement models.
"The Computing Technologies of 2016": Frank Gillett will put us in a time machine for a trip five years into the future of computing, storage, network, and component technologies that will underpin new applications, new experiences, and new computing capabilities.
Intel has been publishing research for about a decade on what they call “3D Trigate” transistors, which held out the hope for both improved performance as well as power efficiency. Today Intel revealed details of its commercialization of this research in its upcoming 22 nm process as well as demonstrating actual systems based on 22 nm CPU parts.
The new products, under the internal name of “Ivy Bridge”, are the process shrink of the recently announced Sandy Bridge architecture in the next “Tock” cycle of the famous Intel “Tick-Tock” design methodology, where the “Tick” is a new optimized architecture and the “Tock” is the shrinking of this architecture onto then next generation semiconductor process.
What makes these Trigate transistors so innovative is the fact that they change the fundamental geometry of the semiconductors from a basically flat “planar” design to one with more vertical structure, earning them the description of “3D”. For users the concepts are simpler to understand – this new transistor design, which will become the standard across all of Intel’s products moving forward, delivers some fundamental benefits to CPUs implemented with them:
Leakage current is reduced to near zero, resulting in very efficient operation for system in an idle state.
Power consumption at equivalent performance is reduced by approximately 50% from Sandy Bridge’s already improved results with its 32 nm process.
Is your cloud strategy centered on saving money or fueling revenue growth? Where you land on this question could determine a lot about your experience level with cloud services and what guidance you should be giving to your application developers and infrastructure & operations teams. According to our research the majority of CIOs would vote for the savings, seeing cloud computing as an evolution of outsourcing and hosting that can drive down capital and operations expenses. In some cases this is correct but in many the opposite will result. Using the cloud wrong may raise your costs.
But this isn’t a debate worth having because it’s the exploration of the use cases where it does save you money that bears the real fruit. And it’s through this experience that you can start shifting your thinking from cost savings to revenue opportunities. Forrester surveys show that the top reasons developers tap into cloud services (and the empowered non-developers in your business units) is to rapidly deploy new services and capabilities. And the drivers behind these efforts – new services, better customer experience and improved productivity. Translation: Revenues and profits.
If the cloud is bringing new money in the door, does it really matter if it’s the cheaper solution? Not at first. But over time using cloud as a revenue engine doesn’t necessarily mean high margins on that revenue. That’s where your experience with the cost advantaged uses of cloud come in.
Having attended the OpenStack Design Summit this week and at the same time fielding calls from Forrester clients affected by the Amazon Web Services (AWS) outage, an interesting contrast in approaches bore out. You could boil it down to closed versus open but there’s more to this contrast that should be part of your consideration when selecting your Infrastructure as a Service (IaaS) providers.
The obvious comparison is that AWS’ architecture and operational procedures are very much their own and few outside the company know how it works. Not even close partners like RightScale or those behind the open source derivative Eucalyptus know it well enough to do more than deduce what happened based on their experience and what they could observe. OpenStack, on the other hand, is fully open source so if you want to know how it works you can download the code. At the Design Summit here in Santa Clara, Calif. this week, developers and infrastructure & operations professionals had ample opportunity to dig into the design and suggest and submit changes right there. And there were plenty of conversations this week about how CloudFiles and other storage services worked and how to ensure an AWS Elastic Block Store (EBS) mirror storm could be avoided.
It seems that during every major shift in the telecommunications, service provider or hosting market there is a string of moves like these as players attempt to capitalize on the change to gain greater market position. And there are plenty of investors caught up in the opportunity who are willing to lend a few bucks. In the dot.com period, through 2000s, we saw major shifts in the service provider landscape as colo/hosting giants were created such as Cable & Wireless and Equinix.
But what does this mean for infrastructure & operations professionals looking to select a hosting or Infrastructure as a Service (IaaS) cloud provider? The key is in determining if 1 + 1 actually equals anything greater than 2.
The lines are blurring between software and services — with the rise of cloud computing, that trend has accelerated faster than ever. But customers aren’t just looking at cloud business models, such as software-as-a-service (SaaS), when they want more flexibility in the way they license and use software. While in 2008 upfront perpetual software licenses (capex) made up more than 80% of a company’s software license spending, this percentage will drop to about 70% in 2011. The other 30% will consist of different, more flexible licensing models, including financing, subscription services, dynamic pricing, risk sharing, or used license models.
Forrester is currently digging deeper into the different software licensing models, their current status in the market, as well as their benefits and challenges. We kindly ask companies that are selling software and/or software related services to participate in our ~20-minute Online Forrester Research Software Licensing Survey, letting us know about current and future licensing strategies. Of course, all answers are optional and will be kept strictly confidential. We will only use anonymous, aggregated data in our upcoming research report, and interested participants can get a consolidated upfront summary of the survey results if they chose to enter an optional email address in the survey.
A lot has been written about potential threats to Intel’s low-power server hegemony, including discussions of threats from not only its perennial minority rival AMD but also from emerging non-x86 technologies such as ARM servers. While these are real threats, with potential for disrupting Intel’s position in the low power and small form factor server segment if left unanswered, Intel’s management has not been asleep at the wheel. As part of the rollout of the new Sandy Bridge architecture, Intel recently disclosed their platform strategy for what they are defining as “Micro Servers,” small single-socket servers with shared power and cooling to improve density beyond the generally accepted dividing line of one server per RU that separates “standard density” from “high density.” While I think that Intel’s definition is a bit myopic, mostly serving to attach a label to a well established category, it is a useful tool for segmenting low-end servers and talking about the relevant workloads.
Intel’s strategy revolves around introducing successive generations of its Sandy Bridge and future architectures embodied as Low Power (LP) and Ultra Low Power (ULP) products with promises of up to 2.2X performance per watt and 30% less actual power compared to previous generation equivalent x86 servers, as outlined in the following chart from Intel:
So what does this mean for Infrastructure & Operations professionals interested in serving the target loads for micro servers, such as:
The drum continues to beat for converged infrastructure products, and Dell has given it the latest thump with the introduction of vStart, a pre-integrated environment for VMware. Best thought of as a competitor to VCE, the integrated VMware, Cisco and EMC virtualization stack, vStart combines:
The world of hyper scale web properties has been shrouded in secrecy, with major players like Google and Amazon releasing only tantalizing dribbles of information about their infrastructure architecture and facilities, on the presumption that this information represented critical competitive IP. In one bold gesture, Facebook, which has certainly catapulted itself into the ranks of top-tier sites, has reversed that trend by simultaneously disclosing a wealth of information about the design of its new data center in rural Oregon and contributing much of the IP involving racks, servers, and power architecture to an open forum in the hopes of generating an ecosystem of suppliers to provide future equipment to themselves and other growing web companies.
The Data Center
By approaching the design of the data center as an integrated combination of servers for known workloads and the facilities themselves, Facebook has broken some new ground in data center architecture with its facility.
At a high level, a traditional enterprise DC has a utility transformer that feeds power to a centralized UPS, and then power is subsequently distributed through multiple levels of PDUs to the equipment racks. This is a reliable and flexible architecture, and one that has proven its worth in generations of commercial data centers. Unfortunately, in exchange for this flexibility and protection, it extracts a penalty of 6% to 7% of power even before it reaches the IT equipment.
Ciscoannounced today its intent to acquire NewScale, a small, but well-respected automation software vendor. The financial terms were not disclosed, but it is a small deal in terms of money spent. It is big in the sense that Cisco needed the kind of capabilities offered by NewScale, and NewScale has proven to be one of the most innovative and visible players in that market segment.
The market segment in question is what has been described as “the tip of the iceberg” for the advanced automation suites needed to create and operate cloud computing services. The “tip” refers to the part of the overall suite that is exposed to customers, while the majority of the “magic” of cloud automation is hidden from view – as it should be. The main capabilities offered by NewScale deal with building and managing the service catalog and providing a self-service front end that allows cloud consumers to request their own services based on this catalog of available services. Forrester has been bullish on these capabilities because they are the customer-facing side of cloud – the most important aspect – whereas most of the cloud focus has been directed at the “back end” technologies such as virtual server deployment and workload migration. These are certainly important, but a cloud is not a cloud unless the consumers of those services can trigger their deployment on their own. This is the true power of NewScale, one of the best in this sub-segment.