A group of us just published an analysis of VMworld (Breaking Down VMworld), and I thought I’d take this opportunity to add some additional color to the analysis. The report is an excellent synthesis of our analysis, the work of a talented team of collaborators with my two cents thrown in as well, but I wanted to emphasize a few additional impressions, primarily around storage, converged infrastructure, and the overall tone of the show.
First, storage. If they ever need a new name for the show, they might consider “StorageWorld” – it seemed to me that just about every other booth on the show floor was about storage. Cloud storage, flash storage, hybrid storage, cheap storage, smart storage, object storage … you get the picture.[i] Reading about the hyper-growth of storage and the criticality of storage management to the overall operation of a virtualized environment does not drive the concept home in quite the same way as seeing 1000s of show attendees thronging the booths of the storage vendors, large and small, for days on end. Another leading indicator, IMHO, was the “edge of the show” booths, the cheaper booths on the edge of the floor, where smaller startups congregate, which was also well populated with new and small storage vendors – there is certainly no shortage of ambition and vision in the storage technology pipeline for the next few years.
I’ve recently been thinking a lot about application-specific workloads and architectures (Optimize Scalalable Workload-Specific Infrastructure for Customer Experiences), and it got me to thinking about the extremes of the server spectrum – the very small and the very large as they apply to x86 servers. The range, and the variation in intended workloads is pretty spectacular as we diverge from the mean, which for the enterprise means a 2-socket Xeon server, usually in 1U or 2U form factors.
At the bottom, we find really tiny embedded servers, some with very non-traditional packaging. My favorite is probably the technology from Arnouse digital technology, a small boutique that produces computers primarily for military and industrial ruggedized environments.
Slightly bigger than a credit card, their BioDigital server is a rugged embedded server with up to 8 GB of RAM and 128 GB SSD and a very low power footprint. Based on an Atom-class CPU, thus is clearly not the choice for most workloads, but it is an exemplar of what happens when the workload is in a hostile environment and the computer maybe needs to be part of a man-carried or vehicle-mounted portable tactical or field system. While its creators are testing the waters for acceptance as a compute cluster with up to 4000 of them mounted in a standard rack, it’s likely that these will remain a niche product for applications requiring the intersection of small size, extreme ruggedness and complete x86 compatibility, which includes a wide range of applications from military to portable desktop modules.
Companies understand the urgency of ramping up their business technology (BT) capabilities to help the business innovate and grow. Increasingly, they realize that they cannot do this alone and firms will require partners that can help deliver agile services that bring fast and predictable outcomes to the business. For instance, Bharat Light and Power (BLP), one of the largest clean energy generation companies in India, signed in late 2013, a 10-year engagement with IBM to build a new business capability that aims at nothing short of transforming the utility sector in India. In a few words (more details are available in this report), BLP and IBM are creating an open energy service platform that will help BLP understand how to optimize the utilization of its wind turbines. The really interesting part for me lies in the way the company intends to leverage the information generated by this platform as the basis of its competitive advantage. The energy service platform will indeed act as an expertise repository that BLP can leverage to:
Increase the value of its own assets. As the company operates, grows, and optimizes its own asset efficiency, it learns how the climate, power grid, and wind turbines influence a vital business metric for a utility company: the plant load factor (PLF). This will allow the company to generate more revenues from its existing assets.
You’ve probably already seen the announcement of the partnership between IBM and Apple; Forrester clients can read more about it here, along with our deeper analysis.
While I can’t comment on the trends in North America and Europe, I know that there are some interesting dynamics in the enterprise mobility space in Asia Pacific at the moment. The penetration of technologies like BYOD, customer mobility, and employee-facing mobile apps has been relatively low in many Asian countries, putting the region’s companies behind their North American peers for the most part. I still speak with CIOs and marketing leaders about why they should have a mobility strategy or how they can help their employees stay productive regardless of location.
Don’t get me wrong: There are a lot of smartphones and tablets — particularly iPads — in businesses across the region. But many of these devices, especially the tablets, were personally acquired by employees — so they’re an “accessory tool,” not a core productivity tool; often, corporate tech management doesn’t support them and app-dev teams don’t develop for them.
Yesterday HP announced that it will be entering into a “non-equity joint venture” (think big strategic contract of some kind with a lot of details still in flight) to address the large-scale web services providers. Under the agreement, Foxcon will design and manufacture and HP will be the primary sales channel for new servers targeted at hyper scale web service providers. The new servers will be branded HP but will not be part of the current ProLiant line of enterprise servers, and HP will deliver additional services along with hardware sales.
The motivation is simple underneath all the rhetoric. HP has been hard-pressed to make decent margins selling high-volume low-cost and no-frills servers to web service providers, and has been increasingly pressured by low-cost providers. Add to that the issue of customization, which these high-volume customers can easily get from smaller and more agile Asian ODMs and you have a strategic problem. Having worked at HP for four years I can testify to the fact that HP, a company maniacal about quality but encumbered with an effective but rigid set of processes around bringing new products to market, has difficulty rapidly turning around a custom design, and has a cost structure that makes it difficult to profitably compete for deals with margins that are probably in the mid-teens.
Enter the Hon Hai Precision Industry Co, more commonly known as Foxcon. A longtime HP partner and widely acknowledged as one of the most efficient and agile manufacturing companies in the world, Foxcon brings to the table the complementary strengths to match HP – agile design, tightly integrated with its manufacturing capabilities.
On April 23, IBM rolled out the long-awaited POWER8 CPU, the successor to POWER7+, and given the extensive pre-announcement speculation, the hardware itself was no big surprise (the details are fascinating, but not suitable for this venue), offering an estimated 30 - 50% improvement in application performance over the latest POWER7+, with potential for order of magnitude improvements with selected big data and analytics workloads. While the technology is interesting, we are pretty numb to the “bigger, better, faster” messaging that inevitably accompanies new hardware announcements, and the real impact of this announcement lies in its utility for current AIX users and IBM’s increased focus on Linux and its support of the OpenPOWER initiative.
OK, so we’re numb, but it’s still interesting. POWER8 is an entirely new processor generation implemented in 22 nm CMOS (the same geometry as Intel’s high-end CPUs). The processor features up to 12 cores, each with up to 8 threads, and a focus on not only throughput but high performance per thread and per core for low-thread-count applications. Added to the mix is up to 1 TB of memory per socket, massive PCIe 3 I/O connectivity and Coherent Accelerator Processor Interface (CAPI), IBM’s technology to deliver memory-controller-based access for accelerators and flash memory in POWER systems. CAPI figures prominently in IBM’s positioning of POWER as the ultimate analytics engine, with the announcement profiling the performance of a configuration using 40 TB of CAPI-attached flash for huge in-memory analytics at a fraction of the cost of a non-CAPI configuration.[i]
A Slam-dunk for AIX users and a new play for Linux
Chief information officers (CIOs) are dedicating more of their budgets to what we call “systems of engagement” (technologies that help win, serve, and retain customers) rather than “systems of record” (back-office technologies). According to research here at Forrester, new business investment in the former will be eight times that of the latter in 2014. All of which means CIOs are re-examining their back-office legacy spend to see what savings can be made to fund new front-office innovations.
But releasing back-office spend is not easy. For many companies, most of the ‘easy’ savings have already been achieved - so squeezing even more savings has become a tougher game. For example, you can only try to re-negotiate legacy support costs a few times before the vendors say ‘enough is enough’. While such comments may have discouraged negotiators in past, the advent of third party software support in the last five years has, for Oracle and SAP users at least, kicked the cost savings door back open and given fresh impetus to procurement people seeking to reduce software support costs.
I am sure that many of you have read some of my previous comments on the emergence of the third party software support market over the past number of years. Companies like Rimini Street, Spinnaker Support and Alui have saved some Oracle and SAP clients a lot of money. For companies who have moved to third party support, or who have simply used the threat of moving to third party support in order to drive the vendor’s costs lower, the savings they are enjoying have freed up cash to spend on new innovations and front-office client engaging stuff.
It was five years ago, March 2009, when Cisco formally announced “Project California,” its (possibly intentionally) worst-kept secret, as Cisco Unified Computing System. At the time, I was working at Hewlett Packard, and our collective feelings as we realized that Cisco really did intend to challenge us in the server market were a mixed bag. Some of us were amused at their presumption, others were concerned that there might be something there, since we had odd bits and pieces of intelligence about the former Nuova, the Cisco spin-out/spin-in that developed UCS. Most of us were convinced that they would have trouble running a server business at margins we knew would be substantially lower than their margins in their core switch business. Sitting on top of our shiny, still relatively new HP c-Class BladeSystem, which had overtaken IBM’s BladeCenter as the leading blade product, we were collectively unconcerned, as well as puzzled about Cisco’s decision to upset a nice stable arrangement where IBM, HP and Dell sold possibly a Billion dollars’ worth of Cisco gear between them.
Five years later, HP is still number one in blade server units and revenue, but Cisco appears to be now number two in blades, and closing in on number three world-wide in server sales as well. The numbers are impressive:
· 32,000 net new customers in five years, with 14,000 repeat customers
· Claimed $2 Billion+ annual run-rate
· Order growth rate claimed in “mid-30s” range, probably about three times the growth rate of any competing product line.
It’s been a long wait, about four years if memory serves me well, since Intel introduced the Xeon E7, a high-end server CPU targeted at the highest performance per-socket x86, from high-end two socket servers to 8-socket servers with tons of memory and lots of I/O. In the ensuing four years (an eternity in a world where annual product cycles are considered the norm), subsequent generations of lesser Xeons, most recently culminating in the latest generation 22 nm Xeon E5 V2 Ivy Bridge server CPUs, have somewhat diluted the value proposition of the original E7.
So what is the poor high-end server user with really demanding single-image workloads to do? The answer was to wait for the Xeon E7 V2, and at first glance, it appears that the wait was worth it. High-end CPUs take longer to develop than lower-end products, and in my opinion Intel made the right decision to skip the previous generation 22nm Sandy Bridge architecture and go to Ivy Bridge, it’s architectural successor in the Intel “Tick-Tock” cycle of new process, then new architecture.
What was announced?
The announcement was the formal unveiling of the Xeon E7 V2 CPU, available in multiple performance bins with anywhere from 8 to 15 cores per socket. Critical specifications include:
Up to 15 cores per socket
24 DIMM slots, allowing up to 1.5 TB of memory with 64 GB DIMMs
Approximately 4X I/O bandwidth improvement
New RAS features, including low-level memory controller modes optimized for either high-availability or performance mode (BIOS option), enhanced error recovery and soft-error reporting
Last year, when attending my tenth Congress in a row, I wrote that MWC 2013 would be more global and more disruptive than ever before. I believe the same will be true this year, with 2014 bringing a very important milestone in the shift to mobile: an install base of more than 2 billion smartphones globally. Mobile is transforming every industry by offering global reach and the ability to offer contextual services. That’s why we'll see many more marketers, agencies, business executives, and strategists attend the traditional telecom show.
Gone are the days when MWC was about operators' supremacy. As my colleague Dan Bieler summed it up in this blog post, telcos are increasingly being backed into a corner. I still remember this quote from Arun Sarin, the former CEO of Vodafone, in the Financial Times in November 2007: “Just the simple fact we have the customer and billing relationship is a hugely powerful thing that nobody can take away from us.” Really? Well, in the meantime, Apple and Google have created two powerful mobile platforms that have disrupted entire industries and enabled new entrants to connect directly to customers.
From a marketing and strategy perspective, I'd categorize the likely announcements in three main areas:
1) The Asian Device Spec Fashion Week: Getting Lost In Device Translation