Cloud infrastructure-as-a-service (IaaS) is a hot market. Amazon Web Services, now five years old, drives a lot of attention and customer volume, but the vendor strategists at enterprise-facing providers such as IBM, HP, AT&T and Verizon have been building and delivering IaaS offerings. As I’ve studied the market, I’ve heard wildly different types of requirements from buyers and quite a range of offerings from service providers. Yet much of the industry dialogue is about one central idea of what IaaS is – think that’s wrong headed. I found that there were really two buyer types: 1) informal buyers outside of the IT operations/data center manager organizations, such as engineers, scientists, marketing executives, and developers, and 2) formal buyers, the IT operations and data center managers responsible for operating applications and maintaining infrastructure.
With this idea in mind, I set out to test the views of IT infrastructure buyers in the Forrsights Hardware Survey, Q3 2010 and learned that:
After 2+ years of cloud hype, only 6% of enterprises IT infrastructure respondents report using IaaS, with another 7% planning to implement by Q3, 2012. After flat adoption from 2008 to 2009, this represents an approximate doubling from 2009, off a very small base.
Almost two thirds of IT infrastructure buyers themselves don’t believe they are the primary buyer of cloud IaaS! We asked them which groups in their company are using or most interested in cloud IaaS. Only 36% of IT infrastructure buyers listed themselves, while 7% didn’t know. The rest, 58% said that IT developers, Web site owners, business unit owners of batch compute intensive apps, and other business unit developers were more interested in using IaaS than themselves.
Oracle announced today that it is going to cease development for Itanium across its product line, stating that itbelieved, after consultation with Intel management, that x86 was Intel’s strategic platform. Intel of course responded with a press release that specifically stated that there were at least two additional Itanium products in active development – Poulsen (which has seen its initial specifications, if not availability, announced), and Kittson, of which little is known.
This is a huge move, and one that seems like a kick carefully aimed at the you know what’s of HP’s Itanium-based server business, which competes directly with Oracle’s SPARC-based Unix servers. If Oracle stays the course in the face of what will certainly be immense pressure from HP, mild censure from Intel, and consternation on the part of many large customers, the consequences are pretty obvious:
Intel loses prestige, credibility for Itanium, and a potential drop-off of business from its only large Itanium customer. Nonetheless, the majority of Intel’s server business is x86, and it will, in the end, suffer only a token loss of revenue. Intel’s response to this move by Oracle will be muted – public defense of Itanium, but no fireworks.
Forrester’s Forrsights Software Survey, Q4 2010 has quantified for the first time how enterprise demand is shifting from traditional licensing models to subscriptions and other licensing models, such as financing and license leasing. However, the shift to subscriptions for business-applications-as-a-service is the major driver of this change. Traditional enterprise licenses are slowly decreasing, and Forrester predicts that subscriptions for SaaS applications will drive alternative license spending up to 29% — as early as 2011. This demand-side change goes beyond front-office applications like CRM. In 2011 and 2012, enterprises will opt for “as-a-service” subscriptions for more back-office applications, such as ERP, instead of licensed and on-premise installations. Detailed data cuts by company size and region are available to clients from our Forrsights service.
Base: 622 (2007), 1,026 (2008), 537 (2009), and 930 (2010) software decision-makers predicting license spending for the coming year Source: Enterprise And SMB Software Survey, North America And Europe, Q3 2007; Enterprise And SMB Software Survey, North America And Europe, Q4 2008; Enterprise And SMB Software Survey, North America And Europe, Q4 2009; Forrsights Software Survey, Q4 2010
What does this means for existing independent software vendors (ISVs) and infrastructure vendors?
This week at ISSCC, Intel made its first detailed public disclosures about its upcoming “Poulson” next-generation Itanium CPU. While not in any sense complete, the details they did disclose paint a picture of a competent product that will continue to keep the heat on in the high-end UNIX systems market. Highlights include:
Process — Poulson will be produced in a 32 nm process, skipping the intermediate 45 nm step that many observers expected to see as a step down from the current 65 nm Itanium process. This is a plus for Itanium consumers, since it allows for denser circuits and cheaper chips. With an industry record 3.1 billion transistors, Poulson needs all the help it can get keeping size and power down. The new process also promises major improvements in power efficiency.
Cores and cache — Poulson will have 8 cores and 54 MB of on-chip cache, a huge amount, even for a cache-sensitive architecture like Itanium. Poulson will have a 12-issue pipeline instead of the current 6-issue pipeline, promising to extract more performance from existing code without any recompilation.
Compatibility — Poulson is socket- and pin-compatible with the current Itanium 9300 CPU, which will mean that HP can move more quickly into production shipments when it's available.
Since its introduction of its Core 2 architecture, Intel reversed much of the damage done to it by AMD in the server space, with attendant publicity. AMD, however, has been quietly reclaiming some ground with its 12-core 6100 series CPUs, showing strength in benchmarks that emphasize high throughput in process-rich environments as opposed to maximum performance per core. Several AMD-based system products have also been cited by their manufacturers to us as enjoying very strong customer acceptance due to the throughput of the 12-core CPUs combined with their attractive pricing. As a fillip to this success, AMD this past week announced speed bumps for the 6100-series products to give a slight performance boost as they continue to compete with Intel’s Xeon 5600 and 7500 products (Intel’s Sandy Bridge server products have not yet been announced).
But the real news last week was the quiet subtext that the anticipated 16-core Interlagos products based on the new Bulldozer core appear to be on schedule for Q2 ’11 shipments system partners, who should probably be able to ship systems during Q3, and that AMD is still certifying them as compatible with the current sockets used for the 12-core 6000 CPUs. This implies that system partners will be able to quickly deliver products based on the new parts very rapidly.
Actual performance of these systems will obviously be dependent on the workloads being run, but our gut feeling is that while they will not rival the per-core performance of the Intel Xeon 7500 CPUs, for large throughput-oriented environments with high numbers of processes, a description that fits a large number of web and middleware environments, these CPUs, each with up to a 50% performance advantage per core over the current AMD CPUs, may deliver some impressive benchmarks and keep the competition in the server space at a boil, which in the end is always helpful to customers.
Last week IBM and ARM Holdings Plc quietly announced a continuation of their collaboration on advanced process technology, this time with a stated goal of developing ARM IP optimized for IBM physical processes down to a future 14 nm size. The two companies have been collaborating on semiconductors and SOC design since 2007, and this extension has several important ramifications for both companies and their competitors.
It is a clear indication that IBM retains a major interest in low-power and mobile computing, despite its previous divestment of its desktop and laptop computers to Lenovo, and that it will be in a position to harvest this technology, particularly ARM's modular approach to composing SOC systems, for future productization.
For ARM, the implications are clear. Its latest announced product, the Cortex A15, which will probably appear in system-level products in approximately 2013, will be initially produced in 32 nm with a roadmap to 20nm. The existence of a roadmap to a potential 14 nm product serves notice that the new ARM architecture will have a process roadmap that will keep it on Intel’s heels for another decade. ARM has parallel alliances with TSMC and Samsung as well, and there is no reason to think that these will not be extended, but the IBM alliance is an additional insurance policy. As well as a source of semiconductor technology, IBM has a deep well of systems and CPU IP that certainly cannot hurt ARM.
From nothing more than an outlandish speculation, the prospects for a new entrant into the volume Linux and Windows server space have suddenly become much more concrete, culminating in an immense buzz at CES as numerous players, including NVIDIA and Microsoft, stoked the fires with innuendo, announcements, and demos.
Consumers of x86 servers are always on the lookout for faster, cheaper, and more power-efficient servers. In the event that they can’t get all three, the combination of cheaper and more energy-efficient seems to be attractive to a large enough chunk of the market to have motivated Intel, AMD, and all their system partners to develop low-power chips and servers designed for high density compute and web/cloud environments. Up until now the debate was Intel versus AMD, and low power meant a CPU with four cores and a power dissipation of 35 – 65 Watts.
The Promised Land
The performance trajectory of processors that were formerly purely mobile device processors, notably the ARM Cortex, has suddenly introduced a new potential option into the collective industry mindset. But is this even a reasonable proposition, and if so, what does it take for it to become a reality?
Our first item of business is to figure out whether or not it even makes sense to think about these CPUs as server processors. My quick take is yes, with some caveats. The latest ARM offering is the Cortex A9, with vendors offering dual core products at up to 1.2 GHz currently (the architecture claims scalability to four cores and 2 GHz). It draws approximately 2W, much less than any single core x86 CPU, and a multi-core version should be able to execute any reasonable web workload. Coupled with the promise of embedded GPUs, the notion of a server that consumes much less power than even the lowest power x86 begins to look attractive. But…
NetApp recently announced that it was acquiring Akorri, a small but highly regarded provider of management solutions for virtualized storage environments. All in all, this is yet another sign of the increasingly strategic importance of virtualized infrastructure and the need for existing players, regardless of how strong their positions are in their respective silos, to acquire additional tools and capabilities for management of an extended virtualized environment.
NetApp, while one of the strongest suppliers in the storage industry, not only faces continued pressure from not only EMC, which owns VMware and has been on a management software acquisition binge for years, but also renewed pressure from IBM and HP, who are increasingly tying their captive storage offerings into their own integrated virtualized infrastructure offerings. This tighter coupling of proprietary technology, while not explicitly disenfranchising external storage vendors, will still tighten the screws slightly and reduce the number of opportunities for NetApp to partner with them. Even Dell, long regarded as the laggard in high-end enterprise presence, has been ramping up its investment management and ability to deliver integrated infrastructure, including both the purchase of storage technology and a very clear signal with its run at 3Par and recent investments in companies such as Scalent (see my previous blog on Dell as an enterprise player and my colleague Andrew Reichman’s discussion of the 3Par acquisition) that it wants to go even further as a supplier of integrated infrastructure.
I’ve recently had the opportunity to talk with a small sample of SLES 11 and RH 6 Linux users, all developing their own applications. All were long-time Linux users, and two of them, one in travel services and one in financial services, had applications that can be described as both large and mission-critical.
The overall message is encouraging for Linux advocates, both the calm rational type as well as those who approach it with near-religious fervor. The latest releases from SUSE and Red Hat, both based on the 2.6.32 Linux kernel, show significant improvements in scalability and modest improvements in iso-configuration performance. One user reported that an application that previously had maxed out at 24 cores with SLES 10 was now nearing production certification with 48 cores under SLES 11. Performance scalability was reported as “not linear, but worth doing the upgrade.”
Overall memory scalability under Linux is still a question mark, since the widely available x86 platforms do not exceed 3 TB of memory, but initial reports from a user familiar with HP’s DL 980 verify that the new Linux Kernel can reliably manage at least 2TB of RAM under heavy load.
File system options continue to expand as well. The older Linux FS standard, ETX4, which can scale to “only” 16 TB, has been joined by additional options such as XFS (contributed by SGI), which has been implemented in several installations with file systems in excess of 100 TB, relieving a limitation that may have been more psychological than practical for most users.
Two months ago, we announced our upcoming Forrester Forrsights Software Survey, Q4 2010. Now the data is back from more than 2,400 respondents in North America and Europe and provides us with deep and sometimes surprising insights into the software market dynamics of today and the next 24 months.
We’d like to give you a sneak preview of interesting results around some of the most important trends in the software market: cloud computing integrated information technology, business intelligence, mobile strategy, and overall software budgets and buying preferences.
Companies Start To Invest More Into Innovation In 2011
After the recent recession, companies are starting to invest more in 2011, with 12% and 22% of companies planning to increase their software budgets by more than 10% or between 5% and 10%, respectively. At the same time, companies will invest a significant part of the additional budget into new solutions. While 50% of the total software budgets are still going into software operations and maintenance (Figure 1), this number has significantly dropped from 55% in 2010; spending on new software licenses will accordingly increase from 23% to 26% and custom-development budgets from 23% to 24% in 2011.
Cloud Computing Is Getting Serious
In this year’s survey, we have taken a much deeper look into companies’ strategies and plans around cloud computing besides simple adoption numbers. We have tested to what extent cloud computing makes its way from complementary services into business critical processes, replacing core applications and moving sensitive data into public clouds.