The Future of Servers in Cloud Computing

The Future of Servers

in Cloud Computing

Jean S. Bozman

Research Vice President

IDC Enterprise Platforms Group

Agenda

Market Drivers for Change

Directions in Cloud Computing

Server Installed Base:

The Evolution From Physical to Virtual

0 25,000,000 50,000,000 75,000,000 100,000,000 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 WW Server IB

Virtualization Leaves its Mark and Primes the Market for Change

Server s WW Server Shipments WW Virtual Server IB ’09-’13 CAGR 31.5% 0.6% 6.5%

2011 Mobile Devices & Apps Mobile Broadband Cloud Services Social Business Big Data/ Analytics

The Third Platform for Industry Growth

PC LAN/ Internet Client- Server 1986 Millions of Users Thousands of Apps Hundreds of Millions

of Users Tens of Thousands _{of Apps}

Billions

Millions

Trillions

• 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

Agenda

Shifting IT Spend

Private Cloud Computing is the near term cloud strategy for the Enterprise

Q. Please estimate how much of your company's IT budget will be allocated to buying and managing these different types of IT services

IDC’s Cloud Computing Survey, December 2010 n=603 49% 37% 16% 16% 13% 19% 11% 15% 11% _13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Today 24 Months Public Cloud

Private cloud - Hosted

Private Cloud Inhouse

Outsourced IT

Servers for the Cloud:

Private Cloud Still 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 2011-2015 Forecast, IDC #228916, July, 2011.

Cloud Penetration Rates (2012 Data):

Hardware and Software – 2011-2016

WW Server IB WW Server Shipments WW Virtual Server IB 0% 5% 10% 15% 20% 25% 2011 2012 2013 2014 2015 2016 Cloud Penetration Software Hardware

Cloud Benefits and Challenges

-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

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

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 Reliability Availability, Security, Total Cost Time to Deploy Pay for Use Collaboration

What’s Moving to Public Cloud?

Source: IDC's North American Cloud Survey, January 2011 n = 603 (Dir IT and above)

Q. Which applications and IT functions do you consider MOST SUITABLE for Public Cloud implementations?

0 10 20 30 40 50 60 70

Business apps (excl ERP) ERP (Financials) TechApps (design, eng, R&D) ERP (HR) Collaboration Apps (excl email) Email 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

5000+ All <500 users +5% +5% +3% +11% +12% +9% +13% +7%

Agenda

Drive Towards Cloud Infrastructure:

Servers, Storage and Network

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 40% 30% 15% Capability is Diverging 20% 50% 30% Moore’s Law TBs CAGR Cores Compute Storage AD Network Gb Gb/P Value/Margin Has Shifted

But the Application Remains Control Point in Datacenter

Servers

Network Storage

Nov-12 © 2010 IDC

“ Density optimized servers are designed for large-scale datacenter environments where parallelized workloads are prevalent. The form factor serves the unique needs of these datacenters with streamlined system designs that focus on performance, energy efficiency, and

density.”

“These systems are typically deployed in fully

assembled rack configurations; use case examples include ecommerce, cloud computing, online game hosting, social networking sites, dedicated hosting, Hadoop, and HPC (high performance computing).”

• IDC Worldwide and Regional Server 2012-2016 Forecast Update

• IDC Document # 237439, November, 2012

 Server Density is Increasing

• Systems on a Chip (SOCs): Less cabling, fewer components

• Server Processors as “Neighbors” to Local Storage, More Cache • 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

• Server I/O is Speeding Up

• Downsizing the System “Board” for High Performance • Smaller Distances Between Components

Worldwide Growth of Cloud Services,

2011-2016

Total Cloud Services

Revenue in $M (USD)

Source: IDC Cloud Black Book, 2012

• In cloud servers, it’s a start-over environment, with cloud-specific requirements. Growing from $5.2B to

$9.4B in five years (2001-2015). 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.

Nov-12 © 2010 IDC

Questions?