1. Cloud
Compu9ng’s
impact
on
the
Mul9-­‐tenant
Datacenter
Market
Antonio
Piraino,
Vice
President,
Tier1
Research

2. Cloud
Compu9ng
Impact
on
the
Datacenter
Market
1.
What’s
changing
in
the
market?
2.
Who
we
are
3.
Cloud
Compu9ng
in
Context
4.
The
Virtualiza9on
effect
5.
Where
to
Next?

3. What’s changed in the business Psyche?
Consumerization of IT Era

4. Datacenter/IT
Operators
Mindset
Change
• Datacenter
operators
are
realizing
the
benefits
of
ac9ng
like
Service
providers
within
their
own
facili9es
• Despite
the
hindrances
–
it
is
Important
to
start
somewhere

5. What are your customers asking for?
Other
Easy to use console
Brand-name
IT spend can move from capex-to-opex
Green IT
Tiered Billing system
SLA
Speed of provisioning
Reliability
Security
Flexibility
Low Cost
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

6. Why
is
being
Services
Oriented
Important?
§ “…make
and
receive
VoIP
phone
calls
from
your
§ “Google’s
vision
for
111
8th
Ave
acquisi9on
includes
Google
Voice
number
using
Google
Talk
on
the
colo
providers
and
network
carriers”
(December
desktop”
(June
2011)
2010)
§ “Microso^
just
spent
$8.5b
to
acquire
Skype,
the
§ “IBM
will
spend
$360
million
to
build
its
most
single
biggest
name
in
all
of
VoIP.”
(May
2011)
sophis9cated,
datacenter
in
RTP,
North
Carolina,
§ “Apple
just
unveiled
iMessage
at
WWDC,
a
free
for
businesses”
(2008)
messaging
system…offers
several
major
advantages
§ “As
the
race
for
VoIP
and
unified
communica9ons
over
SMS.”
(June
2011)
heats
up,
Salesforce
leaps
into
ac9on
and
picks
up
§ “Facebook’s150,000
square
foot
datacenter
opened
VSee.”
(June
2011)
in
Oregon…
with
another150,000
square
foot
§ “We're
excited
to
announce
the
launch
of
live
HTTP
facility
to
follow
(April
2011)
streaming
for
Amazon
CloudFront.”

7. Tech
Bubble
2.0?
“Facebook
reached
750m
users;
7
billion
pieces
of
content
shared
on
the
site
weekly
• La9noamérica
suma
118
millones
de
usuarios
de
Facebook
• Orkut
remains
biggest
with
>500k
visitors/month
“Apple’s15bn
app
store
downloads
is
growing
9
Ames
faster
than
Macdonald’s”
(A.Love)
• Search
and
Social
networks
receive
more
hits
that
ecommerce
sites
• Informa9on,
collabora9on
and
business
produc9vity
“Google
Android
550,000
a
day,
160m
Chrome
users,
$37bn
cash,
$200bn
market
cap”
• Google
has
90%
market
share
in
LatAm
(for
search)
• And
fastest
Google
audience
growth
is
from
LatAm
“TwiQer's
July
membership
increased
50,000
per
day
with
95
million
tweets
a
day”
• In
October
2010,
Brazil
was
Twimer’s
#1
market
• “LinkedIn
added
up
to
$102/share
with
$470m
revenue
and
over
100m
users”
• LatAm
has
over
8.5m
members
Facebook,
Groupon,
Zynga,
LivingSocial,
TwiQer,
LinkedIn,
Pandora
($3bMarket
Cap
=
16x
Revenue),
Zillow:
$3.5
billion
revenue;
$200bn
Market
Cap.
• The
number
of
internet
users
in
Latam
has
been
increasing
at
double
the
rate
of
popula9on
increase
(15%
2009/10)
• Boom
is
s9ll
coming
Do
Not
Confuse
with
Cloud
Compu3ng!

8. Cloud
Compu9ng
Impact
on
the
Datacenter
Market
1.
What’s
changing
in
the
market
2.
Who
we
are
4.
Cloud
Compu9ng
in
Context
4.
The
Virtualiza9on
effect
5.
Where
to
Next?

9. The
451
Group
451
Research
is
focused
on
the
business
of
enterprise
IT
innova9on.
The
company’s
analysts
provide
cri9cal
and
9mely
insight
into
the
compe99ve
dynamics
of
innova9on
in
emerging
technology
segments.
Tier1
Research
is
a
single-­‐source
research
and
advisory
firm
covering
the
mul9-­‐tenant
datacenter,
hos9ng,
IT
and
cloud-­‐compu9ng
sectors,
blending
the
best
of
industry
and
financial
research.
The
Up9me
Ins9tute
is
‘The
Global
Data
Center
Authority’
and
a
pioneer
in
the
crea9on
and
facilita9on
of
end-­‐user
knowledge
communi9es
to
improve
reliability
and
uninterrup9ble
availability
in
datacenter
facili9es.
TheInfoPro
is
a
leading
IT
advisory
and
research
firm
that
provides
real-­‐world
perspec9ves
on
the
customer
and
market
dynamics
of
the
enterprise
informa9on
technology
landscape,
harnessing
the
collec9ve
knowledge
and
insight
of
leading
IT
organiza9ons
worldwide.
ChangeWave
Research
is
a
research
firm
that
iden9fies
and
quan9fies
‘change’
in
consumer
spending
behavior,
corporate
purchasing,
and
industry,
company
and
technology
trends.

10. Datacentre
Selec9on
Report
!
Consumption: 2,000 Consumption: 24,000
MWh/year MWh/year
See note 1. See note 2.
Effective: September '10 Effective: September '10
Austria ! 0.1031 Austria ! 0.0754
Belgium ! 0.1070 Belgium ! 0.0779
Bulgaria ! 0.0635 Bulgaria ! 0.0496
Cyprus ! 0.1592 Cyprus ! 0.1113
Czech Republic ! 0.1138 Czech Republic ! 0.0942
./*0&1"0&$ 2*0*%"#,*'$ 3'#&(4 5"'"6&-$
!"#"$%&'#(&$)(*+,-&($ !"#"$%&'#(&$ %*''&%#,*'$ 7*1#,'6$
Denmark ! 0.0948 Denmark ! 0.0890
Estonia ! 0.0645 Estonia ! 0.0449
8(9$2*'#,':,#;$ !" !" " "
Finland ! 0.0681 Finland ! 0.0559
France ! 0.0619 France ! 0.0519
<=$ " !" " !" Germany ! 0.1134 Germany ! 0.0848
Greece ! 0.0946 Greece ! 0.0790
20"("'&#$ " !" " !" Hungary ! 0.1314 Hungary ! 0.0961
!
2>?=$ " !" !" "
10
!,6,#"0$@&"0#;$=(:1#$ !" " " "
!"#"A"('$ " !" !" "
"

11. MTDC
Supply
Reports
11

12. Cloud
Compu9ng
Impact
on
the
Datacenter
Market
1.
What’s
changing
in
the
datacenter
world
2.
Who
we
are
3.
Cloud
Compu9ng
in
Context
4.
The
Virtualiza9on
effect
5.
Where
to
Next?

13. Context
of
the
Datacenter
Industry
IP
Cloud
Cloud
Compu9ng
Plaqorms

14. Evolu9on
of
Managed
Hos9ng
Sector

15. Virtualiza9on
• Roots
in
the
1960’s
as
a
way
to
par99on
large,
expensive
mainframe
systems
into
smaller
units
that
can
operate
independently
of
each
other,
thereby
maximizing
capital
investment.
• Abandoned
through
the
desktop
PC
wave
(80’s),
the
Client/Server
wave
(90’s).
• Then
in
1999,
“VMware
Worksta9on”
was
released
from
a
small
Palo
Alto,
CA
startup.
Ini9al
benefits…
§ More
efficient
use
of
compute
capacity.
§ Faster
provisioning
for
new
business
ini9a9ves,
training,
dev/test,
lab
environments,
etc.
§ Lower
labor
cost
for
install,
upgrade,
backup,
restore,
move
opera9ons.
• Physical
servers
are
only
ever
racked
once.
• Moving
virtual
servers
as
easy
as
copying
a
file.
• Some
mi9ga9ng
costs
in
complexity,
licensing,
manageability

16. Virtualiza9on

17. Virtualiza9on

18. Virtualiza9on

19. Virtualiza9on

20. The
Cloud
Compu9ng
Layers

21. The
Cloud
Compu9ng
Layers

22. The
Cloud
Compu9ng
Layers

23. Aggregate Cloud ‘As a Service’ Market
CAGR
~25%

24. Growth in the Rest of the Market
Internet
Infrastructure
Market
2009-­‐2013
$65,000
$60,000
$55,000
$50,000
$45,000
Revenue
(US$m)
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
2009
2010
2011*
2012*
2013*

25. Cloud
Compu9ng
Impact
on
the
Datacenter
Market
1.
What’s
changing
in
the
datacenter
world
2.
Who
we
are
3.
Cloud
Compu9ng
in
Context
4.
The
Virtualiza9on
effect
on
datacenters
5.
Where
to
Next?

26. Cloud
Criteria
vs.
Architecture
Cloud Criteria Cloud Architecture
þ
Publically Accessible
þ
Programmatic management 4 Public Cloud Services
interfaces
þ
Multi-tenant Architecture
þ
Accounting Granularity and 3 Private Enterprise Cloud
Cost Allocation
þ
Scalability and elasticity
þ
Rich Web management 2 Cloud-like Enterprise Architecture
capabilities
þ
Rapid Provisioning and
Self Service
1 Modern Enterprise Architecture
þ
Virtualization and
Hardware
Independence

27. How
far
have
we
gone?
§ VKernel
analyzed
550,000
virtual
machines
across
2500
deployments
and
found
average
consolida9on
of
12.5-­‐15.6
virtual
machines
per
physical
host
(8-­‐10
for
larger
organiza9ons).
§ Apps
on
virtual
infrastructure
will
exceed
those
on
physical
servers
>
50%
41%-­‐50%
31%-­‐40%
21%-­‐30%
11%-­‐20%
2010
5%-­‐10%
2011
<
5%
0%
20%
40%
60%
80%
100%

28. Impact
on
the
Next
Genera9on
Data
Center
• The
de
facto
“atomic
unit”
in
the
next
genera9on
datacenter
is
the
virtual
machine.
• Increased
focus
on
IT
governance
(i.e.:
ITIL),
otherwise
inevitable
VM
sprawl
will
result
in
every
trivial
process
having
its
own
server
(and
OS
license).
• No
labeling
servers
with
s9cky
nametags.
Rack
once,
never
touch
again
–
“fail
in
place”
(Google
rack)
approach.
Less
reac9ve
break/fix
management,
more
proac9ve/rou9ne/scheduled.

29. Impact
on
the
Next
Genera9on
Data
Center
• Movement
towards
“best
execu9on
environment”
approach
to
IT,
hybrid
balancing
act
of
CapEx
vs.
OpEx
via
on-­‐premise
and
off-­‐premise.
• Almost
all
servers
–
even
systems
that
are
absolutely
mission
cri9cal
-­‐
will
eventually
be
virtualized,
even
if
at
a
1:1
ra9o.

30. Vmo9on
&
2nd
order
effects
of
Virtualiza9on
• Significant
implica9ons
for
IT…
• Reduced
“maintenance
window”
down9me
for
cri9cal
applica9ons.
• More
op9ons
for
hot
BC/DR
needs

31. Power
density
and
cooling
challenges
§ 42U’s
worth
of
servers
at
5-­‐15%
u9liza9on
has
different
power
demand
than
42U’s
worth
of
servers
at
70-­‐80+%
u9liza9on.
§ Overall
power
usage
in
a
virtualized
environment
decreases,
but
density
increases.

32. Power
density
and
cooling
challenges
Dell
example
§ PowerEdge
2650
running
a
test
workload
at
30%
CPU
consumed
290
wams.
§ Consolidated
eight
(8)
of
those
systems
onto
a
single
PowerEdge
2950,
reaching
80%
of
CPU.
System
consumed
440
wams
at
sustained
load.
§ Net
power
savings
2,320
–
440
=
1,880
§ However,
original
load
was
in
16U
for
145
wams/U.
New
load
of
440
in
2U
is
220
wams/U.
>50%
increase.
6kW/rack
-­‐>
9.2kW/rack.
Jevon’s
Paradox,
1865/Rebound
effect:
Technological
progress
that
increases
the
efficiency
with
which
a
resource
is
used
tends
to
increase
the
rate
of
consumpAon
of
that
resource.

33. Pondering
the
Next
Genera9on
Data
Center
• Planning
for
the
future?
• APC
Virtualiza9on
Energy
Cost
Calculator
• Visio
2007
Add-­‐In
for
Rack
Server
Virtualiza9on

34. Pondering
the
Next
Genera9on
Data
Center
“Accordion
IT”
§ VMware
Distributed
Resource
Scheduler
(DRS)
paired
with
Distributed
Power
Management
(DPM)
can
automa9cally
shuffle
virtualized
machines
between
hosts,
consolidate
to
as
few
hosts
as
needed
during
low
u9liza9on,
and
power
off
physical
machines
when
not
needed.
“Migratory
IT”
§ Take
“Accordion
IT”,
and
then
add
geographic
migra9on
across
datacenters/states
based
on
electricity
spot
pricing
(i.e.:
“follow
the
moon”).
Cisco
Overlay
Transport
Virtualiza9on.
§ Intelligent
integra9on
of
VM
controls
and
datacenter
facility
controls
-­‐
if
all
VMs
are
moved
out
of
a
sec9on
of
datacenter
and
servers
powered
down,
no
need
to
cool
it.

35. Pondering
the
Next
Genera9on
Data
Center
Other
interes9ng
possibili9es?
§ Virtual
servers
fly
around
the
data
center,
risk
overloading
a
circuit?
Traveling
hot
spots?
§ Fanless
servers?
Microso^
is
trying
to
experiment
with
that,
disrupts
PUE
-­‐
but
less
power
consumed
for
equivalent
compute
load.
Rackable
(SGI)
“CloudRack”.
§ Pulse
width
modula9on
(PWM)
on
server
fans
• Facebook
is
trying
that
out
in
conjunc9on
with
cold
aisle
containment
&
other
improvements.

36. Cloud
Compu9ng
Impact
on
the
Datacenter
Market
1.
What’s
changing
in
the
datacenter
world
2.
Who
we
are
3.
Cloud
Compu9ng
in
Context
4.
The
Virtualiza9on
effect
on
datacenters
5.
Where
to
Next
with
Cloud
Compu9ng?

37. Winners
in
the
Cloud
hmp://www.cloudgirlfriend.com/

38. Future
IT
Topology
Inves9ga9on
of
Cloud
Compu9ng
Enterprise
Internal
Yes
Based on
External
Services
No
Both
2H '09
2H '09 1H '10
1H '10 2H '10
2H '10
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%

39. Ini9ator
of
Cloud
Projects
Who
put
your
organiza9on's
cloud
project
in
mo9on?
IT
Data
Center
CIO
LOB
CTO
IT
So^ware
CEO
0%
10%
20%
30%
40%
50%
Final
Cloud
W2:
Full
Sample.
n=51.

40. Which format of Cloud?
!

41. Solving
Apps
Performance
Challenges
BUSINESS
CRITICALITY
Best
Effort
Priority
Real-­‐Time
Proximity
>100ms
<100ms
<
50ms
<
5ms
>2000km
<
2000km
<
500km
<
50km
LATENCY
SENSITIVITY

42. Compute model increasingly complex
• Means More work and complexity
• Means more challenges in meeting SLAs

43. Management, Control & Transparency importance
Operating Systems Servers
Storage Networks Databases
Performance
&
Availability
Asset
Even9ng
Video Cloud
Ticke9ng
43

44. Not
a
fad…
This
is
Next-­‐Gen
Business

45. Ques9ons!
Antonio
Piraino,
Vice
President
www.9er1research.com
www.the451group.com