Server evolution and power prices promise data centre challenges

The Open Compute Project (OCP), a user-led organization whose members include Facebook, Goldman Sachs and NTT Data, wants to see the core components of system design, including processor, motherboard and networking interconnects, “disaggregated” so they can be upgraded independently. The scheme is in marked contrast to the current industry trend of converged systems combining servers, storage and networking into a single system.

Convergence has gained some traction with customers in recent years, due to the relative ease and speed of deployment that pre-integrated systems enable. But there are trade-offs in terms of cost and vendor lock-in. For the largest data centres, buying systems at a more granular component layer promises more flexibility, higher density and significant cost reductions.

“Current monolithic designs can’t easily be customized to fit specific workload requirements or to maximize efficiency,” said John Abbott, Distinguished Analyst at 451 Research. “Customers can’t, for instance, take advantage of the latest high performance CPU without having to upgrade surrounding technologies that are still operating well.”
Just how much of an opportunity or threat such developments pose to the traditional systems and storage vendors was discussed in depth during a session at The 451 Group’s recent Hosting and Cloud Transformation Summit in London on April 10th: Converged IT infrastructure – Adoption and Impact.

451 Research’s report follows the OCP’s recent unveiling of two key projects to kick-start disaggregation: low-latency interconnects using silicon photonics for linking components at both the motherboard and the rack layer; and a new common slot architecture that should enable fully vendor-neutral motherboards to remain in use through multiple processor generations. Chip giant Intel has contributed its silicon photonics technology, and the Taiwanese systems maker Quanta has built a prototype to prove the concept out.

“It’s a radical step, and a more granular level of standardization than the big system vendors have ever quite managed – or perhaps wanted - to implement on their own,” said Abbott. “And it’s already opening the door to a new set of system suppliers more accustomed to building systems to order and within a tight budget: the original design manufacturers (ODMs).”
Large data centres could benefit from deploying their CPUs, I/O, memory and storage in separate racks, enabling upgrades to take place independently, eliminating performance bottlenecks and improving such operational aspects as reliability, utilization, footprint and energy efficiency. And over time, smaller customers could see similar benefits. But there’s plenty of work to be done: standards must replace the current open hardware specifications, and these must then be married seamlessly with modular, interoperable and stable open software stacks, tying the disaggregated components back together again through systems management products.

Power prices
Low and stable electricity prices are likely to make the US a target for data centre investment at Europe’s expense; lower electricity prices are also expected to impact US investment in energy-efficient technologies.

The reason for this unexpected price stability in the U.S. is its booming shale gas industry. As a result, the energy bill for a medium-sized 2MW data centre in the U.S. with 50% baseload energy consumption could be as much as $500,000 a year less than a comparable facility in the UK – and about $750,000 less than one in Germany.
Electricity prices in some European countries, particularly Germany, are already twice those in the U.S. and prices have more than doubled in countries such as the UK, France and Germany during the past decade, while they have held mostly flat in the U.S.

The price of power can significantly alter the overall lifetime cost of a data centre. Assuming a 15-year lifespan, a price of $0.067/kWh contributes about 30% of a facility’s operating expense and usually accounts for 10-15% of the total cost of building and running a data centre. “This figure is large enough to sway decisions about where a data centre should be built,” said Andy Lawrence, Research Vice President, Data centre Technologies (DCT) & Eco-Efficient IT, 451 Research, who co-authored the report with Rhonda Ascierto, Senior Analyst, 451 Research.

“The effect on data centre-technology providers is contradictory. The growth of U.S. data centre activity and investment will boost the market for equipment of all kinds but may limit demand for certain energy-efficient data centre technologies, especially where there
is a trade-off with risk and availability. However, with its higher energy prices, the European market should be more attractive to suppliers of technology that improve data centre efficiency,” Lawrence added.

Worldwide IT spending to reach $3.8 trillion in 2013

Worldwide IT spending is projected to total $3.8 trillion in 2013, a 4.1 percent increase from 2012 spending of $3.6 trillion, according to the latest forecast by Gartner, Inc. Currency effects are less pronounced this quarter with growth in constant dollars forecast at 4 percent for 2013.
The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

“Although the United States did avoid the fiscal cliff, the subsequent sequestration, compounded by the rise of Cyprus’ debt burden, seems to have netted out any benefit, and the fragile business and consumer sentiment throughout much of the world continues,” said Richard Gordon, managing vice president at Gartner. “However, the new shocks are expected to be short-lived, and while they may cause some pauses in discretionary spending along the way, strategic IT initiatives will continue.”
Worldwide devices spending (which includes PCs, tablets, mobile phones and printers) is forecast to reach $718 billion in 2013, up 7.9 percent from 2012 (see Table 1). Despite flat spending on PCs and a modest decline in spending on printers, a short-term boost to spending on premium mobile phones has driven an upward revision in the devices sector growth for 2013 from Gartner’s previous forecast of 6.3 percent.

“The global steady growth rates are a calm ocean that hides turbulent currents beneath,” said John Lovelock, research vice president at Gartner. “The Nexus of Forces - social, mobile, cloud and information - are reshaping spending patterns across all of the IT sectors that Gartner forecasts. Consumers and enterprises will continue to purchase a mix of IT products and services; nothing is going away completely. However, the ratio of this mix is changing dramatically and there are clear winners and losers over the next three to five years, as we see more of a transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, or the shift in voice and data connections from fixed to mobile.”

The outlook for 2013 for data center systems spending is forecast to grow 3.7 percent in 2013, down 0.7 percent from Gartner’s previous forecast. This reduction is largely due to cuts to the near-term forecast for spending on external storage and the enterprise in the economically troubled EMEA region.