Cisco’s timing for Unified Computing System - a tad off?

Does anyone else think it is a bad idea for Cisco Systems to enter the server market when the industry is experiencing the most significant year-over-year sales decline in history?

Worldwide server revenue declined 24 percent in the first quarter of 2009 and shipments dropped 24.2 percent compared to the first quarter of 2008, and no one went unscaved; all of the top five global server vendors - IBM, HP, Dell, Sun and Fujitsu/Fujitsu Siemens - saw double-digit revenue declines for the first quarter of 2009, according to Gartner, Inc.

Worldwide: Server Vendor Shipment Estimates, 1Q09 (Units)

Source: Gartner (June 2009)

Meanwhile, Cisco is marketing the hell out of its upcoming Unified Computing System (UCS), which is rumored to start shipping in a couple of weeks. The company has been offering tid bits of information about UCS through webcasts for months to build anticipation for the system. For instance, yesterday. Cisco announced it would offer rackmount servers in addition to blades.

But once the drumroll for UCS dies and the system actually ships, who’s buying?

I would love to be a fly on the wall in a Cisco executive meeting to hear their strategy with UCS. Do Cisco executives really think this is a good time to introduce an entirely new server system? And are they arrogant enough to think they can beat IBM, Dell and HP at their own game?

HP to add SSD memory option to servers

Frank Baetke of Hewlett Packard’s Scalable Computing & Infrastructure (SCI) organization just gave me an update of what HP is doing to add power efficiencies to its highest performing servers, and one answer is the addition of Solid State Disks (SSD).

Though HP has not made any official announcements regarding the addition of SSD, and Baetkey could not give any details about the release date or which servers will have them, he said SSD is a greener alternative to spinning hard disks because SSD’s have no moving parts that consume power.

Instead of having spinning parts like hard disks, SSD’s are based on flash memory, can be up to hundreds of times faster than hard drives and use less power than traditional hard drives.

Intel Corp., Samsung, STEC Inc., Violin Memory andTexas Memory System are all offering flash SSD products today. Around October of last year, Texas Memory introduced a 20 TB flash SSD module that delivers one million inputs/outputs per second (IOPS), theRamSan-5000, which is essentially an array of flash solid state disks designed for memory intensive workloads and is “designed from the chip level up for better reliability and performance than the types of flash used in low end markets,” according to executive vice president of Texas Memory, Woody Hutsell.

Up until the last year, Texas Memory only produced RAM based SSD because flash based SSD was too expensive to be viable on the market, Hutsell said. “But cost of the media has gone down, and the density has gone up, driven by the consumer electronics industry, so flash has become more competitive with SSD storage arrays.”

Some companies have already begun replacing their hard disks with SSDs to improve the speed of their servers, according to Jim Handy of Objective Analysis, but this is a pretty narrow slice of the market. Uptake is expected to grow; the IDC predicts SSD uptake in enterprise computing will pick up by 2010 and enterprise computing applications will grow from 12% of SSD revenue in 2007 to more than 50% by 2011, but others, including storage administrators, think mainstream adoption of SSD in enterprise data centers will take much longer.

In general though, flash SSDs are a good alternative to hard disk arrays in data centers that use 10,000-100,000 hard disks today, Handy said. “In such a system you might find 1-2% of the hard disks being replaced by SSDs in a ratio of one SSD for every ten hard disks or so.”

Still, if SSDs can bring better performance, lower power consumption, and a smaller footprint for a competitive price today, we will no doubt see more and more server vendors adding SSD options to their x86 boxes.

AMD ships more efficient, faster versions of 45nm Opteron CPU

Advanced Micro Devices (AMD) is now shipping seven new versions of its latest Opteron processor, the 45 nanometer quad-core chip, code-named Shanghai; five are high efficiency (HE) and two are designed for higher performance than the standard version of Shanghai.

The new versions of Shanghai are essentially identical to the original flavor, only the HE is more power efficient and the SE offers better performance than the standard versions.

The 45nm Quad-Core AMD Opteron HE processor is 55-watts, compared to the standard 75-watts, and speeds range from 2.1 to 2.3 GHz. A server with an HE version can save 20% more than similarly configured systems during idle times, AMD reported.

The new HE processors are available in eight server systems from HP, Rackable Systems, Dell, Sun Microsystems, and other vendors are expected to start shipping the CPUs by mid-year.

Additionally, two new 45nm Quad-Core AMD Opteron SE processors (2.8 GHz) are designed for performance-intensive workloads; this compares to the standard Shanghai chip speed of 2.7 GHz. The SE chips aren’t conservative on power though; they come in a 105-watt ACP thermal envelope and are aimed at data centers where performance trumps power efficiency, said John Fruehe, AMD’s director of business development for server and workstations.

“Depending on the application, the SE version offers up to 5% better performance [than the standard version], but it also uses more power,” Fruehe said. “The customers that use these chips are less interested in the power efficiency and more interested in the performance, so we don’t do power testing on these.”

The new SE processors are also immediately available in three new systems from HP and other AMD technology partners.

The AMD Opteron pricing model for HE versions range from $316 to  $1,514, and the two SE models are $1,165 and $2,649.

Server sales suffer on economy, virtualization; vendors branching out

With the U.S. economy in a recession, world economies suffering and virtualization adoption on the rise, it comes as no surprise that factory revenue in the x86 worldwide server market declined 5.2% year over year to $12.6 billion in the third quarter of 2008 (3Q08), according to the IDC’s Worldwide Quarterly Server Tracker released December 3.

In fact, this is the largest quarterly revenue decline for servers since the fourth quarter of 2002, and the sluggish server unit shipment growth of 2.8% year over year in 3Q08 represented the slowest increase in server shipments since 4Q06, the IDC reported.

“The x86 server segment was definitely impacted by the economic downturn; there was significant deceleration in the quarter with a particular weakness in September,” said Jed Scaramella, IDC Senior Research Analyst, Servers. “Due to the uncertainty in the market, customers cut back on all nonessential spending.”

Volume systems revenue declined 7.2% year over year in the third quarter, the first decline for this market segment in more than 14 quarters, and revenue for mid-range enterprise servers declined 9.5% year over year. Shipment growth also slowed significantly for x86 servers to 4.0% (1.97 million units) because of a low demand, and revenue declined 6.6% year over year in 3Q08, representing the largest year-over-year decline for the segment in more than 24 quarters, IDC reported.

The IDC didn’t mention this in their release today, but it is obvious that virtualization is partly to blame the slowing demand for commodity x86 servers because it increases server utilization.  According to Tom Bittman, VP and distinguished analyst with Gartner, virtualization has penetrated 12% of the market, and the number of VMs deployed doubles every year. “By 2012, we expect more than half x86 workloads will be run on VMs,” Bittman said in an interview about his presentation on the virtualization market for Gartner’s 27th annual Data Center Conference this week.

“Virtualization and cloud computing have screwed up the market; vendors used to compete in compute islands, they were all direct competitors, but now they fight for control of an entire virtual layer. IBM and HP are competing in broad server technologies, instead of HP and IBM competing only in the area of server hardware,” Bittman said. “All vendors worry about becoming commodities and they all want to be considered the brains of the industry”

Perhaps that concern, along with slow server sales, is why vendors including HP, Dell and Sun have branched out into the area of data center services this year that could add a revenue stream beyond selling hardware. HP acquired EYP Mission Critical Facilities about a year ago and began offering data center services in March. Just this week, Dell announced it would offer services to help people extend the life of their data centers. Before that, Sun announced data center services that include data wiping.

But, there were exceptions to the grim server market numbers; revenue for high-end enterprise servers grew 4.0% year over year, the third consecutive quarter of growth for the segment. Other exceptions to the slowdown were blade servers (11% of the market) and IBM System z (9.4% of the market), which both increased this quarter, IDC reported.

Scaramella said IBM System Z sales didn’t suffer because they tend to be cyclical and are built into companies long-term budgets, which is not always the case for the smaller x86 systems. “Customer are more likely to push out [x86] purchases and see what they can do without,” he said.

And blades were the only platform to experience positive growth in the quarter, with all major vendors exhibiting double-digit growth in blade volumes, IDC reported.

I’m no analyst, but I am guessing the demand for blades didn’t slow down along with other x86 servers because today’s blades are pitched as ideal virtualization platforms. The HP ProLiant BL495c virtualization blade, for instance, is one of many new blades designed with more memory, data storage and network connections to meet the needs of memory and I/O-hungry VMs.

In addition to their appeal as a virtualization platform, blade servers are desirable because they take up very little space in cramped data centers and many blade surpass rack servers in power and efficiency.

So, it will be interesting to see whether server sales recover when the world economies improve, or if they remain depressed due to the increasing use of virtualization.

The IDC is predicting this slowdown to continue throughout most of 2009, but server sales will rebound with the economy, Scaramella said. “We are not anticipating a quick rebound [but] I do not think we will see the same extreme fall-off the market experienced after the dot.com bust,” he said. “At that time there was a tremendous amount of excess capacity built out in the infrastructure. Over the past few years, many companies have been in a consolidation mode - reducing the numbers of servers they have in operations as well as reducing the number of data centers they have in operations. Back in 2001-2002, companies were able to put off purchase due to the excess capacity, this is not the case today.”

HP’s energy efficiency crusade to control server, data center power

A few Hewlett Packard (HP) executives visited with me yesterday to discuss their Green data center mission - and surprisingly, they admit that it doesn’t always mean using HP hardware.

They started off our meeting with a discussion about new and existing server power control tools, which I’m not convinced many IT admins actually take advantage of.

HP’s new Dynamic Power Capping tool within Insight Power Manager lets IT set power caps on HP servers based on peak load trends to prevent over-provisioning of power. The cap can be set on single servers or on an entire chassis of blade servers, and can also be based on user-defined policies, according to HP’s VP of Enterprise Server and Storage Infrastructure Software Mark Linesch.

HP’s ProLiant servers shipped within the past few years already have the hardware for this feature baked into them, so ProLiant users need only do a firmware upgrade to add the Dynamic Power Capping feature, Linesch said.

“HP has invested a huge amount of money in green technology not just for the sake of being green. It has very practical implications that save companies significant amounts of money,” Linesch said.

Other companies offer power capping features on their servers as well, including IBM. IT can set a power cap for IBM servers and IBM BladeCenter systems via Active Energy Manager firmware, when the firmware supports capping.

These tools sound great, but I question whether or not power capping features are actually being used in data centers. I’d like to hear from users about this; power control features have existed on servers for many years, but does anyone use them? Is a tool like HP’s Dynamic Power Capping a viable option for virtualized servers?

HP’s execs also told me about their vendor-neutral data center efficiency consultancy services. Since HP’s acquisition of EYP Mission Critical Facilities Inc. a year ago this month, HP  has offered vendor agnostic consulting services to data centers to help them (for a fee) measure energy efficiency, without any pressure to use HP equipment, said Bill Kosik, energy and sustainability director of HP’s EYP Mission Critical Facilities group.

“That was actually part of the deal when we were acquired; we wanted to stay vendor neutral and we have been able to do that,” Kosik said.

So far, HP’s EYP group has performed consultancy work (including thermal mapping and energy analysis) for about 30 data centers that are either on the brink of a major power consumption dilemna or in a transition phase and need help planning, designing and developing their data center, Kosik said.

On November 3, HP announced new EYP services packaged in a tidy bundle, as vendors love to do, called HP Energy Efficiency Design and Analysis Services, which includes energy efficiency analysis and design services that help data centers meet compliance regulations like those from the Leadership in Energy and Environmental Design (LEED).

And of course, HP isn’t the only company offering  data center efficiency software and services to data centers these days. The list is long, which is great for consumers.

Rackable Systems updates its most popular half depth server

Rackable Systems, Inc. today announced the new C2005 server, designed with more expansion slots and a choice of SAS or SATA II hard drives for greater flexibility and configurability.

The C2005 is an updated version of Rackable’s top selling half depth 2U server product, the C2004, which offers density comparable to industry standard 1U servers.

“The C2005 introduces an unparalleled level of flexibility compared to anything we have ever offered,” said Geoff Noer, VP of Product Management.

The new C2005 includes both Intel and AMD quad-core processor options and offers up to five low-profile expansion slots and a sixth slot available in all configurations (often a x16 PCI-E slot), Noer said.

“A lot of new technologies, like virtualization, benefit from having additional expansion slots for connectivity. In a 1 U server you typically only see one or two expansion slots,” Noer said.

The C2005 also includes up to 10 x 2.5” or 5 x 3.5” SAS or SATA II hard drives – or a mix or both. “An emerging challenge is to address the need to support both 3.5 and 2.5 inch, and providing both in a single platform” adds appeal, Noer said.

“Configurations that would have had to been in a 3U server or larger, for the number of expansion slots, can now be done with a 2U half depth. The density level is much higher and suited for technologies like virtualization,” Noer said.

Noer said the C2005 is well suited for scale-out computing across many markets, especially Internet, Enterprise, and HPC customers.

Up to 44 C2005 servers fit into a single rack. The server is also available in AC or DC power, and Noer said both options are in high demand. “The advantage of DC is largely around increased reliability of the solution. We can also supply AC to the cabinet and DC power to all of the servers inside the cabinet,” through Rackable’s AC-to-DC X86 rack-level rectification technology, which the company has offered since 2003.

The server is available for order immediately. Rackable did not give pricing because the systems are built to order, and pricing depends on configurations Noer said.

IBM opens four new cloud-computing centers

IBM has opened four new cloud-computing centers in Sao Paulo, Brazil; Bangalore, India; Seoul, Korea; and Hanoi, Vietnam, where there is increasing demand for Internet-based computing models.

IBM now has 13 cloud-computing centers and has dedicated more than 200 full-time researchers and $100 million to cloud computing ventures.

The benefit of cloud computing is that it gives users remote access to computing resources such as servers, storage, services and applications on demand without additional investment in new hardware.

For nearly a year, IBM has built cloud-computing infrastructures and established cloud projects in IBM cloud-computing environments.

According to IBM, in Korea, the new center will provide architecture skills and pilot projects for industries such as banking, telecommunications, government, education and IT hosting services. In India, clients such as midmarket providers, universities, telecommunications companies and government bodies will be able to access the center’s resources for pilot cloud infrastructures and applications and deliver new services to their customers.

Among the first customers to use the new centers is the Association for Promotion of Brazilian Software Excellence (Softex), which will conduct Concerto de
an on-line event to collect ideas for the 2009-2010 strategic plan for Brazil’s software industry. Earlier this year, IBM established Europe’s first cloud-computing center in Dublin, Ireland, a center in Beijing, China; one in Johannesburg, South Africa; one in Tokyo, Japan and one in Raleigh, N.C. Over the past year, IBM has provided cloud-computing services to clients such as Wuxi City in China; Sogeti, the Local Professional Services Division of Capgemini; the Vietnamese government institutions and universities; iTricity, a utility-based hosting service provider headquartered in the Netherlands; and the University of Pretoria in South Africa.

Several other companies have invested in the advancement of cloud computing, including Amazon (EC2), Hewlett-Packard, Intel, Yahoo, and VMware.

Unisys updates server with six-core Intel Xeon, enhances services

Blue Bell, Pa.-based Unisys Corp. announced its new ES7000 Model 7600R Enterprise Server using Intel Xeon six-core processors (Dunnington), which Intel also announced today; along with new business assurance services and software in the Unisys Infrastructure Management Suite.

Unisys’ new ES7000 Model 7600R Enterprise Server is based on the new six-core Intel Xeon processor 7400 series. It has 16 sockets providing up to 96 processor cores. According to Unisys, the 7600R is designed for database and online transaction processing environments, large-scale consolidation and virtualization initiatives and business intelligence deployments with Microsoft SQL Server.

Model 7600R can support consolidation of 64 SQL Server databases into a single four-socket, six-core Xeon processor configuration – with 24 total processor cores – which Unisys claims is better than a commodity server farm of 64 dual-socket, single-core Xeon processor servers with 128 total processor cores, while using less disk and providing better response times.

The new server also supports VMware ESX Server and Microsoft Hyper-V, and supports dynamic partitioning so users can add more processor, memory and I/O resources on the fly without disrupting system operations. Unisys plans to introduce secure partitioning in the first half of 2009, which provides partitioning capabilities at the processor core level.

Prices for the ES7000 Model 7600R range from $26,430 to $135,000. Unisys will exhibit the ES7000 Model 7600R at VMworld 2008 in Las Vegas, Sept. 15-18.

Unisys business services
Unisys also announced new Business Assurance Services that help companies evaluate the cost and benefits of disaster recovery products, reduce the time it takes to deploy the best ones and reduce operational costs by improving resource utilization.

“We are vendor-agnostic and will implement whichever technology is best for the client. It could be a Unisys product, or it could be from another vendor,” said Jody Little, vice president of solutions and services at Unisys.

The Unisys Business Assurance Services, using discovery processes and tools developed with support from Unisys partner GlassHouse Technologies, include the following:

• Unisys Disaster Recovery Architecture Service, which provides a methodology to build application and data disaster recovery capabilities.
• Unisys Backup Modernization Service, which helps clients select new technologies and services to support backup environments at both core and remote sites.
• Unisys Data Protection for Backup Service, which helps clients improve backup and restore operations for business information, reducing costs by improving utilization of assets. Unisys experts also make vendor-independent recommendations and create a prioritized action plan

Unisys has also added new management software components to its Infrastructure Management Suite, which automates and orchestrates management of a real-time IT infrastructure. More information can be found on the Unisys website.

IDC Server Tracker shows slowing x86 server growth

Framingham, Mass.-based IDC released its Worldwide Quarterly Server Tracker for the second quarter of 2008 (2Q08) today showing that although the overall server market grew in the second quarter of 2008 (2Q08), x86-based systems experienced their slowest growth rate in 23 quarters.

As a whole, the worldwide server market grew 6.4% year over year to $13.9 billion in 2Q08, marking the ninth consecutive quarter of positive revenue growth and the highest Q2 server revenue since 2000.

Unit server shipments grew 11.1% year over year in 2Q08 driven by a hardware refresh cycle and infrastructure expansions, according to IDC.

Although volume systems revenue grew 2.1% in 2Q08, they underperformed the market for the first time since 4Q06, as server OEM’s experienced strong pricing pressure in the marketplace.

Matt Eastwood, group vice president of Enterprise Platforms at IDC, said in a statement, “IDC saw strong growth in blades, Unix systems, and IBM System z demand across the marketplace. Diversity in market demand demonstrates customers do not believe a single standardized infrastructure is capable of meeting all their computing needs.”

x86 Server Market Dynamics

x86-based systems experienced their slowest growth rate in 23 quarters. x86 server market growth slowed in 2Q08 to a rate of 3% year over year ($7 billion worldwide). The 2Q08 was also the first quarter that spending for non-x86 systems outpaced revenue growth for x86-based systems since 4Q00.

Could it be that server physical sprawl is slowing? Now that virtualization is mainstream, have people slowed down on their server hardware acquisitions?

IDC blames the x86 server market slowdown not on virtualization, but on the pricing climate, saying average selling values declined 8.4% year over year in 2Q08.

“The pricing challenges many OEMs experienced, particularly in the x86 server market, is a concern as it may foreshadow a slowdown in market demand as enterprise budgets face further scrutiny in the second half of 2008,” Eastwood stated.

“While all the major vendors exhibited strong unit growth, there was significant price competition throughout the quarter,” stated Jed Scaramella, senior research analyst for Datacenter Trends at IDC. “Low-end volume servers, such as 1- and 2-socket systems, are somewhat viewed as commodities and experienced the most pricing pressure. Additionally, the quarter was made noteworthy by the fact that several of the tier-one vendors began shipping their new systems targeting large-scale datacenters. Typically, these are stripped down servers that are designed to operate at maximum power efficiency. All components and features that are not essential, including server redundancy, are eliminated to reduce the capital expenditure of these datacenter customers.”

Nashua, N.H.-based Illuminata analyst Gordon Haff said speculation about virtualization causing server sales to decline have always swirled, but never seem to manifest.

“I’ve been hearing the “won’t people buy fewer servers?” question every time there were faster processors, more processor cores, etc. for as long as I’ve been an analyst. And the market just keeps on growing,” Haff said.

“What you are seeing here though–and which relates to virtualization to at least some degree–is the relative popularity of larger servers,” Haff said. “Virtualization really helps people more effectively utilize larger servers even when single apps don’t need all the
horsepower. Even within the x86 server space we’ve seen more interest in 4-socket servers after that category was in decline for years.”

Blade Server Market Shows Strong Shipment and Revenue Growth

Although blade revenue decelerated slightly in 2Q08, year-over-year revenue growth of 40.8% in 2Q08 was the third fastest over the past 2 years, IDC reported.

Overall, bladed servers, including x86, EPIC, and RISC blades, accounted for $1.2 billion in the second quarter, or 8.8% of quarterly server market revenue.

HP held the number 1 spot in the blade market with 53.3% market share and IBM held the number 2 position with 24.8% share. Dell and Sun also experienced blade revenue growth in 2Q08.

VMmark a server vendor leapfrog game

This week I wrote a follow up story on VMware Inc.’s virtualization performance benchmarking tool, VMmark, and found it is mainly used by vendors as a way to market their servers.

Server vendors run the VMmark test under a set of guidelines and submit results to VMware for posting. It is my suspicion that vendors play leapfrog with VMmark by looking at exsiting VMmark results and only submitting their performance results when theirs are as good or better.

For instance, IBM submitted a benchmark for its 16-core System x3850 M2
running VMware ESX v3.5, which trumped the other published as of March 2008. IBM then published a press release to brag about the results, but within a few months, Dell submitted results three PowerEdge systems sporting better virtual machine (VM) performance than IBM, and Hewlett Packard (HP) beat them all out with its ProLiant DL585 G5 server results published August 5.

HP also sent out an email to press this week boasting their top 32-core results, but didn’t mention one minor detail; they are the only vendor with results in the 32-core category so far. Sure, they are number one. They are the only one.

System Administrator Bob Plankers sums this game up nicely in his blog with a post called “Why VMmark Sucks.”  Here is what Plankers had to say:

“Having a standard benchmark to measure virtual machine performance is useful. Customers will swoon over hardware vendors’ published results. Virtualization companies will complain that the benchmark is unfair. Then they’ll all get silent, start rigging the tests, scrape and cheat and skew the numbers so that their machines look the greatest, their hypervisor is the fastest. Along the way it’ll stop being about sheer performance and become performance per dollar. Then CapEx vs. OpEx. Watt per tile. Heat per VM. Who knows, except everybody will be the best at something, according to their own marketing department.”

In addition, the benchmark is a real pain to set up and run, and the ‘free’ VMmark software requires other expensive software to work. According to VMware’s website,
VMmark requires  licenses for the following software packages;

• Microsoft Windows Server 2003 Release 2 Enterprise Edition (32-bit)—thre 32-bit copies per tile (two for virtual machines and one for that tile’s client system), and one 64-bit copy per tile (for the Java server virtual machine)
• Microsoft Exchange Server 2003 Enterprise Edition
• SPECjbb2005 Benchmark
• SPECweb2005 Benchmark

Plankers said he won’t be wasting any time or money running VMmark. “Instead, I’ll be in meetings explaining to folks why we are maxed out at 30 VMs per server when the vendor says they’ll run 50. Or why we chose VMware over Xen, when Xen claims 100 on the same hardware. I’ll have to remember the line from the FAQ that says “that VMmark is neither a capacity planning tool nor a sizing tool.”

Which begs the question: if it isn’t for use in sizing or capacity planning, exactly what is it good for?”

VMware says the benchmark is good for users who are making hardware purchasing decisions.

“The intention [of VMmark] is that customers can look at the results and make decisions based on what they see. It isn’t just about the fastest server; it’s about making system comparisons; between blades and rackmounts or a two-core or four-core system. Someone can see how much more performance they get from upgrading to four core processors, for instance,” said Jennifer Anderson, the senior director of research and development at VMware.

This makes sense, but as Plankers said, users should beware of benchmark manipulation by vendors and know that the results do not reflect the same workloads that users will run in their own data center environments.