The Cloud Generation - IT Brand Pulse presentation at Zadara Summit 2015
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From electricity to storage - utility models throughout history and the new cloud generation. Frank Berry is founder, CEO and senior analyst at IT Brand Pulse, a trusted source of testing, research and analysis covering data center infrastructure.
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The Cloud Generation - IT Brand Pulse presentation at Zadara Summit 2015
- 1. The Cloud Generation Frank Berry Founder & Analyst 1
- 2. wwww.itbrandpulse.com 2 Cloud Counter Culture
- 3. wwww.itbrandpulse.com 3 Proposing a Cloud Project
- 4. wwww.itbrandpulse.com 4 "I wanna hear the Glenn Miller Orchestra and I wanna see cops beating up cloud providers!“ – Joe Tucci
- 7. wwww.itbrandpulse.com 7 The Journey Ahead
- 8. wwww.itbrandpulse.com 8 The Evolution of Utility Grids
- 10. wwww.itbrandpulse.com Brush Arc generator Arc lighting station Nearby arc lights Before Grid
- 11. wwww.itbrandpulse.com Tesla AC generator Niagara Falls power station Fluorescent lights & street cars in Buffalo Private Grid Before Jeff Bezos
- 12. wwww.itbrandpulse.com Itaipu power plant Powering 25% of Brazil and 75% of Paraguay Turbines Utility Grid
- 13. wwww.itbrandpulse.com National Electrical Grid 120VAC available anywhere in the U.S.…
- 14. wwww.itbrandpulse.com Market for Grid Infrastructure Power plants, dams, power lines…
- 15. wwww.itbrandpulse.com Electricity as a Service Usage is metered. Customers pay for what they use.
- 16. wwww.itbrandpulse.com Market for Private Infrastructure Customer-specific infrastructure owned or leased
- 17. wwww.itbrandpulse.com 1920 “Electrify Your Home” Campaign Your House is Not Electrically Modern Without the Following: Electric name and house number plate Porch lights Doorbell Automatic door-opener and latch Burglar alarm Electric oven Electric dishwasher Electric water heater Electric waffle iron Electric shaving mug Electric curling iron Electric hair dryer Electric massager Electric bed warmer Electric toaster Electric percolator Sewing machine Vacuum cleaner Washing machine
- 18. wwww.itbrandpulse.com 1921 Article About New Technology “…the owner reads all the meters and sells that current back to the tenants. If the owner chooses not to handle this responsibility, he or she can hire a meter company to come in and read meters, bill tenants, adjust disputes, and maintain the house meter equipment — all for a fixed rate…” The authors find this arrangement “very satisfactory because it frees up the owner from the drudgery of bookkeeping and electrical maintenance, and metering company specialists soon become experts in this work.”
- 19. wwww.itbrandpulse.com Scalability Before Grid (DC generators) Corporate Grid (AC generators) Utility Grid (Electrical Grid) 70,000 Bulbs 1881 37M Access in U.S. 1930 320M Access in U.S. 2015
- 20. wwww.itbrandpulse.com Crank telephone Shared telephone lines Manual switching Before Grid
- 21. wwww.itbrandpulse.com Dedicated telephone lines Rotary telephone Manual directory assistance Private Grid
- 22. wwww.itbrandpulse.com Mobile telephone Wireless networks Automated telephony for everyone, anywhere in global telephone grid Utility Grid
- 23. wwww.itbrandpulse.com National Telephone Grid 300 geographically dispersed Area Codes…
- 24. wwww.itbrandpulse.com National Wireless Cell Grids 46.5% of adults are cell-only…
- 25. wwww.itbrandpulse.com Market for Wired & Wireless Grid Infrastructure Switching, Base Stations, Cell Towers…
- 26. wwww.itbrandpulse.com Telephone as a Service Services and fees tailored to each customer…
- 27. wwww.itbrandpulse.com Market for Private Infrastructure IP-based Wired & Wireless Systems…
- 28. wwww.itbrandpulse.com Scalability Before Grid Corporate Grid 800K Telephones in service in 1900 30M Telephones in service in 1948 Utility Grid 204M Smartphones in US in 2015
- 29. wwww.itbrandpulse.com 29 Cloud Computing: The 5th Utility
- 32. wwww.itbrandpulse.com Open Source Cloud Automation Strategy Benefit Make deployments automated Without automation impossible Expose well designed APIs to users Offloads presentation complexity to clients Remove state for mid tier services Allows easy elastic scale out Push temporal state to client and caching tier Leverage clients, avoids data tier overload Use partitioned data storage Data design and storage scales with HA Utility Grid
- 33. wwww.itbrandpulse.com Global Cloud Grid Dispersed for availability and performance
- 34. wwww.itbrandpulse.com Market for Cloud Grid Infrastructure Open source SW, white box HW & open interfaces
- 35. wwww.itbrandpulse.com Servers, storage, networking, apps, management… Everything-as-a-Service
- 36. wwww.itbrandpulse.com Market for Private Infrastructure Commercial Versions of Open Source SW and White Box HW Traditional Switch White Box Switch Brite Box Switch Cisco OS Cisco ASIC Cumulus OS Broadcom ASIC Cumulus OS Broadcom ASIC $300-$400 per port $50-$125 per port $150-$300 per port
- 37. wwww.itbrandpulse.com Scalability At the 2014 AWS re:Invent, Amazon VP James Hamilton said AWS deploys in one day the infrastructure needed to support Amazon’s ecommerce business when it was at $7B of revenue per year. And they did it 365 times last year.
- 38. wwww.itbrandpulse.com 38 Why it took so long
- 39. wwww.itbrandpulse.com The Cloud Services Void Slow Rate of Change Proprietary Technology Expensive Hardware, Software & Service
- 40. wwww.itbrandpulse.com Think Differently, Act Differently 40 Core Business IT 100% 0% Spending No motivation for disruption because the impact of IT savings on overall P&L is small. And when IT has a big impact on core business continuity, organizations take the safest, lowest risk approach. Industry IT Spending as a % of Revenue Software Publishing & Internet Services 6.7% Banking & Financial Services 6.3% Media & Entertainment 5.0% Education 4.7% Professional Services 4.2% Healthcare Providers 4.2% Telecommunications 3.8% Insurance 3.2% Pharmaceuticals, Life Sciences & Medical Products 3.2% Utilities 2.8% Transportation 2.6% Industrial Electronics and Electrical Equipment 2.5% Consumer Products 1.9% Industrial Manufacturing 1.7% Retail & Wholesale 1.5% Chemicals 1.3% Food & Beverage Processing 1.3% Energy 1.1% Construction, Materials and Natural Resources 1.0%
- 42. wwww.itbrandpulse.com 1Gbs 10Gbs 100Gbs 1Tbs 10Tbs 100Tbs 100Mbs 10Mbs “I Felt a Great Disturbance in the Force” 1Pbs 25Gbs 50Gbs Ethernet Speed Trajectory
- 43. wwww.itbrandpulse.com Disruptive Innovation Driven by Hyperscales 43 Performance that customers can utilize or absorb Disruptive Innovations Sustaining Innovations 10G 40G 25G 50G 100G
- 44. wwww.itbrandpulse.com Putting the hyper in hyperscale required new technologies, products and practices 44 Million Server Club Servers >2M >1M >1M Source: IT Brand Pulse Source: WSJ
- 45. wwww.itbrandpulse.com Disruptive innovation was not an option for hyperscale profitability 45 Amazon operating income in Q1’14 was $146M. A 40% savings in IaaS spending due to use of open-source technology = $400M or $1.6B/yr. Facebook revenue was $10.8B and net income was $1.07B in 3 years 2010-2012. During that period they reported savings of $1.2B by doing their own designs “Thanks to OCP and related efficiency work, we announced that we’ve saved $2 billion in infrastructure costs over the course of the last three years.” - Facebook, March, 2015 Other IT (Core Business) 100% 0% Spending
- 46. wwww.itbrandpulse.com 46 Enterprise IT Hyperscale for the masses
- 47. wwww.itbrandpulse.com Open Interfaces Unchained the Software Defined Universe 47 Nova Neutron Cinder Swift RESTful Horizon AWS
- 48. wwww.itbrandpulse.com Free to Implement Software Defined Data Centers 48 Predominant Architecture in 10 Years Software Defined Data Center Server Hypervisors Storage & Networking Apps Servers Predominant Architecture Today Servers Networking Storage Any Hypervisor Any Server Vendor-Specific SW Vendor-Specific HW Vendor-Specific SW Vendor-Specific HW
- 49. wwww.itbrandpulse.com Free to Innovate with Software-based Services 49 Cloud Provider Develop, Deploy, PublishService-Centric Innovation Cycle Year 1 Year 2 Year 3 Year 4 Year 5 Standards Organizations Equipment Vendors Storage Demand Drive Develop Implement Sell Deploy Hardware- Centric Innovation Cycle Services over bare metal networks speed deployment of new technology.
- 50. wwww.itbrandpulse.com Storage and Networking Become Apps App Server Clusters Emai l DB VD I Software Defined Storage Clusters NFV App Clusters Cloud Operating System Clusters 50
- 51. wwww.itbrandpulse.com Software Defined Servers in 10 Years (Actual) 51 0% 20% 40% 60% 80% 100% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 New Workloads Virtualized New Workloads Not Virtualized Source: Gartner
- 52. wwww.itbrandpulse.com Software Defined Networking in 10 Years (Forecast) 52 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Enterprise SDN Traditional Enterprise Networking Hyperscale SDS Private Cloud Public Cloud Source: Wikibon & IT Brand Pulse SDN Orchestration NFV Apps Open Networking Switches Commercial versions of open source based SDN Orchestration and NFV Apps, Open Networking Switches
- 53. wwww.itbrandpulse.com Software Define Storage in 10 Years (Forecast) 53 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Enterprise SDS Traditional Enterprise Storage Hyperscale SDS SDS Apps Storage-as-a-Service White Box Servers Private Cloud Public Cloud Source: Wikibon and IT Brand Pulse Commercial versions of Enterprise SDS
- 54. wwww.itbrandpulse.com Enterprise Infrastructure Leader Trajectory 54 2010 2011 2012 2013 2014 Cisco 40.0 43.2 46.1 48.6 47.1 Dell 52.9 61.5 62.1 56.9 EMC 17.0 20.0 21.7 23.2 24.4 HP 126.0 127.2 120.4 112.3 111.5 IBM 99.9 106.9 104.5 99.8 92.8 0 20 40 60 80 100 120 140 Billions Private Traditional Enterprise IT Leader Revenue Trend
- 55. wwww.itbrandpulse.com Cost of 250TB Growing at 25% per year 55 Year 1 Year 2 Year 3 Year 4 Year 5 EMC VNXe 3200 $192,922 $213,468 $242,108 $308,338 $380,010 NetApp E2700 $60,206 $87,838 $144,718 $196,890 $261,622 NEC M110 $83,017 $103,285 $130,975 $178,055 $225,203 Dot Hill Ultra56 $55,979 $64,493 $87,555 $104,713 $123,774 SUSE Enterprise Storage $70,100 $76,579 $84,825 $96,238 $108,607 $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 Source: IT Brand Pulse
- 56. wwww.itbrandpulse.com 10 more years of steep cloud price reductions 56 15 years 2011-2026
- 57. wwww.itbrandpulse.com 57 Traditional Enterprise IT Market
- 58. wwww.itbrandpulse.com 58 Traditional Enterprise IT Market IT as a Service Market
- 59. wwww.itbrandpulse.com Green Field Blue Sky Market for IaaS 59 Telecom Services IaaSIT Services Other Enterprise Software Data Center Systems 2015 Global IT Spending ($3.8 Trillion) $16.6B $143B
- 60. wwww.itbrandpulse.com Vendor Switch Past: Enterprise HW Defined Ecosystem Switch OS Appliances Router Firewall Load Balancer Etc. Vendor NOS Orchestration Monitoring Vendor Storage Software Failover DeDup Compression Etc. Hypervisor Vendor or Merchant Switch ASIC Vendor Storage System Vendor Server Cisco & Dwarves EMC & Dwarves HP, IBM, Dell, Lenovo Merchant Server OS Merchant Server Processor Block, File, Object Merchant Server Processor
- 61. wwww.itbrandpulse.com White Box Server Cloud Platform Future: Enterprise SW Defined Ecosystem NFV Router Firewall Load Balancer Etc. SDN Orchestration Controller Switches Monitoring Software Defined Storage Block File Object Failover, Dedup, Compression Hypervisor Merchant Server OS Bare Metal Server Merchant Server Processor White Box Switch Merchant Switch OS Bare Metal Switch Merchant Programmable Switch ASIC
- 62. wwww.itbrandpulse.com You are leading IT organizations across the Chasm 62
- 63. wwww.itbrandpulse.com 63 The Cloud Generation
Editor's Notes
- Dustin Moskovitz is an Internet entrepreneur worth $3.8 billion known for his role in the establishment of the social media giant called Facebook. Along with Mark Zuckerberg, Eduardo Saverin, Andrew McCollum and Chris Hughes, the group created the most popular networking site in the world today. In 2008, Moskovitz left Facebook and founded with Justin Rosenstein the task management software called Asana. He is considered as one of the youngest self-made billionaires in the world, with a 7.7 percent share in Facebook. Yet, he drives a Volkswagen R32 hatchback that costs just a little above $30,000.
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- Let’s start with data center technology before hyperscales were born. I know I didn’t think of it this way before, but in comparison to hyperscale IT: Data center technology changed slowly. The storage, server, networking and software platforms incorporated a lot of proprietary features. And that made the hardware, software and service comparatively expensive.
- The reason why Ethernet, and enterprise IT, has been so predictable, is there has not been a business case to disrupt the rate of change. Even at the high end of spending by industry, IT spending as a percent of the total is less than 7%. That means a 10% cost saving on 7% amounts to .7%, not enough to drive dramatic change. These facts simply reinforced a low-risk approach to IT which was designed to protect the core business.
- Then the big bang. When hyperscale companies started designing their own systems and sharing the software and hardware designs, innovation exploded. Again, we only have to follow the money to understand why innovation exploded. It was urgently needed for the companies to grow profitably.
- Obi-Wan: I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened.
- To put their requirements into perspective let’s look at the scope of their server connectivity. While the challenge of really large enterprises is to deploy and manage tens of thousands of servers, the largest hyperscales are managing millions of servers.
- Disruptive innovation is also required for companies like Amazon and Facebook to achieve profitable growth. That’s because unlike other industries, most of their spend is on IT, and cost savings can mean the difference between profit and loss. That was case for Amazon in Q1 of 2014, and true for Facebook from 2010 through 2012.
- The disruption that made hyperscale and profitable growth possible started at the top with a software defined data center architecture. The predominant architecture in the enterprise is software defined servers…a.k.a. server virtualization…and silos of vendor specific networking and storage. In hyperscale data centers, server virtualization is joined with storage and network virtualization which are apps running on industry standard servers.
- The disruption that made hyperscale and profitable growth possible started at the top with a software defined data center architecture. The predominant architecture in the enterprise is software defined servers…a.k.a. server virtualization…and silos of vendor specific networking and storage. In hyperscale data centers, server virtualization is joined with storage and network virtualization which are apps running on industry standard servers.
- One result of implementing a software defined data center architecture is that server connectivity is more important than ever. Among the millions of servers in hyperscale data centers are app servers, software defined storage servers, NFV app servers and cloud OS servers. All are connected by an Ethernet network that must be incredibly fast, smart and cost-effective.
- Wondering when this is all going to happen? Well, we expect the migration to software defined data centers and the underlying technologies to take ten years. Our benchmark is the migration to software defined servers, an area where after ten years, 70% of new workloads are now virtualized.
- http://www.gartner.com/newsroom/id/3055225 Gartner Says Worldwide Cloud Infrastructure-as-a-Service Spending to Grow 32.8 Percent in 2015 Buyers Urged to Be Cautious When Choosing Providers as Competitive Landscape Shifts The market for cloud infrastructure as a service (IaaS) is in a state of upheaval, as many service providers are shifting their strategies after failing to gain enough market traction, according to Gartner, Inc. Global spending on IaaS is expected to reach almost US$16.5 billion in 2015, an increase of 32.8 percent from 2014, with a compound annual growth rate (CAGR) from 2014 to 2019 forecast at 29.1 percent, according to Gartner's latest forecast. http://www.enterprisetech.com/2015/01/13/spending-shifting-hyperscale-datacenters/ Gartner predicted this week that worldwide IT spending would grow to $3.8 trillion this year, a 2.5 percent increase over 2014. An earlier projection pegged the annual IT growth rate for this year at 3.9 percent. That forecast was revised downward as the dollar rises against the euro and other currencies. (The market watcher said plummeting oil prices would likely have had little impact on its quarterly projections.) “The rising U.S. dollar is chiefly responsible for the change—in constant currency terms the downward revision is only 0.1 per cent,” explained John-David Lovelock, Gartner’s research vice president explained. “Stripping out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.7 percent, which compares with 3.8 percent in the previous quarter’s forecast.” While currency fluctuations resulted in a 1.4 percent downward revision in Gartner’s quarterly IT spending forecast, the market analyst noted that enterprise software continues to grow at a 5.5 percent clip. A key shift is away from software licensing to software-as-a-service, an option that brings with it monthly rather than annual payments. Lovelock noted that the “SaaS first” model provides greater agility as the Internet of Things emerges. Gartner forecasts that SaaS will account for more than half of annual software deals this year. Telecom services represent the lion’s share of annual IT spending, totaling more than $1.62 trillion last year. That total is expected to increase by only 0.7 percent in 2015, Gartner forecast. IT services represent the second-largest spending category, reaching $956 billion in 2014. Gartner is forecasting that global spending on IT services will increase 2.5 percent this year to $981 billion even as datacenter infrastructure spending remains essentially flat. The market analyst cited lower growth rates in some regions for enterprise software while economic uncertainty in the Russian and Brazilian markets squeezes short-term growth rates. The Asia-Pacific region is the fastest growing market at 8 percent annual growth. Overall, enterprise software spending shows the biggest annual increase, with Gartner predicting a 5.5 percent jump in spending this year to $335 billion. Gartner said it expects greater price erosion and vendor consolidation in 2015 as competition heats up between cloud and on-premises software providers. Spending on datacenter systems is projected to reach $143 billion in 2015, a 1.8 percent increase from 2014, Gartner projected. Spending on datacenter infrastructure—servers, storage, networks—is projected to remain flat. But datacenter services and application support continues to soar as enterprises steadily shift from on-premise facilities to hyperscale datacenter providers.
- For us to realize these forecasts, we need to cross the chasm where 25 gig is cool because Ashton Kutcher has it. But to cross the chasm a community of a few hundred vendors needs to work out the technical kinks and go-to-market kinks.