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Rethinking Your Technology Deployments
How Data Centers are Evolving to Meet Customers’ Needs
Tuesday, June 18th at 2PM ET

2. Today’s Speakers:
Ben Abramovitz
SVP, Senior Industry Research Analyst
GE Capital
Rick Villars
Vice President, Datacenter & Cloud
IDC
Rethinking Your Technology Deployments
How Data Centers are Evolving to Meet Customers’ Needs
Tuesday, June 18th at 2PM ET

3. 3
Disclaimer: This webcast is for information purposes only and is not intended as an offer,
solicitation, or recommendation for the purchase or sale of a financial instrument or to
effect a transaction. The information contained within this webcast has been obtained
from and is based upon sources believed to be reliable. General Electric Capital Corporation
and any of its affiliates (collectively “GECC”) do not guarantee the accuracy or completeness
of the information and make no express or implied representations, but reasonable steps
have been taken to determine the accuracy and completeness of the information. All
opinions, projections and estimates constitute the judgment of the authors as of the date of
the webcast and are subject to change without notice. Market rates, valuations and
availability of financial instruments also are subject to change without notice. Nothing
contained within the materials constitutes financial, legal, tax, accounting or other advice,
nor should any investment or any other decisions be made solely based on this webcast.
You should obtain advice from qualified experts before making any investment decision.
This webcast is produced separately from any other activity of GECC and was completed
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GECC. This webcast may not be reproduced or redistributed in any form without prior
written permission from GECC. The use of this webcast in connection with the writing,
marketing or promotion of any financial instruments, services or products is prohibited.
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4. 4
Agenda
Ben Abramovitz, GE Capital Analyst, SVP of Telecom & Media Research
 Data center demand drivers….by the numbers
 Evaluating the data center operating costs & targeted areas of change
 Takeaways
Rick Villars, IDC Analyst – VP of Datacenter & Cloud Research
 3rd platform & “The New IT”
 The evolving datacenter landscape
Question & Answer
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5. 5
Drivers of Change in the Data Center
“Big Picture” Drivers
 Corporate IT needs and complexity are accelerating
• Need for real-time information and 24x7 IT availability
• Complexity of networks and technologies continue to rise
• Increasingly mobile workforce
• Increased regulatory and compliance requirements
• Rising Security Concerns
 Trend toward outsourcing data center operations and “as a service”
 Rapid growth in digital information traffic combined with declining cost of
transport & bandwidth
 Budget constraints remain tight
• Outsourcing represents an attractive alternative to capital intensive
in-house solutions
 Switching costs help sustain demand from existing customers
 Supply-demand imbalance in many markets
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6. 6
Public Cloud
Private Cloud
Hybrid Solution
Managed Services
Retail Colocation
Wholesale Colocation
As Compute Complexity Increases
Compute Complexity Combined with the Demands of Multiple Access Devices Add to
the Strain on IT Resources.
Cloud
Computing
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7. 7
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2011 2012 2013 2014 2015 2016
U.S.HostingInfrastrucutreServicesRevenue
($Millions)
Shared and virtual private server Complex managed Dedicated Colocation
Source: IDC, May 2012 1
Customers Need to Evaluate Data Center Hosting
Options
Dedicated, Internal, Private Clouds and Subsequently Hybrid Clouds Become
Precursors to Broad-based Public Cloud Adoption
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8. 8
Software as a Service (SaaS) – model where applications are managed & hosted in
a data center, purchased on a subscription basis and accessed by Internet browser.
Platform as a Service (PaaS) – model of on-demand delivery of development tools
and services which allow the software applications to be coded and then deployed.
Infrastructure as a Service (IaaS) – on-demand delivery of virtualized servers,
storage, networking and operating systems.
and their “as a service” Options
8
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9. 9
0
10,000
20,000
30,000
40,000
50,000
2011 2012 2013 2014 2015 2016
USCloudServicesRevenue($M)
SaaS PaaS IaaS
Source: IDC2
All Aspects of “_aaS” are Anticipated to Grow in the U.S.
SaaS is Forecasted to Grow Faster than the Overall Market for As-a-Service
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10. 10
Changes Will Likely Drive Companies to
Re-Evaluate In-House Options
 Pros of In-House may include:
• Certain of the amount of available capacity but must overbuild
• Better power efficiency (lower PUE) through customization
• Stronger security management
• Facilities control
But they may lose out in too many areas
 Cons of In-House may Include
• Capital intensive when capital could be deployed elsewhere
• May choose to run lower tier DCs
• Connectivity and power may be limiting
• Distract from core operations
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11. 11
0
100
200
300
400
500
600
700
800
2009 2010 2011 2012 2013 2014 2015 2016
Millionsquarefeet
Internal U.S. Data Centers (in millions of sq ft) Service Provider U.S. Datacenters (in millions of sq ft)
Source: IDC3
3rd Party Data Center Growth Outpaces Industry
Trends Favor 3rd Party Data Centers as Most Companies Attempt to Achieve Some
Scale and Flexibility
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12. 12
0
10,000
20,000
30,000
40,000
50,000
2012 2013 2014 2015 2016 2017
PBspermonth
North American IP Traffic
Source: Cisco VNI, 2013
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2012 2013 2014 2015 2016 2017
TBspermonth
North American Mobile Data Traffic
Source: Cisco Mobile VNI, 2013
As More Data is Generated
Mobile Data Traffic Growth is Most Significant Driver of Global IP Traffic Increases
Most Internet Traffic
Originates or Terminates in
a Data Center
12
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13. 13
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
0
10
20
30
40
50
60
2003 2010 2015 2020
inmillions
WW Connected Devices Population Connected Devices / Person
Source: Cisco, 2011
15% CAGR '10-'20 in Number of
Connected Devices
…………from More Devices
A Large Portion of Connected Growth is Expected to be Derived from M2M as
the Age of the Industrial Internet Takes Hold
13
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14. 14
70%
75%
80%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2011 2012 2013 2014 2015 2016
EBsperyear
WW Traditional data center traffic WW Cloud data center traffic
Traffic Within DC as % of Total Traffic
Source: Cisco Cloud Forecast, 2012
Data Centers Will Become Much Busier Places
Despite 31% CAGR of Total Data Center Traffic, Majority of Traffic Forecasted to
Remain WITHIN the Data Center, at ~75% vs. Traffic that gets transmitted to end
users or other data centers
14
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15. 15
With Cloud Computing Driving the Majority of Growth
Public Clouds and Hybrid Clouds Will Add to the IT Complexity Landscape
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2011 2012 2013 2014 2015 2016
EBsperyear
WW Traditional data center traffic WW Cloud data center traffic
North American Cloud data center traffic
Source: Cisco, 2012
15
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16. 16
Source: GE Capital
$s
Time
Traditional IT TCO
Private Cloud TCO
Cost Savings of 30 to 40% Will Force Companies to Reconsider At Least Some Use of
Shared Third-Party Resources Over Time as Security Considerations Diminish
And the TCO Gap Will Likely Force Migration Over Time
16
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17. 17
We Will Need to Process All the Data
0
10
20
30
40
50
60
2011 2012 2013 2014 2015 2016
inmillionsofworkloads
North America Cloud data center workloads
North America Traditional data center workloads
Source: Cisco Cloud Forecast, 2012
Traditionally, one server carried one workload,
but compute capacity & virtualization allow for
multiple workloads per physical server
0
5000
10000
15000
20000
25000
30000
35000
40000
2012 2020
Digital Universe in the U.S.
Source: EMC, IDC, GE Capital
inexabytes
Digital Universe defined as digital bits
created, replicated and consumed
each year
17
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18. 18
……….Store the Data
Increasingly, data, both structured and unstructured will need to be stored for both
short term and long term analysis
0.0
5000.0
10000.0
15000.0
20000.0
25000.0
30000.0
35000.0
40000.0
45000.0
50000.0
2010 2011 2012 2013 2014 2015 2016
Disk-based long-term data preservation
Disk-based active archive
Worldwide Disk Storage Shipments for
Archive Capacity (in Petabytes)
Source: IDC
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
7000.0
8000.0
9000.0
2010 2011 2012 2013 2014 2015 2016
Archiving software and SaaS
Archival disk-based storage
Worldwide Archival Solution Spending
(millions US$)
Source: IDC
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19. 19
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012 2013 2014 2015
WorldwideBigDataTechnology
Revenue($M)
Servers Storage
Source: IDC12
……….Analyze the Data
Big Data combines both structured and unstructured and may eventually become
table stakes for nearly all companies to compete effectively
19
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20. 20
Forcing Us to Mitigate IT Spending Risk by Shifting from
Fixed to Variable Spending
* Internet-centric businesses with very consistent workloads have less variability in IT needs
Matching IT risks with company needs is no different than banks
matching the duration of their assets and liabilities.
For years, there has been a mismatch between short term
variable demand and longer term fixed investment and
implementation of technology assets, which companies have
been unable to close.
Building too far ahead of demand is not economical as
technology assets have non-linear useful life profiles.
…… But the __aaS models alter the equation,
primarily when outsourced*
20
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21. 21
The Data Centers are Utilizing More Power
Rising Power Utilization also Raising Needs for Power Distribution, UPS & Cooling
0
10
20
30
40
50
60
2007 2011 2012 2013E
WW Datacenter Power Demand (in GWs)
Source: DatacenterDynamics, GE Capital
inGigawattts
~
Data centers currently use an estimated 2% of global electricity....with
forecasts predicting that 9-10% of global electrical grid production will
be used by DCs by 2020
21
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22. 22
57%
8%
18%
13%
4%
Servers Networking Equipment Power Distribution & Cooling
Power Other Infrastructure
Source: perspectives.mvdirona.com
Based on 8MW facility, which can
support ~46k servers, 1.45 PUE, 3
year amortization on servers and
10 year amortization on
infrastructure
And Aside from Servers, Power Distribution is the
Largest Monthly Cost in the DC
Significant Effort is Underway to Improve Power Distribution and Server Useful Life So
the Math Will Alter Somewhat over Time
22
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23. 23
Takeaways
• Demands on datacenter utilization continue to grow at a rapid clip with revenues
and data formation expected to increase at double digit CAGRs
• Continued virtualization of existing servers until the latter half of the decade
• Companies are evaluating multiple “_aaS” models to determine what best suits
their needs
• How IT thinks about compute is changing to better match the variability of
corporate needs with the expenses associated with traditionally fixed IT assets
• Increased use of hybrid cloud and public cloud solutions to improve mismatch of
needs with corporate assets
• Expect further infrastructure cost reduction efforts through increased use of solid
state drives, higher average DC temperatures, SDNs and other innovative
adjustments to the internal environment
23
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24. The New IT and Datacenter Dynamic
Rick Villars
Vice President
Datacenter & Cloud
June 18, 2013

25. 3rd Platform Defines “The New IT"
25
$3.2T
$5.3T
1985-2009
2009-2020+
1960s-1985
© IDC Visit us at IDC.com and follow us on Twitter: @IDC

26. Datacenter Expansion Is Key
to Business Success
26

27. 3rd Platform Datacenter Workloads
27
Transact
 Relate/Record
Content Serving
 Ingest/Deliver
Archive
 Organize/Retrieve
Compute
 Analyze/React

28. Today’s Typical Datacenter
28
Transact
Content
Serving
Archive
Compute

29. Datacenter Transformation Opportunities
29
Transact
Content
Serving
Archive
Compute
Virtualized Datacenter
(Private Cloud)
 Global Expansion
 Mobile Extension
 CAPEX to OPEX
 Peak demand offload

30. Datacenter Transformation Opportunities
30
Transact
Content
Serving
Archive
Compute
Content Explosion
Virtualized Datacenter
(Private Cloud)
 Industry Digitization
 Monetizing Content
 Compliance

31. Healthcare Datacenter Workload
Access Speed Shapes Initial Choice
31
Transact
Content
Serving
Archive
Compute

32. Healthcare Datacenter Workload
Data Privacy/Sovereignty Shapes Long Term Choice
32
Transact
Content
Serving
Archive
Compute
Content Custodians

33. Cloud
Mobile
Data
App
Data
Public
Data
Data Gravity
Concentration of Data and Datacenters
Most new Datacenters
will be near cloud Datacenters
33

34. WW Public Vs. Private Cloud:
Storage Capacity (EB)
0
20
40
60
80
100
120
140
2010 2011 2012 2013 2014 2015 2016
Public Cloud (Self) Public Cloud (OEM)
Private Cloud (Host) Traditional
34

35. Cloud Opportunities
35
Transact
Content
Serving
Archive
Compute
Content ExplosionBusiness Integrated
Analytics
Virtualized
Datacenter Risk Management
 Business Optimization
 Customer Experience

36. Variable Computing:
Living in an Instance Universe
Traditional Model
(Fixed Apps)
 Continuous operation
 Traditional DC workloads
New Model
(Variable Apps)
 Intermittent operation
 3rd Platform Workloads
36

37. Target Workload Profile for SPs
37
Transact
Archive
Content
Serving
Compute

38. WW Datacenter Buildout (Units)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2010 2011 2012 2013 2014 2015 2016 2017
New >20,000 Sq ft Datacenter Builds
(Expansion & Replacement)
High-end Internal DCs (>20K sqft) High-end SP DCs (>20K sqft monolific)
Mega SP DCs (>40K sqft modular)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 38

39. WW Datacenter Buildout (Space)
-
10
20
30
40
50
60
70
2010 2011 2012 2013 2014 2015 2016 2017
M Sq Ft New >20,000 Sq ft Datacenter Builds
(Expansion & Replacement)
High-end Internal DCs (>20K sqft) High-end SP DCs (>20K sqft monolific)
Mega SP DCs (>40K sqft modular)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 39

40. WW Datacenter Buildout (Space)
-
10
20
30
40
50
60
70
2010 2011 2012 2013 2014 2015 2016 2017
M Sq Ft New >20,000 Sq ft Datacenter Builds
(Expansion & Replacement)
High-end Internal DCs (>20K sqft) High-end SP DCs (>20K sqft monolific)
Mega SP DCs (>40K sqft modular)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 40

41. Rapidly Evolving DC Landscape
IT Solutions
Suppliers
ODMs and
Distributors
Network SPs
SIs & MSPs
Hosting/Cloud
SPs
DC REITs
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 41

42. Future of the Datacenter
 DC placement decisions shaped by network and application
characteristics, not HQ location
• Growing importance of data factories based on hyperscale and
hyper-standardization
 Hosted private cloud and public cloud is about maximizing
revenue from variable compute
• IT agility for variable loads will dominate the IT solutions agenda
 Growing distinction between data owners and data custodians
• Cloud providers become the new leaders shaping storage and
network technology choices
42

43. Questions?
Ben Abramovitz
SVP, Senior Industry Research Analyst
GE Capital
ben.abramovitz@ge.com
If you would like to receive our GE Capital Telecom or
Media Quarterly, send your request to
ben.abramovitz@ge.com
Rick Villars
Vice President, Datacenter & Cloud
IDC
rvillars@idc.com
For information regarding the IDC presentation or
IDC reports, please contact Stephen Clifford at
sclifford@idc.com
Sources:
1 IDC, U.S. Hosting Infrastructure Services 2012 – 2016 Forecast #234555 May 2012
2 IDC, WW & Regional Public IT Cloud Services 2012–16 Forecast, #236552 Aug 2012
3 IDC, U .S. Da tacenter 2012 – 2016 Forecast #237070 September 2012
4 IDC Digital Universe Study, sponsored by EMC, December 2012
5 IDC WW Archival Storage Solutions 2012 – 2016 Forecast #235861, July 2012
6 IDC WW Archival Storage Solutions 2012 – 2016 Forecast #235861, July 2012
7 IDC, WW Big Data Technology & Services 2012-2016 Forecast, #238746, Dec 2012