collective unconscious of the smarter planet

Wow! Interesting analysis - and crazy implications.

IBM is reportedly talking to Lenovo about selling its x86-based server business to Lenovo and the move would make a lot of sense.

If the talks, flagged in the Wall Street Journal and CRN, sound familiar that’s because Big Blue famously unloaded its PC business to Lenovo in a win-win deal. Lenovo went on to be one of the premier PC makers and IBM focused on software and services and got ahead of trends such as analytics.

To say the IBM’s PC situation then and today’s server state of affairs rhyme would be an understatement. You could argue the situations are the same thing. When IBM offloaded its PC unit, no one saw tablets coming. All IBM knew is that the margins stunk and it wanted higher value wares. The post-PC era was years away.

Fast forward to the server market, which is ripe for disruption. Server sales are doing ok. Companies will have to buy servers right? Of course they will—-for about another three to five years. The reality is servers are going in the following directions:

Specialization by workload. Think IBM’s PureSystems and Oracle’s Exadata efforts.

1. Commodity-ville on the x86 front. You can’t ignore that companies like Google and Facebook go right to white box makers for servers. That reality isn’t so hot for HP, Dell and IBM.
2. You need to own the silicon and intellectual property to really work the server business. IBM’s Power systems won’t go anywhere. Oracle has SPARC. Hewlett-Packard is going processor agnostic with Moonshot, a server line that appears to be innovative.
3. Fewer server buyers. As companies move to the cloud, demand for compute will only increase. The problem. Server makers will be selling in bulk to fewer customers and cloud computing farms. There will only be so many cloud providers. Enterprises large enough to roll their own data centers will be few and far between.

Now let’s talk timing here. The server market won’t unravel tomorrow. It won’t unravel in a few years. But Armageddon will occur and the clock starts ticking right about now.

Why? An enterprise that buys a server right now will start a tax depreciation clock that will run about three years. Once those three years are up and those assets depreciate, the CXO in charge will weigh the costs and benefits of the cloud vs. running a data center, server cluster or whatever. I’ll bet that in three years the cloud will win by a wide margin. Let’s face it—-the cloud is already starting to win and all you have to do is show up at one of Amazon Web Services’ customer powwows to know the writing is on the server rack.

On Thursday, I caught up with Cycle Computing CEO Jason Stowe. There’s a lot to like about Cycle Computing. First, the company is bootstrapped so there’s instant respect. Second, Cycle Computing is at the forefront of making high performance computing clusters for the masses. And third, Cycle Computing has top insurance and pharmaceutical companies as customers. Cycle Computing had massive customers from day one. In other words, Cycle Computing is the real deal, hooked up with Amazon Web Services and will enable a lot of science to happen just by democratizing HPC for smaller companies.

Stowe noted that Cycle Computing is starting to land manufacturing and engineering customers now for its HPC management software and cloud connections. In other words, this HPC for the masses is catching on. If you play this out, there will be fewer servers sold because folks will be using Rackspace, AWS or some other former hardware focused vendor.

Today, it’s big data and research compute driving Cycle Computing demand. Tomorrow every company will have the mathematic models and horsepower to simulate just about anything. You won’t buy your own servers for that computing power.

Stowe said servers will become like wheat fields not things you name. “Today servers are hugged, named and managers know their quirks. There’s an attachment. In the future server clusters will be more like wheat fields. You grow the wheat, reap and sow, eat and replant the seeds. There’s no attachment to the wheat,” said Stowe.

In other words, Stowe’s excellent analogy on servers and meeting compute demand translates into cloud farms and fields. Most companies are going to hit the brakes on new server buying as soon as the depreciation ends and new compute demand has to be met. Play this out and the profit margins on servers aren’t going to look so hot.

IBM sees all of the servergeddon scenarios developing and that’s why it’s ditching its commodity server business now. Let Lenovo, which has the scale and ambition to do the commodity server game, carry the ball from here and duke it out with HP and Dell.

Another good run-down of the HP ProLiant Gen8 - this time from Forrester. They seem to believe this is a pretty significant announcement.

On Monday, February 13, HP announced its next turn of the great wheel for servers with the announcement of its Gen8 family of servers. Interestingly, since the announcement was ahead of Intel’s official announcement of the supporting E5 server CPUs, HP had absolutely nothing to say about the CPUs or performance of these systems. But even if the CPU information had been available, it would have been a sideshow to the main thrust of the Gen8 launch — improving the overall TCO (particularly Opex) of servers by making them more automated, more manageable, and easier to remediate when there is a problem, along with enhancements to storage, data center infrastructure management (DCIM) capabilities, and a fundamental change in the way that services and support are delivered.

With a little more granularity, the major components of the Gen8 server technology announcement included:

• Onboard Automation – A suite of capabilities and tools that provide improved agentless local intelligence to allow quicker and lower labor cost provisioning, including faster boot cycles, “one click” firmware updates of single or multiple systems, intelligent and greatly improved boot-time diagnostics, and run-time diagnostics. This is apparently implemented by more powerful onboard management controllers and pre-provisioning a lot of software on built-in flash memory, which is used by the onboard controller. HP claims that the combination of these tools can increase operator productivity by up to 65%. One of the eye-catching features is an iPhone app that will scan a code printed on the server and go back through the Insight Management Environment stack and trigger the appropriate script to provision the server.[i]Possibly a bit of a gimmick, but a cool-looking one.
• Smart Storage – More of a roadmap than a single product, Smart Storage starts with the introduction of Advanced Data Mirroring, a triple-redundant striping technology that provides a claimed 1000X (I have no way to verify this number, but logic says that three stripes will be much more reliable than two by a large margin if you replace the failed disk promptly). Also announced were intelligent flash caching for improved performance and a combination of faster memory and PCIe 3 I/O.[ii]
• Location-Aware Infrastructure Technology – Introduced under the rather opaque term “3D Sea of Sensors” (the sensors are not particularly 3D and there is no obvious “sea”), HP has introduced some extremely powerful infrastructure management capabilities that provide immediate benefit and can also work as part of a comprehensive DCIM solution. The constituent parts included location-aware racks and servers, intelligent PDUs, and rack-level power capping. Combined with other unspecified tools, these are the core capabilities to implement comprehensive intelligent power and cooling management, visualization, and workload-aware scheduling. Note that in order to fully utilize these capabilities you have to buy into a complete HP infrastructure stack of racks, and PDUs and their associated software, as well as the servers themselves. Looking into my crystal ball, it’s pretty obvious that HP has serious designs on the DCIM space, and current vendors with whom it is in “co-opetition” should be looking over their shoulders.
• Insight Online – This was in many ways the most significant piece part of the announcement, comprising as it does a complete online portal for the delivery (“cloud-based” of course as is everything from Kleenex[iii]to tractor parts) of diagnostic, maintenance, and other services to HP customers. These services include reactive diagnostic and remediation as well as an escalating menu of proactive services and additional operational assistance, and the portal serves as a central integrator of all information about a given asset, including lifecycle and contractual details as well as technical information. HP makes claims that this facility will reduce time to problem resolution by up to two-thirds and improve first-call resolution rates. Obviously it is impossible to judge the real operational quality of a complex service like this from a presentation and staged demo, but on the face of it, HP has really moved the needle in terms of service delivery with this capability.

My net take is that this is a significantly more important announcement than the last several from HP or any other mainstream server vendor, and it sets a high bar for competitors. In the coming month or two we can expect other competitive announcements, and I think that some pieces of hardware, such as PCIe-3, improved memory reliability and performance, and increased integration of flash memory into storage, will be replicated wholly or in part by competitors. What will probably set HP apart is the cumulative impact of their intelligent provisioning, diagnostics and update capabilities, along with the potentials of their service portal and associated services.

For HP customers this is unmitigated good news. For competitors it is a challenge, and we anxiously await their responses. Any HP customers are welcome to weigh in on their impressions of these announcements.

A detailed run-down of HP’s new ProLiant Gen8 servers.

Look out system administrators: Hewlett-Packard wants to give you more time to play video games or polish up your resumes – or both – with the forthcoming launch of its ProLiant Gen8 servers. .

As part of its annual shindig with partners and resellers, which was hosted in Las Vegas a week ago, the biggest server shipper in the world previewed its next generation of ProLiant x86 servers. The Gen8 machines will be based on the also impending “Sandy Bridge-EP” Xeon E5 processors from Intel, which are due for their own launch before March comes to an end. Because these Xeon E5 chips are not out yet, HP was limited in talking about the feeds and speeds of the Gen8 machines, and as El Reg previously reported, the company’s top server brass talked generally about the improved I/O and storage scalability of the boxes and how this was critical in data centers where storage capacity needs are far outpacing the need for more CPU capacity. We glossed over the management capabilities HP talked about in our initial story, and now we will drill down into it.

During the webcast previewing the Gen8 boxes, Mark Potter, general manager of the Industry Standard Servers and Software division at HP, explained that HP set out to re-architect its machines, systems management tools, and back-end support systems as part of the “Project Voyager” initiative, a two-year, $300m effort by the company to revamp its server businesses. (The companion projects in this $300m effort are Project Moonshot, the low-energy server effort that HP announced back in early November with ARM-based servers. Project Odyssey, also debuted last November and will bring the Xeon processors from Intel to the Integrity and Superdome 2 classes of Itanium-based machines and make Linux and Windows more like HP-UX in terms of scalability and reliability for mission-critical workloads.)

“This is about re-architecting the server so it is ready for the scale that the cloud needs,” said Potter, saying that the current way of doing manual operations on servers was “unsustainable.” He said that in a typical data center, weighing in at 10,000 ft², manual operations cost an average of $24m over three years, and that running the facilities manually (rather than automatically) adds another $29m in higher energy costs over the same three years. He cited statistics that this class of data center typically has a downtime cost of around $10m an hour.

With the system management tools that HP is rolling out with the ProLiant Gen8 boxes, the tools would give back another 30 days a year (that’s six weeks if you work a five-day week) per system administrator and would also allow companies to double the capacity in their data centers because of easier and more automated management and more sophisticated power capping and load balancing across machines in the data center.

“These servers are so smart that they are going to virtually take care of themselves,” said Potter. That may not be music to the ears of system administrators, but it probably is to the beancounters. (Right up to the moment where something really awful goes wrong and no one on staff has any idea how to fix it because the CEO used the sysadmin budget to buy a corporate jet.)

The system software that HP has cooked up is agentless, and the system now boots up in under three seconds. The servers have over 1,600 parameters that are tracked inside the box through what HP calls Active Health, which not only allows for problems to be resolved around five times faster than with the predecessor ProLiant Gen7 machines, but also allows for Insight management tools to work with HP’s support systems (now branded Insight Remote) to do proactive fixes before something goes wrong. So if a disk drive is getting wobbly, the system notifies HP, which ships a new drive. Simple stuff like that. The ProLiant G6 servers from several years ago had a “sea of sensors” that were dedicated to monitoring power and cooling to try to optimize the servers for power efficiency. But with the Gen8 machines, the idea is to focus on the health of the system.

“We have richer information, and we can get at it five times faster,” John Gromala, director of marketing for the ISSS division at HP, tells El Reg. “And that information can flow back to HP to help the company to improve its support operations.”

In early tests, the new Insight Online and Insight Remote services working through all those new sensors helped system administrators attain a 95 per cent first-time fix rate on problems and fix problems 40 per cent faster, too.

The new ProLiant Gen8 tools also include Smart Update, which allows the provisioning and updating of thousands of servers with the click of a mouse. On a single server, Smart Update runs on the Integrated Lights Out (iLO) service processor in the box, but if you are managing a large number of machines, you plunk it onto a Windows or Linux machine and it can then sequence updates across hundreds or thousands of machines, both for updating the firmware on the ProLiant machines and any drivers that are running to link peripherals to the server.

“This is the single biggest thing that IT shops have to deal with,” says Gromala.

Potter, his boss, said that on a rack of 32 PowerEdge servers from Dell, it took 295 minutes to provision the machines, but with the Gen8 machines and Smart Update tools, 32 machines could be provisioned in 10 minutes. Presumably the ProLiant G6 and G7 machines were no more or less pokie than the PowerEdgies.

Smart Update does not provision and patch hypervisors, operating systems, or application software. It does link into the new HP tech support portal, called Insight Online.

Stack ‘em and rack ‘em

HP is thinking more than across a bunch of servers in a rack, but across all the racks in the data center. In conjunction with the ProLiant Gen8 preview, HP trotted out Location Discovery Services and Thermal Discovery Services, two bits of software from HP’s Technology Services unit, which worked in conjunction with the ProLiant server group to cook up these extensions to the Insight Control v7 management tools. These Insight tools are one of the reasons why HP needed to buy Compaq a decade ago.

The ProLiant Gen8 machines will come with Platinum Plus-rated power supplies, which have a 94 per cent efficiency rating. But this is not enough to make the data center itself more power efficient. The location and thermal discovery services will allow a server to figure out where it is in the data center racks and rows, what power distribution units it is feeding off of, and what the thermal and power conditions are like around it. Then, having assessed its thermal and power environment, the server can use data from these tools to automatically configure its power capping settings so it doesn’t cause an overheating situation. All of this data is automatically captured by the PDUs – yup, you need to buy HP PDUs – and sysadmins don’t have to try to keep their server power cap and location data in a spreadsheet.

What HP did not talk about during its preview is what all of the add-ons for its Insight Control v7 software, as well as Insight Online, would cost IT shops. One thing for sure: You can bet it will not be free.

The latest quarterly report from HP reveals continuing issues… no surprise…

Five months into the role as HP CEO, Meg Whitman is finally detailing the tech titan’s turnaround plan that involves “fixing execution” and cutting costs to save cash before it ups investments in R&D.

In a tough fiscal first quarter, HP ironically saw an upturn in the software and to a much lesser extent the services businesses – the strategic areas of focus for Whitman’s hapless predecessor – but declining sales across all core hardware divisions again.

Sales in the three months ended 31 January fell 7 per cent to $30bn, while operating and net profits sank 41 per cent and 44 per cent to $2bn and 1.46bn respectively.

“Frankly, it was a tough quarter, and every business had its challenges,” said Whitman in a call with analysts last night.

…

Enterprise Servers, Storage and Networking (ESSN) revenues declined 10 per cent to $5bn: networking revenues were flat; Industry Standard Servers fell 11 per cent, Business Critical Servers dropped 27 per cent and storage was down 6 per cent.

Whitman described this segment as a “highly competitive environment that was compounded by the hard disk shortage. in our broader storage business, we’re still working through a product transition”.

So that leaves Software and Services, the units that were a core part of Apotheker’s vision which were thrust into the foreground as he mulled over options for the future of the PC biz, killed of WebOS hardware and splashed the cash on Autonomy.

Services revenues hardly provided reasons for investors to cheer - sales grew one per cent to $8.5bn, with Technology Services turnover up 2 per cent, Application and Business Services flat and IT Outsourcing grew 2 per cent.

The Software division pushed up revenues by 30 per cent to $946m including numbers from Autonomy, fuelled by 12 per cent growth in licensing, 2 per cent growth in support sales and 108 per cent in services.

Whitman has been on a tour of duty since the own goals HP scored last summer, attending 80 customer visits in the US and Europe and meeting staff and channel partners.

“We’ve been working hard to set the right tone, calm the waters and reassure our stakeholders that HP is the same reliable company … So what have I found? Certainly, I found some skepticism. But I have also found that we have incredible support.”

She said HP is on the right trajectory “but we have a long road ahead of us” and its recovery plans are not helped by continued cautious spending in US commercial, weak demand in consumer and the challenges in Europe.

Whitman said the major issues to overcome include “fixing our execution” by reducing SKUs to remove supply chain complexities; upgrading sales tools and systems to react more quickly to punters; and upping sales productivity by “rationalising our go-to-market”.

The second major hurdle has roots in the strategy devised by disgraced former CEO Mark Hurd, who slashed R&D. HP said its businesses were under “intense competitive pressure” and that it was feeling the strain from “tectonic [industry] shifts”.

“We didn’t make the investments we should have [made] during the past few years to stay ahead of customer expectations and market trends. As a result, we see eroding revenue and profits today. We need to invest now as a market leader from a position of strength.”

The final issue pulled up by Whitman is how HP reacts to emerging “delivery, consumption and business model[s]” for tech areas including cloud, security and information management.

Whitman said there was a “once-in-a-generation” chance to define the future of tech – clearly she can still draw upon cliches learned in her brief political career – but she said HP needs to “stabilise financial performance” and generate profits to invest.

“And it’s clear, from both our revenue and margin profile, that our current cost base just isn’t affordable. On the current trajectory, we just won’t have the capacity that we need to invest,” she said.

“For years, we’ve been basically running our business in silos. And under that model, we built some of the leading franchises in technology, but it’s also made us too complex and too slow,” she said.

HP has been through years of pain with a series of redundancy programmes hitting morale, but more can be done to “streamline operations” such as tackling business processes by standardising and automating workloads.

“We can also take a ton of complexity out of the system, improve our effectiveness and significantly reduce costs,” said Whitman.

“It’s not easy work and it’s not a quick fix, but it holds the potential to improve the way we operate and execute, and it simply has to be done. We have got to save to invest. We have got to save to grow … I have no doubt that we’ll turn HP around.”

Turnaround strategies take time to bed in but with the founders’ families and an incredibly political board to contend with, Whitman will be looking over her shoulder for some time yet.

HP is upping their game in the mobile administration department. Worth noting.

HP is embracing mobility with apps to allow sysadmins to receive alerts, manage systems and even shut down servers, all from the comfort of their booth seats at the pub.

HP already provides SiteScope, with which one can monitor servers and receive alerts on Android and iOS devices. But in a presentation at the HP Global Partner event in Las Vegas the company promised a good deal more functionality would be coming to mobile clients.

The new mobile management apps will be designed to show off the capabilities of HP’s just-announced Gen8 servers. Those servers apparently monitor 1,600 systems parameters, data which will be available on the mobile app.

But mobile users will also be able to create management scripts, PC World reports, allowing the user to automate common management tasks even if those tasks are unique to their environment. The app will even report the physical location of a failing server, which can only help.

It’s not clear when the app will be available for download, but the Gen8 servers will be available next month and HP will likely want to show off the mobile clients with them.

So there’s still a few weeks to convince the company that an Android (or iOS) device is essential to modern system administration… if that’s not already obvious.

Great article on how the CTO of Capgemini is looking at recent developments in enterprise adoption of the cloud. Good stuff.

As Capgemini’s CTO for North America, Joe Coyle hears an awful lot about cloud computing. He hears it from customers that want to evaluate cloud solutions and from vendors that want to win that business. Capgemini, a $12 billion global systems integrator, has relationships with all the major vendors and many enterprise customers, so it’s interesting to hear what Coyle has to say about the current state of the market.

Here are my main takeaways from a recent conversation with him.

1: IBM is cloudier than you think.

Big Blue has a pretty potent set of cloud options but it’s going about its business very cleverly. Given it’s big-iron heritage, IBM rarely talks about the hardware component of its cloud portfolio, Coyle said.

“They’re attacking this from a software perspective. They’ve taken Tivoli and are building this software umbrella so that you can take whatever you’re running in your data center now and put all or part of it in a public or private cloud,” he noted. IBM’s 2010 acquisition of Cast Iron also give it a slick appliance that lets customers integrate in-house apps with SaaS applications running outside.

He doesn’t see IBM cloud penetrating a ton of new smaller businesses, but for many existing IBM shops — and there are a ton of them — IBM cloud is a no brainer.

2: Microsoft Azure has a tough row to hoe

Coyle is of two minds on Windows Azure, the platform-as-a-service (PaaS) underlying Microsoft’s cloud strategy.

“Azure’s been a bit of a disappointment,” he said. “When Microsoft briefed us on it years ago, all the national [systems integrators] were chomping at the bit. But then it stumbled.”

“Then the message was the software would only run on Azure. That’ s fine, but by that point, the world had moved on, companies were already using Amazon,” he said. The usual argument that Azure is a PaaS while Amazon Web Services (AWS) is Infrastructure-as-a-Service (IaaS) simply doesn’t matter to most customers. The big AWS draw is they know they can deploy their applications on AWS now and move them to another hosted or in-house data center, later.

On the plus side, the Azure technology is solid and, unlike previous Microsoft development technologies, forces developers to follow the rules — they can’t design software services that misbehave. ”Azure is extremely powerful and if [Microsoft] can get its act together people will try it,” Coyle said.

But overshadowing all that technical mastery is the perception of Azure as a closed platform — despite its multi-language support.  Microsoft’s single biggest problem is customer suspicion that it will use Azure to lock them into the next wave of Microsoft technologies, essentially replacing the Windows/Office upgrade cycle.

“I’m not saying it’s true, but it’s what people think,” Coyle said.

3: Amazon is Amazon

Amazon Web Services are what they are: extremely flexible and leading the league in public cloud. AWS suffered a couple black eyes in 2011 with an embarrassing four-day outage in April and then a widespread reboot glitch later in the year.

Coyle is pretty forgiving of these miscues. The April outage, he said, was largely due to people  implementing their work incorrectly, something that AWS tried to fix manually. There are things you can do now in AWS to prevent this stuff, to build in more reliability and redundancy, although users will have to pay for it, he said.

The bottom line? Glitches and all, Amazon is the incumbent public cloud power and will stay that way, he said.

4: OpenStack as big-time cloud disruptor

Coyle is also bullish on the OpenStack movement, which is building a standard cloud foundation out of open-source tools. Initiated by Rackspace and NASA, it’s achieved critical mass with nearly every IT provider — from Dell, to HP, to Cisco, to Citrix — aboard and Rackspace offloading management to a more neutral OpenStack Foundation. 

“OpenStack will change the world of cloud computing. As a lot of smaller companies look to build their own clouds, this will be a natural choice,” Coyle said.

Who stands to lose if that’s the case? Ironically, the Dells and HPs of the world — all of which are building their own clouds. “Why do you think they joined?”  His feeling is these hardware companies — many of which were building their own more vendor-specific clouds — are hedging their bets.

Will OpenStack affect Amazon? “No. Amazon is Amazon,” he said.

5: CIOs are getting over cloud phobia

It’s taken time, but the economics of cloud computing are too good for CIOs to ignore, Coyle said. Any doubts they had about moving at least some corporate data to an outside cloud storage provider, for instance, have evaporated in recent months.

And they’re getting emboldened to do more than storage. The advent of Hadoop and NoSQL technologies means that companies could actually get some use out of all that old stuff sitting on tape or in platters, he said.  Uploading that information, and massaging it with the latest analytics means that historical data can be used to test assumptions and new models, for example, seeing what a price change means to sales over time.

Wringing real value out of old data is a pretty good proposition for most CIOs.

More legal shenanigans from HP and Oracle over Itanium. Oracle claims that HP is paying Intel to continue developing Itanium.

Late Friday, Oracle filed a countersuit against HP, which sued Oracle back in June because Oracle said in March that it would not be developing future releases of its database, middleware, and application software on future Itanium processors.

It’s hard to tell who is stretching the truth more it in the ongoing lawsuit, and now countersuit, between Hewlett-Packard and Oracle over the fate of the Itanium processor from Intel. The reason is that the court documents coming out describing the situation are heavily redacted, with all the juicy bits that might offer some clarity being blacked out.

In the amended cross-complaint filed last Friday, which was posted on the Scribed document sharing site here, Ellison & Co’s lawyers are slapping back at HP with seven counts, including charges of fraud, defamation, intentional interference with contractual relations, intentional interference with prospective economic advantage, as well as violation of the Lanham Act and two violations of the California Business and Professional Code.

“HP engaged in a multi-year campaign of secrecy and deception designed to conceal the truth about Intel Corporation’s commitment to the Itanium microprocessor in order to extend its Itanium server business at Oracle’s expense and reap large profits from its own unsuspecting installed base of Itanium users,” Oracle lawyers wrote in the brief sent to Judge James Kleinberg of the California Supreme Court in Santa Clara.

“When Oracle announced the truth about Itanium – that Intel’s strategic focus was not on Itanium but on its competing Xeon line of microprocessors, and that Itanium was nearing its end of life – HP reacted with a ferocious effort to foment false customer outrage and to vilify and defame Oracle, all to buy itself more time to milk its customer base and falsely blame Oracle for Itanium’s demise.”

Oracle says that in the process of document discovery in the Itanium case, it stumbled upon an agreement whereby HP is paying Intel to keep the Itanium processor alive – something Oracle says it did not know when it made the decision to pull software support from the future Itanium processors back in March. Oracle’s beef is that this revised “Itanium Collaboration Agreement” was done secretly, without partners or customers being told what the deal is.

“There is, of course, nothing wrong with entering into a contract with a supplier to ensure the supply of a key input,” Oracle said in its countersuit. “Had HP simply entered into the Intel deal and revealed it – perhaps taken credit for it – Oracle would have nothing to complain about.” Oracle contends that “Intel desperately wanted out of Itanium” and that this as well as the HP agreement to essentially pay Intel to keep the Itanium roadmap alive was something that it was entitled to as an HP and Intel partner and that HP’s customers (who are often users of Oracle’s software as it turns out) are similarly entitled to.

By torpedoing the Itanium platform, Oracle can sink a big portion of HP’s enterprise systems profits, which come from HP-UX system sales and support contracts. Oracle has shown no love to HP since it acquired the Sun Microsystems hardware and operating system business and it got worse when HP fired Larry Ellison’s tennis buddy, Mark Hurd, as CEO.

It got even worse when HP hired former SAP CEO Leo Apotheker to replace him and former Oracle president Ray Lane to be its chairman. Once Hurd came into Oracle as co-president, it was a matter of months before the gloves were off. Whatever the legal, technical, or market merits of Oracle’s moves with regard to Itanium, the intended effect has been realized: HP’s Unix business is shrinking. Then again, so is Oracle’s Unix business, as the latest Gartner server figures show. So far, IBM seems to be the big winner in the tit-for-tat legal spat between these two companies.

Oracle is also filing its countersuit against HP because it says that it was fraudulently induced into entering in an agreement that allowed it to hired Hurd after he had been let go from HP. It claims that HP concealed and misrepresented the “truth about Itanium” and concealed “material information” that it was about to hire Apotheker and Lane to run the company.

Oracle also reminded everyone that HP tried to add clauses to the Hurd agreement that would guarantee HP’s access to Java, its ability to sell Solaris on x86 platforms, and ongoing support from Oracle for its software stack on HP-UX. This language was struck from the commitment reaffirmation portion of the Hurd agreement, and in a draft supplied by Oracle, all that was left was this:

“Oracle and HP reaffirm their commitment to their longstanding strategic relationship and their mutual desire to continue to support their mutual customers. Oracle will continue to offer its product suite on HP platforms and HP will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership.”

The actual Hurd agreement remains under seal, so we don’t know what it says. But this portion of the agreement, however it was worded, is the clause in the agreement that HP’s lawyers are arguing is a commitment by Oracle to continue to support its software on HP-UX/Itanium machines made by HP. Oracle is seeking a recission of the Hurd hiring agreement in its countersuit.

Incidentally, Oracle’s countersuit says that HP’s allegations in its lawsuit from June that Oracle is withholding support to current Itanium customers on current Oracle software is “utterly false” and that “Oracle is fully supporting the current (and many past) versions of its software on Itanium servers, by issuing bug-fixes per its standard policies.”

In the wake of Oracle’s countersuit, HP put out a lengthy statement of its own.

Interestingly, in the week before the Hurd hiring agreement was signed on September 20, HP says that Oracle’s general counsel wrote in an email that this provision was “an agreement to continue to work together as the companies have – with Oracle porting products to HP’s platform and HP supporting the ported products and the parties engaging in joint marketing opportunities – for the mutual benefit of customers.”

While much remains murky in this suit and countersuit, what seems clear at this point is that we are going to have a Bill Clinton verb definition moment like that during the ex-President’s impeachment. It will all depend on what the definition of the word “support” is.

Oracle will no doubt argue that it is continuing to support HP-UX and Itanium with current and prior releases of its database, middleware, and application software. HP will no doubt argue that what the clause meant was that Oracle would continue to port future releases to future Itanium chips and HP-UX releases.

HP continues to contend, and reiterated in its statement, that Oracle wants to move Itanium server customers to its own Sun systems and that the “tactics employed by Oracle in support of this purpose included pricing misconduct, withholding of benchmarking scores for HP servers run on Oracle software, and abusing customers on support issues.”

The HP-Oracle lawsuit is scheduled for trial on April 2, 2012, and will also probably have both sides arguing about how long a proper server chip roadmap needs to be so it is not at “end of life,” and what it means if HP is indeed paying Intel to keep the Itanium chip alive. It will be interesting to see what that is costing HP and how long that commitment term is for, if it turns out to be true.

Micron makes the case for phase-change memory performance in the post-NAND world. This is a direct competitor to HP’s vision for memristor memory.

Micron has demonstrated Phase-Change Memory (PCM), enabling an app to run around 50 times faster than it would on NOR memory.

PCM is a post-NAND and post-NOR contender in the non-volatile memory arena; it’s said to combine the speed and simple data access of DRAM and the non-volatility of NAND and NOR flash memory. It stores binary values by altering the physical state of a chalcogenide glass to be either poly-crystalline or amorphous. The state, which dictates the material’s electrical resistance, is changed by running current through the material.

PCM is one of several candidates posited to replace both NAND and NOR flash as these technologies run into read and write performance and endurance walls as the underlying process shrinks…

With HP stating that Memristor product could hit the market in 2013, targeting DRAM initially, the post-NAND and NOR stakes are hotting up and technology productisation is key. Micron is serving notice that its PCM efforts are continuing.

We also note that Micron has announced details of its 3D DRAM memory cube technology and it is going to competing against Memristor if its 3D cubes are ready in 2013. It also has irons in the spin-transfer torque-MRAM fire, as it is determined to be a force to be reckoned with in the post-NAND market.

A breakdown of the latest IDC and Gartner server numbers for the quarter. Two things of note - IBM continues its dominance of the UNIX space, growing its worldwide marketshare by 5% in the quarter; and stripped down “cookie-sheet” servers, modeled on the bare-bones servers that Google uses in their datacenters, are becoming a sizable part of the server business.

The cookie-sheet servers created by Google for its own use – recently commercialized by all the top-tier vendors in one form or another as hybrid rack-blade boxes – have become a sizeable and important part of the server business.

In the third quarter ended in September, the box counters at IDC reckon that end users snapped up 2.07 million machines from server makers and their channel partners, an increase of 8.7 per cent compared to the year-ago period. Revenues increased a more modest 4.2 per cent, to $12.74bn. The market is cooling a bit thanks to tough compares, and as fellow box counter Gartner pointed out earlier this week, shipment and revenue levels on a global basis have more or less recovered to the levels prevailing ahead of the server crash in the wake of the Great Recession three years ago.

Blade servers, which have been around for a little more than a decade, are in essence racks in miniature with integrated backplanes for linking servers to integrated switching and system management processors in the chassis, seemed poised to become a dominant server architecture based on the hockey-stick uptake of rack servers during the dot-com boom, but blades are a high-end product that is a tougher sell than many server-makers had expected. Still, blades are the best option for many customers, and at $2bn in sales for the quarter (16 per cent of revenues) and just under 280,000 units (13.5 per cent of machines sold) they are an important system option even if they have not knocked out rack servers, as many expected.

Blade servers are full of system management and resiliency features that most supercomputer and hyperscale cloud operators simple won’t pay for. That’s why over the past several years the cookie sheet server – which jams multiple server nodes into a rack chassis on metal trays – has become popular. These nodes are all about low-cost and ripping out any extraneous stuff in a blade box – such as service processors, integrated node management, and switching. The assumption with hyperscale servers is that compute and local storage are all that matter and the application environment itself will provide the resilience. And hence these hyperscale servers, as IDC calls them, have come into their own.

In some cases, such as those of Google and Amazon, the company is building all or some of their own hyperscale machines, and even while Facebook has designed its own servers, it still farms out the manufacturing and thus those servers get counted as commercial boxes in IDC’s numbers.

In the third quarter, the hyperscale server segment accounted for 118,888 shipments and $428.5m in revenues, which is an increase of 8.7 per cent in terms of sales and 4.3 per cent in terms of shipments. So hyperscale machines now account for 3.4 per cent of revenue and 5.7 per cent of shipments and have much lower average selling prices per node.

How much lower? If you do the math across the whole server market in the third quarter, the average server cost $6,149. There were a few thousand mainframes and high-end RISC/Itanium boxes in there to raise the class average, but x86 machines account for the lion’s share of shipments in any quarter these days. (All but about 70,000 machines in this case.) The average rack or tower server cost $6,163, and the average blade server cost $7,151. You can see now why blades have had limited appeal: they offer operational cost advantages, but you pay a premium for the hardware. The average hyperscale server cost a mere $3.604 according to IDC’s data, which shows you why you might want to build resiliency in your software stack instead of on any particular server node.

Dicing and slicing server sales

In addition to casing server sales by form factor, IDC takes a stab at estimating the shipments of servers based on the primary operating system that gets installed on the boxes as well as by price band. The System zEnterprise 196 mainframes announced a little more than a year ago gave Big Blue a big bump in sales, but that refresh cycle is starting to slow; the company only booked $970m in sales of mainframes in the third quarter, according to IDC. Windows server sales also cooled a bit, with revenues up 5.3 per cent to $6.3bn against shipment increases of only 2 per cent. That said, Windows-based machines are by far the dominant server platform in the world in terms of shipments.

Unix machines showed some life, with sales up 1.6 per cent to $2.6bn, thanks mainly to IBM pushing its AIX boxes like crazy. “IBM is really starting to dominate this market,” Jed Scaramella, research manager of enterprise servers at IDC, tells El Reg, adding that IBM accounted for 46 per cent of all Unix revenues in the third quarter and gaining five points of revenue market share.

Hewlett-Packard lost 5 points of share and Oracle lost 1.5 points, and they were in a statistical tie for second place in Unix system sales in the quarter. Linux systems saw a very nice 12.3 per cent revenue jump in Q3, to $2.3bn and now account for 18.6 per cent of total server revenues. If you want to be generous, you could say that the combined Unix and Linux markets – call it Unilinux – experienced a 6.4 per cent revenue bump to $4.9bn.

Various proprietary platforms from Unisys, Fujitsu, Bull, NEC, IBM, and HP (not including IBM System z mainframes) accounted for a mere $570m in sales, down 8.8 per cent over last year’s third quarter.

Server sales were not uniform around the world, as you might expect given the differences in regional economies and the state of IT infrastructure in different regions.

“After nearly two years of steady revenue growth, the server market began to decelerate in Q3 2011 as demand stabilized for many system categories,” explained Matt Eastwood, general manager of enterprise platforms at IDC, in a statement accompanying the server stats. “Asia/Pacific and Japan exhibited strong revenue growth while server demand in EMEA, North America, and Latin America was flat to slightly down year over year. IDC continues to believe that weakening macroeconomic conditions around the world will serve to further moderate demand for new servers in 2012.”

By segment, IDC calculates that volume servers (machines that cost under $25,000) had a 5 per cent increase in revenues as a group in the quarter. The high-end segment, which covers machines that cost more than $250,000, had a 1.1 per cent revenue bump (despite the System z decline and because of improving Unix system sales), and the midrange machines between these two bookends had a 4.7 per cent revenue increase as a group.

If you look at the server business by vendor, IBM and Hewlett-Packard were in a dead heat in Q3 as far as IDC can tell, with IBM and HP both getting $3.79bn in sales. (Technically, IDC believes Big Blue had $3m more in sales, but declares a tie when the difference between the vendors is less than one per cent.) IBM grew 3.5 per cent and HP dropped 3.8 per cent.

Dell was the number three server seller, with $1.93bn in sales, and grew at a pace that was nearly three times as fast as the market at large. Another way of saying that is this: If you take Dell out of the numbers, the other vendors only grew their sales by 2.7 per cent, so Dell accounted for two-thirds of the growth of the overall market. Oracle’s server sales declined by 3.2 per cent to $764m, and Fujitsu shrank four-tenths of a per cent to $605m. Other vendors – helped by supercomputer-makers Silicon Graphics and Cray as well as upstarts Lenovo and Cisco Systems – grew as a group by 22 per cent to $1.86bn.

HP has just announced the creation of a new hyperscale computing business unit. They are partnering with Calxeda to build an ecosystem around low-energy computing platforms composed of hundreds of ARM-based processing cores. These platforms will support emerging high-volume web and cloud workloads.

Emerging ARM server Calxeda has been hinting for some time that they had a significant partnership announcement in the works, and while we didn’t necessarily not believe them, we hear a lot of claims from startups telling us to “stay tuned” for something big. Sometimes they pan out, sometimes they simply go away. But this morning Calxeda surpassed our expectations by unveiling just one major systems partner – but it just happens to be Hewlett Packard, which dominates the WW market for x86 servers.

At its core (unintended but not bad pun), the HP Hyperscale business unit Project Moonshot and Calxeda’s server technology are about improving the efficiency of web and cloud workloads, and promises improvements in excess of 90% in power efficiency and similar improvements in physical density compared with current x86 solutions. As I noted in my first post on ARM servers and other documents, even if these estimates turn out to be exaggerated, there is still a generous window within which to do much, much, better than current technologies. And workloads (such as memcache, Hadoop, static web servers) will be selected for their fit to this new platform, so the workloads that run on these new platforms will potentially come close to the cases quoted by HP and Calxeda.

The Program And New HP Business Unit

Officially, the announcement was HP announcing their new hyperscale business unit, based on the premise that very high-volume data centers will continue to proliferate, driven by massive continued increases in demand for web and cloud-based applications handling massive amounts of data, and that the trajectory of current systems technology with respect to power, cooling and density may be inadequate for emerging requirements.

HP’s hyperscale initiative consists of three major components:

• Discovery centers – Facilities where potential partners and customers can experiment with HP’s new hyperscale products. These centers are a vital component of this initiative because for the most part the workloads are new to this new platform, and both potential users, HP, Calxeda and other partners have a lot of learning to do to about which applications really fit and how to tune them. In effect a learning lab for both customers and suppliers. In many ways the knowledge gained in these centers is more valuable in the early phases than any product revenues that flow from them.
• Partner ecosystem – The usual suspects, software and hardware partners needed to facilitate the success of the new business unit. While HP was clear in their statements that they will be looking at multiple technologies, the entire announcement is centered around Calxeda, who is simultaneously announcing their EnergyCore server architecture and their accompanying EnergyCard reference architecture. In addition to a number of cloud-centric partners, the initial partnership roster includes Cannonical (Ubuntu Linux), putting a fully functional Linux distribution in the plus column for the nascent ARM ecosystem.
• A product – The HP “Redstone” development system, based on the existing SL6500 system enclosure and Calxeda’s EnergyCore servers. The SL6500 is HP’s current dense rack offering for HPC and hyperscale web computing. Redstone swaps out the current x86 servers and substitutes modules with 18 Calxeda EnergyCard servers, cute little 10” x 3” cards that contain four complete SOC quad-core server nodes with integrated memory, management processor, scalable fabric and integrated switch and all network and SATA interfaces, with a  5W per server/20W per card maximum power draw. In total, each server tray packs 72 quad-core ARM servers in 1 RU equivalent of space. If you read my last post on Calxeda’s reference architecture, you can guess that the basic Calxeda architecture is indeed the core of the HP offering, but in keeping with Calxeda’s OEM business model, HP has added value around packaging, extending the SOC fabric topology & I/O, management and power/cooling technology, and will add further value as the line matures.

What Does It Mean

Reduced to its essence, this means that ARM servers are on the industry road map. Among the major effected constituents:

• System vendors - HP is clearly placing its bets on an emerging segment of the server market that cannot be met with current CPU x86 CPU technology and current server designs. As the dominant x86 server vendor, HP is making an intelligent bet, and is now well positioned, with a solid first-mover advantage over its competitors, to capture new opportunities among its existing customer base as well as to capture others who might have gone away and patronized a new ARM server startup in search of ultimate energy efficiency. We might suspect that ARM has had discussions with Dell and IBM. More news to come?
• Customers – Now have (or will have in 2012 when HP officially ships the Redstone) a viable alternative CPU architecture to deploy for appropriate workloads, and I expect a lot of demand for evaluation units and access to the discovery centers. The potential to improve throughput per watt by such huge factors is incentive enough to seriously evaluate the new alternative, and my recommendation is to take a look and see how it works with your own applications.
• Intel and AMD – How about a giant wakeup call? I seriously doubt that this has caught them totally by surprise – the studied silence and nonchalance over the past year with which they responded to any inquiries about the impact of ARM competition had me convinced that they were actually quite worried. But being concerned in the abstract and having your No. 1  customer endorse not only your competition but an entirely new architecture are two different things entirely. Will this destroy Intel and AMD as server vendors? The thought is absolute nonsense. Aside from the large number of workloads that will not particularly benefit from the ARM model, both will respond with further focused R&D to continue to improve their power efficiency, leveraging their strengths in software compatibility and in Intel’s case, their market dominance.

My Takeaway

Not that it was exactly boring before, but the server world just got a whole lot more interesting, and customers just got a major early Christmas present – a whole new technology platform for emerging high-volume web and cloud workloads. All in all a very positive event for the industry and for us, the eventual beneficiaries of this technology.