collective unconscious of the smarter planet

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.

Oracle has modified Red Hat Enterprise Linux to create their own homegrown version of Linux which is tweaked to work more efficiently with Oracle iron.

Oracle Linux is compatible with Red Hat Enterprise Linux, or RHEL, which is the commercial grade version of that company’s Linux operating system. At last year’s OpenWorld, Oracle co-founder and CEO Larry Ellison announced that not only would Oracle be offering a clone of RHEL and offering support services for it, but that it would create its own kernel. This was necessary for Oracle to be able to fix bugs quickly and to provide features tuned to its specific systems, such as the Exadata database servers, the Exalogic application servers, and at this year’s OpenWorld, the Exalytics in-memory BI appliances.

Oracle pulled even with Red Hat with Oracle Linux Release 6 Update 1, delivered in June of this year for 32-bit and 64-bit x86 servers. In that release, Oracle tweaked the Linux 2.6.32 kernel and also supplied Red Hat’s variant of the kernel used in its own RHEL 6.1…

In his Linux pitch, Screven made it clear yesterday that Oracle had no truck with RHEL. “We don’t have Red Hat Linux inside of Oracle,” Screven said, adding that Oracle’s Linux was used in development as well as in production inside the company. And he made it clear that Oracle never recommends real RHEL, or any other Linux, for supporting its software. Oracle does not test its software for compatibility with any other Linux.

Using the first Oracle homegrown kernel, Oracle Linux has been benchmarked running 75 per cent faster than its Red Hat compatible kernel on certain (and unspecified) workloads, and Screven said that Oracle’s Unbreakable Enterprise Kernel was designed to span up to 4,096 cores and 2TB of memory. (Those are the same limits inside of RHEL 6, by the way.)

Small wonder, then, that this time last year, Oracle had 5,000 customers using its own Oracle Linux variant, and Screven said in a keynote yesterday that the company now has 8,000 customers shelling out bucks to Big Red for Linux support. That number will only grow faster as Oracle sells more “engineered systems” with Oracle Linux embedded within them.

Screven did not offer much detail on what is coming in the next rev of the Unbreakable Enterprise Kernel, which is in beta testing now, according to an Oracle spokesperson.

The Linux container virtual private server feature is interesting, and it is worth considering if Oracle has learned how to do this well given its experience with Solaris containers, which are analogous. The inclusion of a virtual switch for virtual machines is also interesting in that you expect that to be in the hypervisor – that is where VMware, Cisco Systems, and Citrix Systems are putting them. The addition to DTrace dynamic tracing to Linux will also be welcomed, particularly by Oracle shops that want the same visibility into their systems software as it runs whether they choose Solaris or Linux for a particular workload.

Oracle would not say when this second release of its homegrown kernel would be ready for primetime.

Screven also announced that KSplice hot Linux patching was available with a Linux Premier Support contract. Oracle bought KSplice, which had created the hot splicing technique and which was trying to commercialize the technology, for an undisclosed sum back in July.

It’s not super surprising, but Canonical is developing a Ubuntu variant for ARM-based microservers. SeaMicro and Calxeda are still waiting to take off, but the industry is beginning to place bets that microservers are going to take off.

Canonical is suiting up for the coming microserver wars, confirming that Ubuntu Server 11.10 will run on ARM chips.

Just under three years ago when ARM-based netbooks were taking the PC market by storm and iPad tablets were just a gleam in Steve Job’s eye, Canonical, the commercial sponsor of the Ubuntu Linux distro, made ARM processors full peers with x64 processors running its Ubuntu Desktop variant. And now, perhaps at the dawn of an ARM-based server era that will see the x64 architecture get some tough competition for the first time in a decade, Canonical is getting out on the bleeding edge by supporting Ubuntu Server on ARM-based servers.

Chris Kenyon, vice president of OEM services at Canonical, has confirmed in a blog post that the upcoming “Oneiric Ocelot” Ubuntu 11.10 due in October would include a server variant that would boot on ARM-based machines. ARM support will not be an afterthought, but come out simultaneously for machines as well as x86 and x64 servers and support server-class chipsets and peripherals…

The initial focus for Ubuntu Server will be on microservers, a broad category of machines that offer better performance per watt than standard or even low-volt Xeon and Opteron parts can deliver running distributed server workloads.

“We are very excited about this area,” says Kenyon in a video snippet on the blog. “We are convinced that we will see ARM and frankly x86 processors in here. There’s some really interesting collaboration between SeaMicro and Intel going on here and between Calxeda and ARM. And we are already seeing some big Wen 2.0 properties experiment with this type of computing. It’s a very interesting area and one that we see Ubuntu Server being a part of.”

Hopefully, for the sake of competition, the ARM-based server racket will do better than netbooks over the long haul. The tablet and cheap PCs came along just in time to make them irrelevant.

Microservers will probably be a niche market, accounting for around 10 per cent of shipments, according to Intel. But given that hyperscale data centers will be buying scads of these small, power-efficient, multicore and often multi-node machines, Intel is not about to cede this market to ARM and if fighting back with low-powered Xeons aimed at single-socket nodes and low-powered Atoms with server features like ECC memory and virtualization support.

Intel’s market to lose

Calxeda, which has been cooking up its own quad-core ARM processors and a fabric interconnect for server nodes, says it can cram 120 server nodes into a 2U rack-mounted chassis. The Calxeda machines will be based on the 32-bit Cotrex-A9 processor design from ARM Holdings, and it will have a DDR3 memory controller with ECC scrubbing added to them.

The company says it can deliver a server node consisting of a quad-core chip with the memory controller and the interconnect electronics plus one 4GB memory stick for under 5 watts of juice consumed.

Calxeda is not planning on making servers, but selling the chips to server makers. And it looks like Ubuntu Server will be one of the first – if not the first – operating systems running on the box when it ships next year. Calxeda is planning to ship chip samples and reference servers to partners before the end of the year.

Whitebox server maker ZT Systems, like Calxeda, couldn’t wait for the Cortex-A15 design to settle down and last November launched an ARM server packing eight STMicroelectronics’ Spear1310 processor nodes into a 1U rack-mounted chassis.

SeaMicro has a microserver called the SM1000-64HD that currently jam 384 of Intel’s Atom N570 processors and a proprietary load balancer and torus interconnect into 10U chassis. The company is currently enthusiastic about the Atom roadmap, but has made it clear since it came out of stealth mode last June that it was not married to any particular processor. Expect an ARM-based version at some point if the performance per watt of the Atom chip doesn’t keep pace.

While Microsoft has said that it is porting Windows 8 to the ARM architecture, thus far it has not agreed to port Windows Server and its related systems programs – SQL Server, Exchange Server, and so on – to ARM chips. And unless Microsoft thinks it will lose money by not doing such a port, it is unlikely that Microsoft will put a lot of work in.

At this point, the move toward microservers from plain-vanilla two-socket rack servers could end up being a Linux-only phenomenon, given the hyperscale data center operators that are most interested in these tiny machines.