For companies cutting IT costs, the cloud is the place to be

Story first appeared on USA Today -

Data storage shift helps companies' bottom line

Cloud computing is exploding and growing faster than a swirling funnel crossing the Oklahoma plains. The next generation of computing lowers information technology costs while increasing corporate profits at the same time. And what's not to like about that?

That one-two punch was revealed in a study obtained by USA TODAY conducted by England's Manchester Business School. The study, which was commissioned by San Antonio-based hosting company Rackspace, is expected to be released Wednesday.

The Manchester study indicates that cloud computing allows U.S. businesses to slash information technology costs by about 26%. What's more, 62% of those same American companies say that deploying in the cloud improved their bottom lines.

"The results are finally showing what we've known all along," says Rackspace Chief Technology Officer John Engates. "It's not just about moving workloads from your data center to our data center."

The rise of cloud computing has much bigger ramifications. It's a tectonic shift in how we work, live and play. iTunes is in the cloud. Ford's cars are connected to the cloud. Google's Gmail is based in the cloud. But those are largely consumer examples; now corporate computing is also shifting to the cloud.

"The move to the cloud can't happen fast enough for some companies," says Engates, who has been on the ground floor of the cloud computing movement.

Cloud computing has myriad definitions, but in the most general sense it means devices linked to data centers located just about anywhere over a combination of wireless and wired networks. There are "private clouds," where companies own and control the data centers, which are usually centrally located in lower-cost geographies. And then there are "public clouds," in which companies use computing power delivered from servers they don't own, which are usually shared with other corporate customers.

Big companies tend to use a combination of private and public clouds, reserving their high-security functions and digital record keeping for the data centers they control. But the growing acceptance of public clouds foreshadows a trend in which computing power will be delivered similarly to the way electricity is distributed by utility companies. In fact, tech geeks refer to the long-term public cloud concept as "utility computing."

We are a long way from when most companies no longer own servers, or operate so-called on-premise data centers, and rely solely on public clouds. There are a number of reasons, including security concerns, control and reliability. But the Manchester survey suggests that enterprise computer customers are embracing the shift enthusiastically.

In addition to the cost-efficiency of cloud computing, the study found that 68% of U.S. firms are plowing the cash they saved back into their businesses. They are using the cost savings to improve and expand product lines, services and other offerings. More than 60% of the companies surveyed say they are using the money to hire new employees, give raises and offer bonuses. Employment at the American companies surveyed increased 28%.

While existing companies are transitioning to cloud computing at their own pace, start-ups unsurprisingly are totally embracing the change -- especially software and social-media concerns and online retail outfits.

More than half of the start-ups surveyed said they wouldn't have been able to afford on-premise data centers at the time of their launch.

Of course, it is self-serving for a cloud-service provider to hire a study that supports its case, but the numbers are the numbers, and Manchester interviewed some 1,300 companies in both the U.S. and the United Kingdom.

Intel's general manager of cloud computing, Jason Waxman, isn't surprised by the findings. Server, storage and networking sales have been booming at the chip giant in recent years. Intel pegs the compounded growth rate for servers at about 25% to 30% a year based largely on expansion of private and public clouds.

"The more companies can save on computer infrastructure, the more they can spend on infrastructure," Waxman says. "All of these new opportunities represent a huge build-out."

Waxman thinks that public cloud providers, including Rackspace, Seattle-based Amazon.com (yes, that Amazon) and San Francisco-based GoGrid, could grow as much as 70% a year.

Gartner, the industry research consultant, predicts that the total public cloud market could swell to more than $206 billion in 2016, roughly double what it is now.

Says Intel's Waxman, "It's an astronomical opportunity."

Microsoft Bringing New Data Centers Online

Story from the Data Center Journal

The big data center players are seeing green. Green is the color to signify energy efficiency and also the revenues from the increased demand for services that rely on data center space. Microsoft like many other players in the internet services market has been increasing their data center square footage considerably in the past 10 years.

Recently Microsoft announced that they will be building new facilities that include one in Ireland and another in the Chicago, Illinois market. Both of these data center are now complete and will be going online in July.


These facilities represent the increased demand for services throughout the world such as e-mail, web pages, photos, videos, software and more.

According to Microsoft the Dublin, Ireland facility will go online July 1st and was constructed for 300,000 square feet for phase I. The facility was designed with energy efficient best practices that include usage of outside air for cooling.

The Chicago facility is scheduled to open on July 20th and is being designated as one of the world’s largest data centers at approximately 700,000 square feet. This facility utilizes Microsoft’s container unit which allows Microsoft to wheel in up to 2500 servers and have them connected within hours.

The two new facilities by Microsoft is a commitment to the growth of software as a service and the cloud. Like many other companies that are also interested in internet services there has been increased investment in data centers to accommodate the growth of this area.

Ice Ice Baby

Ice Energy to cool data centers
Story from C-net

Ice Energy said on Monday it has partnered with data center cooling company Data Aire to make a hybrid air conditioner that uses ice for efficient cooling.

The idea behind Ice Energy's Ice Bear air conditioner is to make ice in a storage tank during off-peak times to take advantage of lower rates. The machine uses the stored ice to make cool air during times of higher energy demand--and higher rates.

Ice Energy and Data Aire said they have tested a way to link the Ice Bear to Data Aire's cooling systems. The companies said that the combination is more efficient at cooling data centers than stand-alone systems and will cut peak electricity usage.

Ice Energy originally expected to make these refrigerator-size units for consumers, but has since focused on selling to commercial customers. California utilities PG&E, Southern California Edison, and Anaheim Public Utilities offer incentives for installation of the Ice Bear.

AMD Introduces New Server Chip For Data Centers

Story from Wall Street & Technology

Just in time for Earth Day, AMD is introducing its Opteron EE chip, intended for companies that have large, power-constrained data centers.

"The financial services customers we work with were among the major contributors of feedback that resulted in the development of this processor, especially New York City financial services customers who have limited power availability," Gina Longoria, senior product manager in the server and workstation division at AMD. "They really need to watch their power consumption, which makes power-efficient computing very important to them." She says many New York City customers are adding facilities staff as a part of their IT decision-making team because the need to stay within a power envelope has become so critical.

The quad-core Opteron EE chip draws an average of 40 watts of power. It runs at 2.1 and 2.3 GHz speeds and includes the virtualization and power management features of other Opteron chips, including Smart Fetch, Power Cap and CoolCore. Smart Fetch lets IT managers move data in inactive cores to L3 caches that draw less power. The Power Cap feature lets IT managers set limits on server processor power consumption based on known workload peaks and valleys.The CoolCore feature lets managers turn off the memory controller and L3 cache when they're not needed.

The new chip is capable of uniquely services colocation centers in many major U.S. markets, including:

Atlanta Colocation
Chicago Colocation
Los Angeles Colocation
New York Colocation

Independent consultant Neal Nelson says he recently ran a benchmark test pitting a server loaded with AMD Opteron HE processors against a server running Intel Xeon low-power chips. He says the AMD processors used 13 to 21 percent less power while delivering better throughput than Intel's. Presumably, the lower-wattage EE version of the Opteron would fare even better in such a test.

Longoria says all of AMD's OEM partners have expressed interest in this new processor. She expects the Opteron EE to used in custom solutions for large data centers.

Dell Beefs Up Its Data Center Business in a Big Way

New Software, Services Offerings Mark Effort to Match Rivals IBM and HP
Story from the Wall Street Journal
Dell Inc. on Wednesday is expected to become the latest technology giant to introduce new hardware and services in an intensifying battle to control corporate computer rooms.
Dell plans to announce new, more powerful server systems along with software from other companies to manage the vast flow of information that passes through corporate computing systems, people familiar with the matter said. It is also planning a new system for keeping track of data-center traffic, and it will offer services to assemble, monitor and manage those computers, they added

Dell has long sold what the industry calls "industry-standard" servers, machines that use microprocessor chips from Intel Corp. or Advanced Micro Devices Inc. and sell in high volumes. But the company is not a major software provider, unlike rivals International Business Machines Corp. and Hewlett-Packard Co., nor has it developed a services organization on the scale of those companies. The announcement follows a series of moves by rivals. Networking giant Cisco Systems Inc. last week said it will start making servers in an effort to broaden its penetration of data centers, and H-P has been increasing its investment in networking gear. The Wall Street Journal last week reported that IBM is in talks to buy server maker Sun Microsystems Inc., a move that would bolster IBM's

Roger Kay, an analyst with Endpoint Technologies, said Dell's broader attack on data centers represents the company's "first major pass" at moving from a provider of low-end servers to more complete data-center systems.
It's an important move for Dell, which ranks third in world-wide server revenue after IBM and H-P, according to market-research firm IDC. Competitors are angling to become one-stop providers of technology and services to data centers. In a report this week, UBS analyst Nikos Theodosopoulos wrote that the "battle for the data center" may lead to ongoing consolidation in the field.
Dell is two years into a corporate turnaround effort spearheaded by founder and Chief Executive Michael Dell, who returned to the company in 2007 after it lost the No. 1 position in world-wide personal-computer sales to H-P. Mr. Dell has tried to spark new growth by moving more deeply into consumer PCs and by increasing Dell's corporate offerings.
Dell has often considered expanding their service offerings relating to data centers and colocation in major markets across the United States. Currently, many Top Ranked Tier 1, Tier 2, and carrier-neutral colocation providers actually compete in the colocation sector, including these key markets:

Atlanta Colocation

Chicago Colocation

Los Angeles Colocation

Miami Colocation

Austin Colocation

New York City Colocation

Houston Colocation

Seattle Colocation

San Francisco Colocation

Denver Colocation

San Jose Colocation

Orlando Colocation

Combining hardware with software and services is key to expanding its offerings to big companies, said Endpoint's Mr. Kay. To help achieve that goal, Dell earlier this year gave its services chief, Steve Schuckenbrock, responsibility for corporate computing products as part of a larger reorganization plan. Mr. Schuckenbrock has spent nearly two years building up largely automated services like data-center monitoring.
In 2007, Dell spent $1.4 billion to buy EqualLogic, a maker of data-storage systems. Its new offerings will involve EqualLogic hardware, people familiar with the matter said, as well as software from Symantec Corp. and BMC Software Inc.
Asked to comment Tuesday, a Dell spokeswoman referred to an email that characterized Dell's coming announcement as a "new strategy and enterprise portfolio designed to free customers from the restraints of costly and proprietary business technology."

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Cisco's Data Center Love Fest

Originally Posted to The Wall Street Journal

A dozen or so tech executives did everything but sing Kumbaya as Cisco Systems unveiled its widely anticipated entry into the computer business.

The general outlines of the announcement were already pretty well known by this point: Cisco will offer “systems” that combine networking gear, servers and software. The goal is to make the data centers that run businesses and the Internet more efficient. At Monday’s event, in San Jose, Calif., Cisco christened the new approach “unified computing.”

The launch event–which was shy on details such as pricing of the products–was basically a love fest, moderated by John Chambers. Cisco’s CEO was joined via TelePresence, Cisco’s high-end video-conferencing system, by the chiefs of many of the tech companies who were involved in the project in one way or another. No one talked much about what the new Cisco system does. But they agreed about its impact.

A sample: “It’s going to change the game,” said Joe Tucci, CEO of storage maker EMC; “John, you’ve changed the game,” added Bob Beauchamp, CEO of software company BMC. Chambers bounced from CEO to CEO, who each contributed a few minutes of puffery.

Later, people talked about how chief information officers, the (mostly) men who control corporate tech budgets, would have to start thinking about their data center spending and indeed Cisco differently. And that, ultimately, is the point of today’s announcement. In the data center, one company owns the relationship with the buyer and everyone else just supplied parts. Right now, Cisco is a parts company–it sells the networking gear that people tack on to whatever else they buy.

The new system is intended to make Cisco the most important tech company in the data center, the strategic relationship that matters most to buyers, and the company that dictates what other equipment customers buy. In that regard, the event was a preview for what Cisco hopes happens in the wild.