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Intel Confirms Decline of Server Giants
An anonymous reader writes "A Wired article discusses the relative decline of Dell, HP, and IBM in the server market over the past few years. Whereas those three companies once provided 75% of Intel's server chip revenue, those revenues are now split between the big three and five other companies as well. Google is fifth on the list. 'It's the big web players that are moving away from the HPs and the Dells, and most of these same companies offer large "cloud" services that let other businesses run their operations without purchasing servers in the first place. To be sure, as the market shifts, HP, Dell, and IBM are working to reinvent themselves. Dell, for instance, launched a new business unit dedicated to building custom gear for the big web players — Dell Data Center Services — and all these outfits are now offering their own cloud services. But the tide is against them.'"
If Google sold servers, HP and Dell would die overnight.
Just the "12volt-only" power supplies with built-in batteries with "12volt-only" motherboards makes them more reliable than anything out there.
HP and Dell either can't or won't license this from Google.
Obama's legacy: (N)othing (S)ecure (A)nywhere and (T)error (S)imulation (A)dministration
Back in the day (say, 2008 as in the article), if you wanted to buy a server, you'd buy one from the big three.
These days, especially with FB and Google leading the way on commodity hardware, it's a different story.
So what should you get for your first server. I.e., you're a small company. You've got a couple of laptops. You're outgrowing mutual Samba.
You maybe want a fileserver. Maybe it'll have a few NICs and a virtual machine on it (Xen?) will do double duty as a external webserver.
So, Core i3, i5, Xeon? Number of processor cores? Forget fast drives, and just buy a lot of memory? Rack? Or tower?
Lockable front (so people can't just come by and reset it)? Hotplug harddrives? (You don't go this if you go the Google build-your-own route.) Redundant hard drives and ECC memory? Or a couple different commodity-style servers + sharding/rsync?
Is a big 3 server worth it? Or search for your own server case + server power supply, etc.?
I'm not a lawyer, but I play one on the Internet. Blog
Why bother with branded parts made by an ODM when you can buy directly from the ODM?
My old workplace had (has, probably) a fairly beefy Sun server with a whole bunch of disks. They used it as a RAID-based storage server for a bunch of lab data. As they do on occasion, a hard disk would crap out. The server wouldn't take ordinary disks, though: it would only accept Western Digital disks with some Sun ID code baked into the firmware -- rather than simply being able to buy a few WD RAID-friendly disks ahead of time, we had to jump through Sun's hoops to get disks replaced under warranty. This usually was a multi-week process, during the array with the failed disk was running with a hot spare -- hardly ideal. That was the last time we bought Sun systems.
At some other point, we were planning on setting up a few more storage servers for backup data. Dell's price for a storage system, including firmware-locked drives, was about triple the cost of doing it ourselves with SuperMicro servers, MD-based software RAID, and RAID-friendly disks. We ended up buying two of the SuperMicro-based systems and putting them in different buildings for semi-offsite backup (the concern was if the server room caught fire, not if a meteor affected the whole city). The only extra step during the setup was putting the disks in their caddies: the Dell systems came with the disks pre-installed. That took about 5 minutes per server. Whoop-dee-doo.
The Dell servers restricted our (with firmware-locked disks) options and cost substantially more than doing it in-house. We'd be stupid to go with their products, as we'd be locked to that vendor for the life of the servers.
Sure, we had Dell Optiplex systems as the desktop workstations for researchers as they were inexpensive, reliable in the lab, and essentially identical (useful for restoring system images from one computer to another), but their server stuff is stupidly overpriced.
The SuperMicro servers were much more "open" in that they used pretty bog-standard parts and didn't have stupid anti-features like firmware locking.
At the beginning of August I got a quote from dell for 2 R710 servers and 4 R610 servers. Three weeks later I placed the order. The response? Sorry, we're not selling those any more. You have to buy the R720's instead and they're more expensive.
So, sorry Dell. I won't be considering you for the upgrades to the other 200 servers I manage after all. Pity because HP just pissed me off with the DL380p gen8 which can hold 16 drives but has no raid card which can use more than 8.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Let me get this right. Google, who builds all of their servers in-house, exclusively for their own use (not for resale), is the fifth largest buyer of Intel server chips in the world?
That sure paints a picture about the sheer size of Google's data center operations.
While yes, right now, the tide may be against the server manufacturers -- the cloud still requires them in large quantities to host those services. If it negatively impacts sales, it's only to the extent that efficiency is improved. (EG. Joe Businessman who once bought a server for his office of 10 employees skips it, in favor of cloud computing solutions. But it turns out his needs are small enough so they can share the load with 1-2 other small businesses like his, all on a single server in the cloud.)
In my opinion, Dell has the right idea -- changing the focus on who their customer is for their server products. Beyond that, what's really news here?
Going out on a bit more of a limb though? I'm really of the opinion that cloud services are over-hyped as the "in" thing for every business. Once companies migrate heavily to cloud hosted solutions and use them for a while, a fair number will conclude it's not really beneficial. Then you'll see a return to the business model of running in-house servers again. (Granted, those servers might be smaller, with lower power consumption than in the past. Little "microservers" handle many of the basic file and print sharing work companies used to relegate to full size rack mounted systems in the past.)
But my own experience with cloud migrations tells me that it's not so great, 9 times out of 10. For example, my boss has been using the Neat document management software for a while now to scan in all of his personal receipts and documents at home. Neat now offers "NeatCloud" so you can upload your whole database and then access your docs via an iPhone or iPad client, or even scan something new in by simply taking a picture of it. Sounds great, but in reality, he had nothing but problems with it. The initial upload tied up his PC for the better part of his weekend, only to report that some documents couldn't be converted or uploaded properly. He had close to 100 random pages of existing documents thrown in a new folder the software generated, to hold the problem ones. The only "fix" for this was to click to open a trouble ticket for EACH individual document that failed, so someone at Neat could examine it manually and correct whatever issue prevented their system from properly OCRing and uploading it. Clearly, that wasn't much of a solution! He tried, repeatedly, to get someone to remote control into his PC to do some sort of batch repair for him -- but after a couple promises to call back "the next day" to look at it, nobody ever did. Now, all Neat can tell him is they have another update patch coming out for the software in the next week, and to disable cloud uploads until that time.
Or take the recent migration a small office did from GoDaddy pop3/smtp email with Outlook to Google hosted mail. I usually help these guys with their computer issues but they thought they could tackle this migration on their own. Turns out, they wound up with a big mess of missing sub-folders of mail in Outlook on the owner's machine. After a lot of poking around, I discovered part of the problem was due to characters in the folder names that Google Apps didn't consider valid. When it hit one of those during the mail migration, it just skipped the whole mail folder upload with an error. (Did Google's migration wizard utility even warn about this in advance or offer to help rename the problem folders before continuing? Heck no!)
For that matter, take what you'd think is pretty basic functionality with cloud based data backup? I've run into multiple situation now where people used services like MozyPro for their backups, only to discover a full restore (when a drive crashed) was incredibly slow and kept aborting in the middle of the process, making the data restore essentially impossible. Mozy's solution? They're willing to burn a copy of the data onto optical disc and physically mail it back to you. So much for the whole cloud thing, huh?
Further proof that tablets and the Cloud(tm) are the paradigm shift into the new memesphere. Nobody needs big, bulky Iron from folks like IBM, HP, EMC, etc.
We'll do it all now on clustered iPads! With Retina Displays! Surfing the web is dead, now we're Hangliding in The Cloud(tm)!!!!
do() || do_not();
Do they confirm it? Nothing's actually dieing until Netcraft says so.
see, I told you that electronic data processing was a fad
-- Spencer Tracy, "The Desk Set", 1957
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Google's position on the list of Intel server-chip buyers makes it clear that the problem isn't for people server manufacturers (which Google, very much, is), its for server vendors. Sure, the cloud requires servers. But if the people selling cloud services are also building their own servers, that doesn't create a market for server vendors.
It may also depend on what kind of servers companies like Google want. Dell, HP and the like produce expensive servers with high-cost maintenance contracts, which look great to conventional business-executive types. Google, OTOH, probably is taking the techie approach of generic white-box servers with no support. They're installing their own OS image on it, and it's not going to be Windows or a commercial Unix, and with all Google's custom software they probably find vendor support all but useless. Ditto hardware support, the idea is to not worry too much about failures and just replace the box, and with generic hardware replacing failed parts is probably cheaper than the support contract would've been.
You've nailed the rest, though. When you depend on "The Cloud", you're depending on someone else to prioritize solving your problem. The problem is that the most effective solution for them is far from optimal for you, and you don't have enough leverage with them to change their priorities. At least when stuff is in-house the people responsible for it answer to you and you can, if needed, go down and rearrange their to-do list in person.
We have 2 in house built servers hosting 10 VMs. Waaay less hardware than if it was not virtualized and miles cheaper than the Dell servers we priced out.
Or small business could, you know, buy now-cheap servers and skip the whole monthly bill that comes with The Cloud (tm). Hosted email? Sure, but that's not "cloud"--it's been common for years. Backup? Properly done, OK, but the thought of paying per use on a business server is just creepy. Well, that, and you'll eventually get the Verizon Effect. Hosted servers will be cheap until people depend on them and then--price hikes and service reductions. It's the American Way (tm).
Is it really cheaper to build it yourself once you reach a certain size? We just added a few petabytes for storage and went with IBM. It was costing only a little more than ordering parts and doing it ourselves but it wouldn't have been as neat and efficient. That thing is tightly integrated, from the power supplies to the software.
To have something comparable, we would have had to hire a mechanical engineer and an electrical engineer on top of taking time from the people in house to work on the software side.
Of course, that all made me want to add another SAN at home. My own build came out cheaper than buying something pre-built but that's because off-the-shelf parts and software are sufficient for my own needs.
With Google and Amazon, they hired people to design this stuff but I don't see every bank, retail chain, or big companies creating their own solution.
Google provides low-level cloud services (IaaS in the form of Google Compute Engine, PaaS in the form of Google App Engine, RDBMS-in-the-cloud in the form of Google Cloud SQL, bucket-style storage in Google Cloud Storage) as well as higher-level services (all of Google's various apps build on their cloud infrastructure.)
So the Google-Amazon distinction drawn in the parenthetical is inaccurate.
Michael Dell can suck harder and deeper on Balmer's cock. It's worked in the past.
* Carthago Delenda Est *
Not a big impact to HP, IBM, Dell. They have since taken on IT Service Management, Service Desks, BPOS, among other sevriceng lines. More money in servicing then in hardware sales. Labor is cheap, profit margin large. Their shareholdetrs are happy.
I'd say this dude, http://en.wikipedia.org/wiki/Thomas_Sterling_(computing), killed them.
And everything to do with VMWare. No one is buying servers because they have no need to. When I can replace 400 physical boxes with a couple dozen ESX hosts why wouldn't I?
I guess another way you can look at it is Intel has innovated themselves out of a market. Multi-core procs have enabled the virtualization boom, but they didn't charge enough for them. At least the auto industry was smart about it - new cars last twice as long as cars from 15-20 years ago, and prices have gone up accordingly.
... where is all this going to sit when you build your new computer on your printer?
If Google's 5th on the list, I ran some dead reckoning crunches and figure they must be producing somewhere North of 300k servers annual run rate.
My data centers are all so small they'd be lost in the caverns of the likes of Google or FB, but in applications where ownership of the data is important; and this should apply to sovereign governments, most companies, and even most small businesses; availing oneself of an external data hosting or processing service is giving away the farm.
There are a variety of security concerns unique to the "cloud" environment that should worry anyone who has some liability or risk associated with unintended exposure of their data: from other users of the same physical hardware, from the typically faceless third party employees operating it, and from joining a collective target. A counter argument is that cloud vendors tend to be expert at security and are likely to have more resources to stay current and be vigilant than any single client of theirs, just as a law of scale. But, as DropBox's password fiasco proves, this assumption is not always true - or, perhaps more accurately, a statistical reduction in the likelihood of execution risk is not an elimination of that risk and the consequences of false assumptions can be severe when the failure is of a central repository.
One is safe in using a "cloud" service (such a fluffy marketing term for "third party hosted IT") for data that is intrinsically public, such as this forum or a Facebook post. For a company's HR database, not so much. For a government to have a "cloud computing strategy to lower costs" is very sad. The OP references a statistic that is driven in large part by Google and Facebook, services of such massive scale that vertical integration into the hardware makes sense. It is not intrinsically a refutation of owned and operated hardware. That these vertical integrations have grown to such scale as to rank as major hardware vendors in their own right is impressive, but not in and of itself a "tide" against enterprise hardware. That the vendors of enterprise hardware would seek to own a piece of the emerging market for low cost, low atomic reliability (mitigated by macro reliability) compute systems isn't an abdication of more proven product lines, rather a reasonable foray into new product lines.
The OP finds the data supportive of a popular meme: that cloud computing will replace enterprise computing. This may be true if Zuckerberg's "no privacy" jihad is extended to "no secrets" as well, but as long as companies and governments have secrets and people value privacy, there will be a market for owned and operated hardware since he that owns the hardware owns the data (and when you host your data with a third party, you implicitly trust every employee there). While it is in theory possible to secure remotely hosted data through encryption (and perhaps even to allow remote processing of fully encrypted data), the overhead of securing one's secrets against the third party's prying eyes (and those of their other customers) significantly undermines any touted (but generally unproven) cost savings of "cloud computing."