Bringing the Private Cloud to
the Data Center
Matt Eastwood
Group Vice President
Enterprise Platforms Research
September 2010
Copyright 2010 IDC.
IT in the Cloud is a Journey…
The Market Has Been
Cloud Washed…
What’s Next?
Enjoy the Ride
Copyright 2010 IDC.
Cloud Computing Defined
Cloud Computing – consumer and
business products, services and
solutions delivered in real-time over the
Internet including:
– Standard shared service (built for a market,
not a single customer)
– Solution-packaged (“turnkey” integrating
appropriate resources)
– Self-service
– Elastic scaling (dynamic and fine-grained)
– Service Metering (use-based pricing)
– Ubiquitous Network Access (accessible via
the Internet)
– Browser Based (standard UI technologies)
– Published API (common Internet APIs)
Copyright 2010 IDC.
Deployment Models
Public:
Open to a largely unrestricted
universe of potential users;
designed for a market, not a single
enterprise
Private:
Designed for, and access restricted
to, a single enterprise (or extended
enterprise); an internal shared
resource, not a commercial
offering; IT Org is the “vendor” of
the shared/std service to its users
Cloud Adoption:
Evolutionary vs. Revolutionary
Private
Cloud
Datacenter
ATraditional
Look Back
to 2005
Private IT
Dynamic IT
Dynamic
Cloud
Migration
Existing
‘Custom’
Copyright 2010 IDC.
Public
Cloud
PublicxSPs
xSPs
Cloud
Elastic
Scaling
New
New
‘Bursting’
Agenda
Market Trends
Attitudes Towards 'The Cloud'
Cloud and Convergence
Essential Guidance
Copyright 2010 IDC.
The “New Normal”
Shifting Business Goals Impact Technology Goals
Q. Prioritize the following business goals as they relate to your
organization by allocating 100 points among them.
100%
NC
+4
90%
80%
+3
70%
60%
+6
50%
Speed time to
market
Increase
market share
Improve
quality/
accuracy
Increase
revenue
40%
+3
30%
Increase
customer sat.
20%
-16
10%
Reduce costs
0%
Jan.
'07
Copyright 2010 IDC.
Oct.
'08
Sept. Jan.
'09
'10
Source: IDC Enterprise Platforms Surveys
 A more balanced view of
end-user business goals
is returning to market
 With virtualization, focus
has been on cutting
costs
 Customers are again
beginning to look for
additional business
benefits from IT
 Technology will clearly
play an important role in
future business
initiatives
Worldwide Server Market, 1996-2010
+8%
-30%
+23%
-27%
+$5.5B
-$20B
+$11B
-$17B
Revenue (%)
100%
14%
Other Servers
90%
‘97-’08
Change
45%
80%
31%
70%
Unix Servers
60%
50%
Other
-31 Pts
Unix
32%
40%
-1 Pts
30%
20%
x86 Servers
23%
10%
55%
+22 Pts
0%
'97
'98
'99
'00
'01
'02
'03
Source: IDC Quarterly Server Tracker, Q4 2009
Copyright 2010 IDC.
'04
'05
'06
x86
'07
'08
'09
'10
WW x86 Server Shipment Forecast:
x86 Servers Continue to Accelerating
YOY Shipment Growth
4Q Rolling Shipments
30%
9,000,000
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
8,000,000
20%
7,000,000
10%
6,000,000
0%
5,000,000
-10%
15%
100%
-20%
-30%
Q308 Q309
-1.7M
-21%
Q309 Q410
+1M Units
+16%
45%
4,000,000
3,000,000
2,000,000
Q409 YOY Growth
85%
4Q Rolling Shipments
-40%
1,000,000
0
Server Deployments are Increasing Rapidly on Refresh
Copyright 2010 IDC.
Source: IDC Quarterly Server Forecast. June 2010
The Technology Catalyst:
WW Growth 2009-2013
15
10
Efficiency
Complexity
Elastic Scaling
Off Premise
12.4x
8.4x
4.7x
5
1.3x
2.3x
2.5x
2.7x
0
Servers
(M)
Copyright 2010 IDC.
Blades
(M)
Cores
(M)
VMs
(M)
Data Transactions
(TBs)
10G
Ports
Server Installed Base:
The Evolution From Physical to Virtual
’09-’13
CAGR
Servers
100,000,000
75,000,000
50,000,000
WW Virtual
Server IB
31.5%
25,000,000
WW Server IB
0.6%
WW Server Shipments
6.5%
0
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Virtualization Leaves its Mark and Primes the Market for Change
Copyright 2010Source:
IDC.
IDC Server Virtualization 2009
Virtualization is the Foundational
Platform for the Datacenter
• More than half of all
workloads (51%) will be
virtualized by the end of
2010
• Two-thirds (69%) by 2013
• Only 12.8% of all physical
servers are virtualized in
2009
WW Installed Workloads Virtualized
75%
50%
25%
• VM densities continue to
rise predictably
• Averaging 6 VM’s per
physical server in 2009
and 8.5 in 2013
Copyright 2010 IDC.
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
2.1%
12.8%
22.3%
Servers
Servers
Servers
WW Server Virtualization Shipment Forecast,
2005-2013
1.4M VMs
15M VMs
VM Cross Over
8.2
7.7
7.1
3.0
2005
3.3
4.2
2006
2007
5%
Shipments
Copyright 2010 IDC.
5.3
2008
6.1
2009
2010 2011 2012
2013
21.6%
Shipments
New Economic Model for the Datacenter
Shifts to Automation Tools are a Requirement
WW Spending on Servers, Power and Cooling, and
Management/Administration
56 million virtual
machines by
2012
Virtualization
Management
Gap
Copyright 2010 IDC.
Virtualization is Foundation for Cloud
Consolidate
Virtualize
Automate Provision
Cloud
10%
20%
Self
Provision
90%
Metering &
Chargeback
Metering &
Chargeback
Mobility
Mobility
Mobility
Hypervisor
Hypervisor
Hypervisor
Hypervisor
45% Sites
18% Market
90% of Virt.
Sites
20% of Virt.
Sites
10% of Virt.
Sites
18%
Copyright 2010 IDC.
Cloud
Internal vs. External
Source: IDC Server Virtualization 2009
IT Optimization by the Numbers:
Houston We Have a Problem
Q. What were the top three areas of savings? (N=400)
% of Responses
% of Annual Spend
50%
40%
-15%
-5%
-9%
-8%
+20%
+17%
30%
20%
10%
0%
RE
Copyright 2010 IDC.
Server
System
Staff
HW
SW
Costs Drop 25% but 80/20 Rule Still Applies
Support
P&C
Source: IDC Server Virtualization 2009
Who’s Embracing the Cloud
Q. Rate utilization of public cloud over next 3 years (1-10 Scale)?
Total
 Cloud is divisive concept
with SMB and mature
virtualization site favoring
<500 Employees
500-4,999
5,000+
 SMB’s consuming SaaS
applications
 Startups and enterprises
with large scale Web
infrastructures
<15%
15-<50%
>50% Virtualized
 Enterprise developers
with one-off projects
3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75
Copyright 2010 IDC.
 Compute intensive tasks
Source: IDC Enterprise Platforms Survey, Jan 2010 (N=255)
Workloads in the Cloud
Q. Which applications will you run in Cloud in 3 years:
Bus. Processing
18%
DSS
16%
VOIP
13%
IT Infra
14%
App. Dev.
8%
Tech.
31%
Collaboration
41%
email
21%
Web Infra
0%
Copyright 2010 IDC.
25%
Agnostic
Private
32%
50%
 Workloads remain
the critical pivot point
in the datacenter
 Virtualization is hot
and it impacts cloud
adoption profiles
 Users with high rates
of business change
favor cloud models
75%
Source: IDC Enterprise Platforms Survey, Jan 2010 (N=255)
Server Workloads Topology
18 Workloads in 7 Workload Categories
Business Processing
Business
Processing
Web Infrastructure
Infrastructure
 ERP
 Streaming Media
 CRM
 Web Serving
 OLTP
 Batch
Collaborative
Collaborative
 E-Mail
 Workgroup
Decision Support
Decision
Support
 Data Warehousing/Mart
 Data Analysis/Mining
Copyright 2010 IDC.
App. Development
Development
App.
Infrastructure
IT Infrastructure
 File & Print
 Networking
 Proxy/Caching
 Security
 Systems Management
TechnicalR&D
Industrial
Source: IDC Server Workloads 2009
Three layers of cloud computing
Workloads
email
ERP
CRM
OLTP
Collaborative
IT Cloud Services
Cloud Applications
Software as a Service (SaaS)
Decision Support
App.
Dev.
Caching
Web
Platform as a Service (PaaS)
Streaming
Security
Networking
Technical
Cloud Platform
File
Sys Mgmt
Cloud Infrastructure
Infrastructure Services (IaaS)
Server
Copyright 2010 IDC.
Storage
Network
Platforms
Actual Mileage May Vary:
Migration Starting Point
Data Analysis
$16 Billion
$44.9
email
Data Mining
Streaming
Web
App.
Dev.
Collaborative
39%
41%
$14.0B
$17.6B
PaaS
SaaS
ERP
CRM
OLTP
22%
Technical
Caching
Security
Networking
Copyright 2010 IDC.
$13.3B
IaaS
Sys Mgmt
File Serving
Source: IDC Server Virtualization 2009
Cloud Implementation Help
Q. Who will help build out your private cloud?
 Larger companies and
leaders favor internal
IT
Internal IT Department
Virtualization Vendor
Server Vendor
 Smaller orgs and
laggards favor server
vendors
Networking Vendor
Systems Integrator
Storage Vendor
 Virtualization vendors
are broadly favored
ISV
Systems Management
Outsourcer
Local VAR
0%
Copyright 2010 IDC.
20%
40%
60%
80%
 Those planning
private clouds are
most likely to favor
Internal IT
Source: IDC Enterprise Platforms Survey, Jan 2010 (N=255)
Cloud Leadership
 Comparing mature and
understood (virt) with
unknown (cloud)
 The evolution to private
cloud will be led by
traditional IT
 Traditional IT suppliers lag
in Public cloud
 Larger orgs name IBM
 SMB favors Google,
Amazon and Salesforce
Copyright 2010 IDC.
Q. Who is the leading vendor?
100%
Don't Know
Other
Salesforce.com
75%
Amazon
50%
Google
50%
Cisco
45%
25%
55%
Microsoft
HP
IBM
VMWare
0%
Virt
Private Public
Source: IDC Enterprise Platforms Survey, Jan 2010 (N=255)
Attitudes Towards Convergence
Q. Most appeal w/ convergence?
3.6
3.3
3.9
100%
Don't Know
Other
• The sever will be the focal
point for IT convergence
75%
FCoE
• Larger companies, leaders
and leading virtualization
adopters favor most
Storage &
Networking
50%
Server &
Network
25%
Server &
Storage
Virtualization
& Automation
0%
Total
(N=255)
Copyright 2010 IDC.
Laggards
(N=131)
Leaders
(N=124)
• End-users rate likelihood of
converged adoption at 3.6
of a 10 scale
• Service providers more
likely to favor network led
convergence
Source: IDC Enterprise Platforms Survey, Jan 2010 (N=255)
New Business Cycle for IT
Business Value
Convergence Reigns for the next 10 years
Transactional
applications
and Database
ERP, Analytics
and Datamarts
Converged
Infrastructure
& Private
Clouds
Web
Collaborative
Application
Development
Public
Clouds
1985
Copyright 2010 IDC.
1990
1995
2000
2005
2010
2015
File/Print and
Networking
Intersection Technology Offerings
Traditional IT
Outsourcing
Hosting
Public Cloud
Private Cloud
Traditional Servers
Converged Infrastructure
Homogeneous
HeterogeneousInfrastructure:
Infrastructure:
multi-node
computing
designresource
including
Server, storage
and network
processor,
memory,
network,
pools assigned
as needed
to storage,
business
P&C
in a single chassis
services
Copyright 2010 IDC.
Micro Servers
Market Segments Continue to Shift:
Understanding the Impact of Cloud
Units
% Server Spend
100%
75%
50%
PrivateCloud
Cloud
 Private
– Bladed and Virtualized
– Consolidation Play
81% 70%
– Existing Workloads
93%
PublicCloud
Cloud
 Public
– Homogeneous
17% 20%
– Dense/Low Cost
2% 10%
– New Workloads
25%
0%
6%
1%
2009
2010
Copyright 2010 IDC.
TraditionalIT
IT
 Traditional
– Heterogeneous
– Legacy & Proprietary
2011
2012
2013
2014
Cloud and Convergence, 2013
The Whole is Smaller than the Parts
2013 Mkt
CAGR (10-13 )
Not $144B
But $123B
Not 3.2%
But -2.0%
Security
Networking
Equipment
Storage
Systems
$62 Billion
$32 Billion
Streaming
eMail
Web
$11B
Caching
Server
Hardware
File&Print
Networking
$50 Billion
Workgroup
Copyright 2010 IDC.
$10B
Cloud and Convergence, 2013
A View of a Bifurcating Server Market
$52B: Bifurcation
Small
Site
19%
Scale-out
9%
Datacenter
34%
Copyright 2010 IDC.
Non x86
38%
An Alternative View (or is it)
Workload Optimization
$52B: Optimization
OLTP/DB
15%
BA
12%
BI
12%
Infrastructure
61%
Copyright 2010 IDC.
Essential Guidance
 CIOs pay attention to time, money and
people
 Downturns drive inflections and change
on recovery
 Workloads are the critical pivot point for
cloud and convergence decisions
 Many political barriers remain in the DC
 User demographics change constantly
Copyright 2010 IDC.
Questions
Matt Eastwood
meastwood@idc.com
Twitter: matteastwood
+1 (508) 935-4503
Copyright 2010 IDC.