By Guy Matthews
After a year of uncertainty and slow growth, the data centre sector is showing signs of recovery, if capital expenditure on servers is any guideline. So believes Baron Fung, Research Director with independent analyst firm Dell’Oro Group.
“Servers generally comprise more than half of data centre capital expenditure,” he notes. “Other areas include compute, storage, networking, power and cooling.”
Dell’Oro’s projections for server shipments in the run up to 2025 anticipate 6% compound growth, spread evenly across different buyer segments. Last year, according to Dell’Oro, the top four US cloud providers – that’s Amazon, Google, Microsoft and Facebook – accounted for more than a third of all global shipments of servers worldwide and look set to increase this share over time as they continue to consolidate infrastructure.
“Over time, we are expecting faster growth coming from the top Chinese cloud providers,” says Fung. “Cloud adoption in China is still behind the rest of the world. So there is a lot of upside potential. Plus the government in China is making a strong concerted effort to boost infrastructure spending in the long term.”
So what are the key indicators coming out of the world of enterprise that might have a bearing on the market? “Enterprises are likely to adopt multi-cloud deployment models, with mission critical workloads remaining on premise,” suggests Fung. “The pandemic was really disruptive to the industry and drove some enterprises to adopt a more nimble, flexible IT approach. We expect smaller enterprises to migrate to public cloud as their preferred IT strategy.”
Fung is not alone in believing edge activity to be key to future data centre growth: “Edge could be a driver in infrastructure spending in the long term,” he feels. “Then the question is which sets of customers will be investing in deploying these solutions. Will telecoms operators lead the way? Or will the cloud service providers expand their reach to the network edge? We are also anticipating bigger enterprises to deploy edge solutions over their own private networks.”
Fung expects data centre investment to follow accelerated computing trends: “We have seen a proliferation of specialized processors, such as GPUs, FPGAs and custom accelerators, built by the hyper scalers, with growing demands in AI and ML related applications,” he notes. “I believe we are still in the really early stages of transition to accelerated computing, and there’s a lot more room for growth. The industry really needs to come together and simultaneously innovate in CPU design and system architecture as it relates to memory, storage, interconnects, heat dissipation, networking and application development.”
Fung is also excited about another type of accelerated compute power in the form of the SmartNIC: “These are Ethernet adapters with an onboard programmable processor, such as the ARM chip or FPGA. Some of the major cloud service providers are deploying SmartNICs today, and we can see other cloud companies as well as enterprises and edge data centers potentially deploying Smart NICs in the future. We project as much as a quarter of the servers in 2025 to be equipped with this kind of device.”
To broaden the conversation on key developments in the data centre, Fung spoke to a selection of industry names, starting with Jonathan Seckler, Senior Director, ISG Solutions, Servers & Partners with Dell Technologies: “Over quite a few generations of server technology, the famous prediction of doubled CPU performance every 18 months is generally true,” he points out. “We have seen a real proliferation of additional cores, additional memory bandwidth and other technologies related to that. I think though that the real benefit to cloud providers, and to enterprises who are also investing in data centers, is the increase in automation capabilities. We’re seeing the need for a ‘lights out’ type data centre. I don’t think that’s going to go away.”
Seckler points to a research study from IDC showing the criticality of investing in new infrastructure: “We discovered that the total cost of ownership of a server that’s three years old is actually less than keeping that same infrastructure around for six years. The benefits and performance that you get from new architectures, the automation that you get from them, more than pay for themselves, over the course of a typical life cycle.”
Jacob Rapp is Director and Lead Technologist for the Networking & Security Office of the CTO with VMware. His experience is that it’s been a while since CPUs started outpacing network interfaces: “The processors themselves, even without SmartNICs on hand, are more than enough to handle all the networking and security virtualization techniques that we’re doing. I think when we look at SmartNICs, it gives us an opportunity to extend that into different environments. You have these high-performance databases that you want to not run any type of agent on because you’re very much focused on the performance of that platform. SmartNICs can air gap out a virtualization tier that we can develop on and distribute the networking security functions directly there as well.”
In an increasingly data-centric world, data centre operators need AI, intelligent workflows and a new generation of processing power, says Tony Bishop, Senior Vice President, Platform, Growth & Marketing with Digital Realty: “Accelerated computing is important because if you don’t have all your data in the right place and you don’t have all your applications exchanging with that data, you don’t have it networked right,” he says.
In another key trend, data centers are becoming more and more decentralized. Rapp of VMWare sees traditional perimeters dissolving: “I’ve talked to various different security teams, and they thought it was easier when there was a hard perimeter,” he notes. “But actually the perimeter hasn’t gone away, it’s just turned into hundreds of micro perimeters, which might be a user connected to a SaaS application, to a public cloud, to a private cloud data centre and so on. So there’s definitely a new edge.”
In this scenario, trust becomes vital, argues Doug Gourlay, Vice President/General Manager, Cloud Networking Software with Arista: “The location stops being relevant,” he says. “But then the business needs visibility that they can trust in. I’m a big fan of the whole Zero Trust thing. The idea of creating micro perimeters around an asset and shifting it as close to the user as possible greatly reduces the blast radius impact of change.”
Ultimately its all about supporting people, says Seckler of Dell Technologies: The process is there to enable the people,” he believes. “The hardware, the software, it’s all there to enable the people who are doing the innovating in these data centers. The data centre of the future is autonomous, it manages itself because we really don’t want people spending time on just keeping things running. The distributed idea, the edge is all about where people go to make innovation happen. We need to see a transition away from the idea of just being safe and more towards the idea of being agile so people can maintain the quality of the innovation that they’re doing. It’s not just about keeping the trains running on time.”