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State Of The

JULY 2014

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Enterprise
Data Center

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Our new survey shows growing demand, flat budgets,

and CIOs looking to cloud providers not to offload
services, but to steal ideas >>
By Greg Ferro

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State Of The Enterprise Data Center

Our new survey shows growing demand, flat budgets, and CIOs looking to cloud providers not
to offload services, but to steal ideas.
By Greg Ferro

or years, enterprise data centers

have been stagnant pools of fragile
technology with a tendency to fail
spectacularly and scale poorly. We
wasted vast amounts of money on
slow-moving, monolithic, capital-intensive
services. It took the explosive success of
the likes of Amazon, Google, Facebook, and
Salesforce.com to puncture the belief that
the data center status quo was the best we
could do. These providers threw out riskaverse ITIL principles, knocked down technology silos, and introduced fresh design
and operational principles. Instead of striving for stability, they embrace failure and
constant change.
These new approaches to purchasing and
operating infrastructure have been wildly
and publicly successful. We recently profiled

six companies that are taking innovative infrastructure ideas and running with them. Fidelity Investments new Nebraska facility uses
open source code and standardized Open
Compute hardware. Bank of America is sizing up software-defined infrastructure and
modular data centers, with highly standardized commodity hardware. Its only a matter
of time before smaller shops take note of
initiatives such as Facebooks Open Compute
Project. The social media giant demonstrated
how to lower data center costs by as much as
80% using low-cost hardware and radically
different design principles. Google too is driving efficiency and reducing power consumption, achieving power usage effectiveness of
1.1 compared with a typical enterprise PUE of
around 1.7. Theyve shown that even simple
changes can have a dramatic effect on the

bottom line. Consider that both Google and

Facebook run data centers at temperatures
of 90 degrees F, saving 60% in operating expenses on power for cooling and spending
much less capital on chiller and airflow units.
Trickle-Down Effect?
We see hints of data center strategy
changes in this years InformationWeek State
of the Data Center Survey, drawing on 217
respondents involved with data center management or decision-making at organizations with facilities that are 1,000 square feet
or larger. Data center teams are virtualizing
aggressively, focused on standardization,
have software-defined networking on their
radar screens, and are holding the line on
use of public cloud. Demand from the business for capacity is, as usual, rising faster
July 2014 2

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than spending, but that doesnt mean respondents are slavishly focused on bottomline cost. We asked which of 11 application
infrastructure priorities are among their top
concerns; while reliability and availability and
security and data protection are cited most
often, the percentage citing lowest upfront
cost among their top concerns plummeted
by half in just one year. Those citing lowest
operational cost for facilities and management dropped six points. Getting a good fit
for the business units or application owners
requirements gained six. CIOs are finally escaping a dreary focus on reducing costs and
are looking to improve services.
Money Vs. Demand
Fully 73% of respondents say that, compared with last year, demand for data center
resources will rise; 19% expect demand increases of more than 25%. Thats no surprise
the future of business is digital. But dont
assume this equates to rising budgets. On the
contrary: The percentage able to spend 30%
or more of the total IT budget on data center
facilities, hardware, and operations is down to
38% from 43% in 2013. That fits with the expected anemic growth of overall IT budgets.
For example, IDC lowered its prediction on

informationweek.com

Data Center Budget

Approximately what percentage of your total IT budget is spent on data center facilities, hardware (servers, storage,
networks), and operations?
2014

Less than 10%

2013

8%
8%

10% to 19%

18%

22%

20% to 29%

32%
31%

30% to 39%

40% to 49%

50% or more

22%
8%

24%

11%

8%
8%

Data: InformationWeek State of the Data Center Survey of 217 business technology professionals in June 2014 and 216 in April 2013

global IT spending for 2014, to around 4%.

This lack of investment in structural upgrades is a consistent theme in InformationWeek surveys. Our 2014 Data Center Convergence Survey, showed that demand for
convergence is high but lack of budget limits opportunities. Same deal in our State of
Storage and Private Cloud surveys this year,
where reducing capital costs is a key driver in

purchasing. Yet no money is no excuse when

it comes to the demands of business units.
IT continues to pursue virtualization to
meet these demands, as well discuss. But IT
is not blindly moving to a virtualize everything strategy; 35% of respondents choose
whatever infrastructure approach is best for
the application. Many application vendors,
amazingly, still do not certify or support
July 2014 3

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their products on hypervisors. Its an

open question how long IT will put up
with that state of affairs.
Tech Options Emerge
Comparing our 2014 data center survey
with data from the 2012 survey, we see a
significant downward trend in interest in

One trend on the upswing is

using big data to find and fix data
center problems before they slow
the business down.

converged platforms with unified server,

storage, and network stacks. These platforms burst on the scene in 2011 with a big
marketing barrage. Offered by incumbent
vendors for a premium price, they represent a trade-off: Purchase compute, storage, and network as single product, certified to interoperate and meet performance
guarantees. IT gets simplicity but at higher
cost, with less flexibility in sizing and product selection, and a high degree of lock-in.
CIOs are wary of that deal our survey
shows respondent interest in converged
informationweek.com

packages waning, slipping from 11% in

2012 to just 5% in 2014.
One trend on the upswing, and replete
with innovative new vendors, is using big
data to find and even proactively fix data
center operational problems before they
slow the business down. One interesting,
high-profile example from Google applied
analytics to power consumption data using machine-learning algorithms. The
large numbers of sensors already in its facilities enabled analysis of extremely large
data pools. From this, Google was able to
analyze PUE and improve air temperature
and power consumption. For most companies, big data analytics is more potential
than payoff in the data center, but the opportunity looks significant.
IT can use analytics to look at flow data
in two areas. The first is flow analysis and
path control at the data center edge, to
improve utilization of WAN bandwidth for
cost savings and improved user response
time. Companies such as Viptela, Glue
Networks, and Vello Systems are advancing this trend. The second use case looks
at flows within the data center core for
anomaly detection and security and application mapping. Plexxi Networks is unique
July 2014 4

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in offering analytics-driven and dynamic path

management in the data center. Security inside the data center for east-west traffic flows
is another new category, addressed by vendors
including Vectra Networks, Guardicore, and HP
Sentinel.
Storage analytics is another emerging market, with Virtual Instruments using big data
from the Fibre Channel network and Cloud
Physics extracting data directly from VMware
APIs to expose previously unknowable problems in the storage system.
Analytics has the potential to dramatically
change how enterprise data centers operate.
Its common to monitor myriad aspects of the
infrastructure, capture data, and chart key
stats on temperature, power consumption,
and network and server performance. But
charts, graphs, thresholds, and alerts are passive tools that rely on human interpretation to
extract value. Analytics-driven methods hold
promise for locating issues proactively and
intelligently using big data methods.
Impact Of Cloud
IT finally seems past the irrational exuberance stage when it comes to public cloud
infrastructure, and leaders are acknowledging
the enormous transformational challenges

informationweek.com

Demand For Data Center Resources

Compared with last year, do you expect demand for data center resources to increase, decrease, or remain the same?
2014

2013

Increase significantly; more than 25%

19%
19%

Increase somewhat

50%
Remain the same

21%

54%

27%

Decrease somewhat

4%
3%

Decrease significantly; more than 25%

2%
1%

Data: InformationWeek State of the Data Center Survey of 217 business technology professionals in June 2014 and 216 in April 2013

to embracing public cloud. Public cloud platforms are built at scale, and customization
simply isnt comparable with what IT can do
in an enterprise data center where hardware,
software, and operations are tailored to meet
the exact requirements of each service or application. The time and expense of transforming existing applications into cloud-ready
configurations often wipes out savings. In addition, many companies find that the cost of
hiring engineers with the skills to set up and
administer services in the public cloud fur-

ther eats into savings. Enterprise-class cloud

services are not set and forget, so its vital to
allocate resources to monitor and manage
costs in the cloud environment. This entirely
new skill set is difficult to find and sustain.
Companies we work with that successfully
adopt public cloud at scale often have unique
requirements, such as data center consolidation projects. And public cloud isnt necessarily a permanent destination for these
companies. In fact, its becoming a Silicon
Valley trend seen in the likes of Zynga and
July 2014 5

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2015 Maintenance Vs. Innovation Spending

Please estimate the percentage of your data center budget to be spent on maintenance vs. innovation in 2015.

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eight hours. This is often described as data

gravity, and for the foreseeable future it will
limit pure hybrid clouds where workloads
truly shuttle among data centers. Many of our
survey respondents hybrid clouds comprise
a few discrete services run with public cloud
providers and the others in a private cloud.

39%
61%

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Note: Mean average percentages

Data: InformationWeek 2014 State of the Data Center Survey of 217 business technology professionals, June 2014

MemSQL for maturing startups to move

onto private cloud to control costs.
When we asked respondents which three
of 16 trends will have the greatest impact
on data center operations in the coming 12
months, adoption of public cloud inched up
just two points from 2013, to 22% the exact same percentage as in 2012.
Theres more interest in hybrid and private
clouds. In our InformationWeek Hybrid Cloud
Survey, fielded in May, we asked about the
ratio of workloads spread across public and hyinformationweek.com

brid clouds. The results show uneven distribution 58% lean more toward private vs. 24%
public, with 18% maintaining a 50/50 balance.
The biggest limiter we see thwarting greater
hybrid cloud adoption? Bandwidth. If you
have a 10-Gbps Internet link across a city,
with 1% loss and 6 milliseconds of latency,
you can transfer 19 Mbps. At that rate, transferring a 10 GB file will take, best possible
case, approximately 70 minutes. Transferring
the same file from London to New York (10
Gbps bandwidth, zero congestion) could take

Trends To Watch In 2015

We asked which three trends will have the
greatest impact on respondents data center
operations in the coming 12 months (see
chart, left). Two items took significant jumps
in this years survey: storage growth, up eight
points, and 10-Gbps Ethernet, up five points.
Desktop virtualization also showed a fivepoint uptick; we covered the possibility of a
VDI resurgence in a recent issue.
Meanwhile, data center consolidation
dropped eight points, and convergence
ticked down four.
One item that stayed relatively flat: server
virtualization. That doesnt mean virtualization isnt important; throughout the survey
we see proof of the ongoing transition to
virtualized infrastructures. Our take is that
the tech is entrenched and seen as the norm,
while blade servers and converged systems
wane in popularity. Rack-mount servers are
July 2014 6

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simply better suited to Microsoft Hyper-V

and VMware ESX hypervisors.
Pervasive virtualization explains the rising popularity of 10-Gbps Ethernet. The
use of hypervisors increases utilization of
the interfaces connected to the network.
The migration from 1 Gbps to 10 Gbps
Ethernet started in 2004, when the first
standard was completed, and has been
really gathering pace since 2012, when
low-cost switching silicon arrived on the
market. Switch fabric chips from Broadcom
and Intel have dramatically reduced the
component costs and complexity of manufacturing Ethernet switches. In the near
future, Ethernet switches will look similar
to x86 servers, with most models using the
same CPU, memory, and switch fabrics. IT
should watch for steep price reductions
in 2015 and a focus on software features
that integrate with their chosen hypervisor
platform to support VM mobility.
Even more important than 10 Gbps
Ethernet is the concern over not having
enough storage capacity. But is this fear
overblown?
Our 2014 State of Storage Survey
showed demand increasing relatively
slowly, with 73% of survey respondents

indicating a growth rate of less than 25%.

But this is a complex issue; storage arrays are expensive to upgrade, and there
are extensive secondary and hidden costs
associated with backup, deduplication,
and archiving. Incumbent storage vendors
have been slow to react to changing technology, even as startups like Pure Storage
(valued around $3 billion in its latest financing round) and Nimble Storage prove
the viability of modern array technologies
using commodity hardware with modern software architectures. Meanwhile,
flash technology is evolving at breakneck
speed. Its being packaged into all-flash arrays, tiered SSD storage, and more.
Four Other Trends To Watch
Lets look at four other trends: scale out,
consolidation, SDN, and DevOps.
>> Scale-out: Once again, CIOs are
looking to cloud providers for inspiration,
particularly in the form of scale-out storage and servers using commodity hardware. We discuss the scale-out concept in
more depth in this years State of Storage
and State of Servers reports. The most
popular scale-out system is arguably Inktank Ceph (recently bought by Red Hat),
July 2014 7

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but Lustre, Gluster, and Google GFS also play

in this market. Scale-out storage is widely deployed in both public and private clouds, in
some of the largest data centers in the world.
It brings the advantages of commodity hardware to storage through the use of common
x86 servers, consumer HDD and SSD drives,
and software.
>> Data center consolidation: Last year,
data center consolidation was cited by 29%
in our survey as having the greatest impact
on data center operations. In 2014, that percentage dropped eight points, to 21%. The
brutal reality of data center migration and
consolidation is that IT must secure a large
capital budget to establish the project and accept that migrating applications and servers
is a multiyear affair. Consolidation simply isnt
practical without a major business commitment, and given that 34% of respondents cite
constrained budgets as a major issue in 2015,
most CIOs arent expending the political or
financial capital.
>> Software-defined networking: After
more than a decade of stagnation, where
networking innovation was defined as bigger switches with faster Ethernet ports, SDN
promises plenty of change. Public cloud providers publicly shamed network vendors and

Greatest Impact On Data Center Operations

Which of these trends will have the greatest impact on your data center operations in the coming 12 months?
2014

2013

10 Gbps or greater network technologies

32%
Storage growth

29%

37%

Energy efficiency and green requirements

7%
37%

10%

High-density computing hardware

7%
6%

Data center convergence

Constrained budget

6%

34%
32%

Server virtualization

31%
32%

Building a private cloud

26%
26%

Adopting public cloud services

21%

6%
5%

Rate of data center resource deployment

5%
3%
3%
3%

Server dynamic power ramp up and down

29%

Enabling desktop virtualization

13%

Moving or adding equipment to a managed colocation facility

Low-power chip architectures

22%
20%
Data center consolidation

10%

18%

1%
2%

Other

1%
1%

Quality of management and monitoring tools

12%
12%
Data: InformationWeek State of the Data Center Survey of 217 business technology professionals in June 2014 and 216 in April 2013

by forming a consortium called the Open Networking Foundation to force change.

Interest in SDN is beginning to show, with

17% of survey respondents using it in production and another 57% piloting, evaluating, or researching the technology. The
July 2014 8

informationweek.com

R7820714/19_Greatest Impact on Data Center Operations

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Is Your Organization Using Or Considering A Private Cloud?

2014

2013

Yes; its a high priority, and were there or well along the way

27%
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Yes; its a low priority, but were making some progress

15%

34%

17%

Yes, but we are just starting

18%

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Maybe; were still investigating

24%
21%
22%

Unlikely

7%

Subscribe

10%

No; we dont see the value

2%

3%

Data: InformationWeek State of the Data Center Survey of 217 business technology professionals in June 2014 and 216 in April 2013

conclusion: SDN is simply a matter of when.

IT is more than ready to shed the static, brittle, and fragile tree networks of the past 15
years. We discuss the why of SDN more in our
full report, but CIOs have plenty of options.
VMware NSX and Nuage Networks VSP have
been signing up customers. Cisco ACI has
been slower to emerge (its expected to ship
sometime in the second half of 2014). Due to
Ciscos market dominance, some shops are
informationweek.com

waiting to see whats on offer in ACI before

committing to SDN. The open source OpenDaylight (ODL) project has gained notable
support from companies including Brocade,
Hewlett-Packard, Extreme Networks, Ericsson, and Red Hat. ODL successfully shipped
its first release in May.
>> Emergence of DevOps: Perhaps the best
way to sum up the DevOps concept is the application of technology to solve the problems

of technology. In the context of the data center,

DevOps enables IT to use software to automate
and orchestrate day-to-day operations. Consider server provisioning, which often requires
dozens of manual steps, such as VLAN configuration or LUN management, done over and
over hopefully without an error that brings
down operations.
DevOps can use software to improve the
speed and accuracy of operations. Other forms
of DevOps have more radical outcomes, where
companies make the data center deployment
process part of the development project, including application installation as part of the
requirements. Using technology to solve the
problems of technology sounds obvious, yet
ITIL processes and controls have hamstrung IT
teams looking to do just that. ITIL was developed to control change and, for most companies, has become change prevention. DevOps,
in contrast, focuses on embracing change. The
result: faster and more accurate deployment
with limited human work, which means resources are now freed to tackle the big problems in the data center.
Key Takeaways
Not all CIOs are comfortable with leadingedge data center techs used by innovators
July 2014 9

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like Google and Facebook, but theyre wellaware that data centers are in a period of
transition.
Networking and storage are the top-ofmind issues, but for different reasons. Networking will be upgraded to 10 Gbps Ethernet to meet the needs of VMware ESX and
high-density hypervisors. For storage, the
key concern is to keep it simple and pile on
capacity at a reasonable cost. Capital-intensive buys like converged infrastructure systems, blade servers, storage arrays, and big
Ethernet network chassis will be unpopular
in the year ahead. Technologies and products that can scale in small increments will
be better received, good news for scale-out
storage with commodity hardware, ECMP
networking at top of rack, and new server
form factors.
Public cloud providers have proved that
these new ideas and technologies really work.
Server virtualization remains the biggest success story in the data center, with survey respondents continuing to extend their VMware deployments and boost utilization by
increasing VM-to-server density.
The combination of virtualization, SDN, and
scale-out storage can deliver substantial savings in operating costs through the simple

Long-Term Plans
What best describes your long-term plans for hardware to run new applications?
2014

2013

Well add servers and virtualize aggressively but likely wont have to build new facilities

56%
55%

Well add servers and likely have to build new facilities

15%

9%

Well use colocation facilities but run applications on our own hardware

11%

20%

Well use multitenant public cloud (IaaS) facilities

5%

8%

Well reuse or repurpose existing hardware

6%

8%

Well get out of the application hosting business wherever possible and rely on SaaS

4%
3%

Data: InformationWeek State of the Data Center Survey of 217 business technology professionals in June 2014 and 216 in April 2013

math of increasing utilization. In the early

2000s, overall data center utilization was less
than 5%. In 2010, it was 10% to 15%. In 2014,
the rough estimate is 25%.
IT is achieving more with less. The number
of server instances has doubled in the last
five years, but the number of physical servers,
Ethernet ports, and storage arrays is actually
decreasing.
Well be watching to see how low CIOs can

go while still meeting business demand. Judging by cloud providers, we still have far to go.
Greg Ferro has nearly 30 years of experience as an IT infrastructure engineer and has been focused on data networking for about 20. Write to us at iwletters@ubm.com.
Copyright 2014 UBM LLC. All rights reserved.

July 2014 10