Servers

UNIX sprints, x86 slows

Although x86 unit shipments beat the one hundred thousand mark, growth was lacklustre. In contrast, the UNIX server market did quite well. By Akhtar Pasha

Two divergent trends marked the server mart in 2006. On the one hand, the x86 server market which had been growing at the rate of 40 percent during the past two years, slowed down considerably. At the same time, the UNIX server market took a quantum leap in terms of growth.

According to IDC, the x86 market grew by a mere 18 percent to 1,05,254 units in 2006 as opposed to 89,193 in 2005. In factory revenue terms, it grew by 16.9 percent to $333.19 million in 2006. Vaibhav Phadnis, director - Server Business Group, Microsoft Corporation India says, “The traditional spenders on x86 hardware namely the government and BFSI segments did not take the big volume decisions and stayed away from the x86 server market which is why we did not see x86 server growth as projected by the analysts. New [government] projects got delayed hitting shipping volumes. Some big purchase decisions by SMBs for x86 servers supported server shipments.”

Pallab Talukdar, director-Enterprise Business, Dell India says, “The CBS pressure for Total Branch Automation has reduced as most banks are computerised. Several government projects did not take off because of late decisions especially in the OND quarter of 2006, halting the growth of the x86 server market which has fallen sharply as reflected in IDC figures.” He adds that consolidation is putting the brakes on x86 shipments as is evident in the global market.

Viswanath Ramaswamy, country manager, eServers xSeries & Intellistations, IBM India says, “The x86 market did not grow as projected at the beginning of the year but nevertheless growth was buoyed by SMB buying. There was an upsurge towards the second half of 2006.” He adds, “SMBs were the prime catalyst for the overall growth of the x86 server market.”

Rajesh Dhar, country manager-ISS, Technology Solutions Group, HP India adds, “India has become the third largest market for servers after China and Japan. Within the x86 server market, the bulk of shipments were 2-way, which makes it the sweet spot in meeting 80 percent of a business’ workload requirements.”

R Ravi Chandran, Regional Marketing Manager, Server Platforms Group, Asia Pacific, Intel Technology Asia says, “The growth of x86 servers is a clear indication that customers do not want proprietary systems. Additionally customers want to deploy technology quickly to get a faster RoI and are relying on x86 servers to deliver the same.”

IBM leads the x86 market followed by HP. An important development has been the way Dell has ramped up its x86 numbers moving into the third spot after IBM and HP. It has won some key government projects for the first time—Indian Railways, IOCL. Among other wins Tata AIG, HDFC Standard Life Insurance, ICICI Prudential and UBI stand out. Talukdar says, “Dell’s growth has come from dollar billing on global contracts with MNCs but nevertheless we have been able to balance our dollar billing with rupee billing in recent quarters.”

Deepanshu Sharma, general manager-marketing, AMD Far East Ltd (India) says, “In the server space we are hitting numbers—business is coming from OEM purchases but for the first time we saw local system integrators selling white boxes. We have customers who have picked up Opteron servers from white box sellers. One of the key accounts that we won in 2006 was Raymond, which had never bought servers from us; but they have bought Opteron boxes to run their SAP ERP solution. Similarly we got orders from SBI for their Core Banking Solution.”

Linux is picking up on both x86 and non-x86 platforms. HPC, oil & gas and EDA, especially in clustered applications, are still driving the Linux server market but there has been traction in commercial application deployment. Says Ramaswamy, “IBM Linux clusters were bought by Western Geco and Western Geophysical. Holcim Ltd is using 16-way Linux clusters to run their core SAP ERP application. This is a slow beginning but soon we will see more commercial applications running on Linux servers.”

Dhar adds that, “The market saw some instances of Linux clusters being used to run commercial workloads. For example telcos are using Linux clusters to run their value-added services such as ringtone and content downloads. Although IBM leads the Linux server market, we have been able to capitalise on a number of smaller deals.” Most of the IBM Linux shipments have been to SMBs that have deployed ERP systems on the OS. Of the 50 customers IBM has for its Linux servers, 18 use it to run ERP systems.

Some bulk deployments of Linux blades took place. While IBM has led this market for the last two years, it faced stiff competition from HP. Dhar says, “We have pulled up our blade server ranking significantly in Q4 2006 with some key wins such as Jawaharlal Nehru Institute of Advanced Studies (JNIAS), IGI, TIFR—many of them are using blades as clusters of servers because of the x86 price-performance story.”

Intel saw plenty of server consolidation in the market but the actual benefit will come from virtualisation. “We expect mid-size businesses to consolidate their server resources using blade servers to reduce power and space utilisation and increase server efficiency,” says Chandran.

UNIX sales ramp up

The non-x86 UNIX market saw growth in factory revenue terms. For the first time in recent years, UNIX shipments grew by a substantial margin. In factory revenue terms the non-x86 UNIX market grew by 16 percent to $250 million in 2006. Sun was the winner here with 32 percent of the UNIX server market. IBM and HP were joint runner ups with 29.2 percent each.

Digging deeper, the non-x86 UNIX market at the high-end was worth $66.78 million in 2006. The high-end market is a deal specific one where a single deal of $1 million can tilt the scales to favour a vendor, HP leads with a 47 percent market share by factory revenues followed by IBM with 37 percent and Sun with 16 percent. Kamal Dutta, country business manager - Business Critical Servers, HP India says, “Of the 62 units, HP sold 25 with big ticket sales coming from telecom and the balance split between manufacturing and finance.” IBM and Sun were the other two vendors in the market share ranking.

The bulk of the non-x86 UNIX revenues came from mid-range systems which accounted for $135 million in 2006. IBM beat both Sun and HP in this category with a 41 percent market share. Sun has 32 percent and HP 26 percent. HP was at a disadvantage as it did not have a solid product in this range, but it has strengthened its position with the rx2660 server introduced at Rs 2 lakhs in February 2007. Dutta says, “The rx2660 is an Itanium-based server that is pre-installed. Customers just need to plug it in. Yet it offers mainframe class features such as high RAS. This product will help us bridge the gap.”

The volume segment accounted for $54 million in factory revenue in 2006. Sun accounted for almost half of this segment (49 percent) followed by IBM with 27 percent and HP with 25 percent. Dutta says, “The unit shipments in all three UNIX market segments has grown significantly indicating that the average selling price is dropping, which is driving SMBs to invest in entry-level UNIX servers. We see big momentum going forward.”

K P Unnikrishnan, marketing director, Sun Microsystems India says, “Our increase in server revenues primarily came from UltraSPARC IV+ and Galaxy Opteron-based servers.” As per market sources, Sun sold approximately 130 units of UltraSPARC IV+ TI systems. Meanwhile growth for Sun is coming from where it matters most, the mid-range UNIX market. According to market sources Sun’s big wins came from Reliance Retail, BSNL, VSNL, Infosys, Wipro and Oriental Insurance Company Ltd. Unnikrishnan also attributes Sun’s growth to bundling mySAP with its UNIX servers.

Commoditisation of the x86 continues

Unnikrishnan says, “Traditional UNIX customers continue to buy 2- and 4-way x86 servers from us and our growth is faster than that of overall market as we moved into new geographies and verticals.” This expansion allows Sun to access SMB customers previous untapped by it. “We have opened 12 sales and marketing offices in smaller cities—Coimbatore, Guwahati, Dehradun—these are predominantly x86 markets. We plan to add five more by June 2007. Businesses in North India who have not bought servers from us, will now find us in their vicinity. It will help us to grow our x86 server volume,” he adds.

Sun’s online sales thorough its tele-Web initiative is giving the company a sizable revenue boost. IDC does not track servers sold online by Sun. According to market sources Sun got some sizable x86 revenues from big ticket sales to Apollo Tyres, MTR, Reliance Retail, RPG Retail and the like. IBM also stretched its operations. Ramaswamy says, “There has been rapid buying from smaller cities. We have expanded our sales operations into smaller pockets such as Ahmadabad, Coimbatore, Kerala, Orissa, Bihar, which are primarily markets for x86. We opened 25 new IBM offices in 2006 and plan to expand our footprint into 14 new locations in 2007.” Talukdar adds that the maximum growth for the x86-market has come from 2-way rack servers and blade servers. Globally the volume market is 2-way and 92 percent of the x86 server shipments are of this configuration as it offers the best price-performance.

Consolidation and virtualisation go mainstream

The market saw many example of server consolidation and virtualisation in 2006 both on x86 and non-x86 server platforms. Ramaswamy says, “2006 belonged to consolidation and virtualisation and it was a big story in x86 as well as the non-x86 UNIX market. Cognizant Technology Solutions, Standard Chartered Bank, Honda CIEL and Maruti are examples of physical consolidation using IBM x86 servers. Aviva Life Insurance and BPCL are example of consolidation and virtualisation using VMware. BPCL consolidated 34 Microsoft servers to two x445 IBM servers.” HP says that many businesses are using 4-way servers to consolidate their server infrastructure. For instance, ICICI Bank has consolidated 600 discrete servers to simplify the maintenance of servers, licences and OSs.

Consolidation on UNIX will be a big trend in 2007. Hemanth K Kallikiri, deputy general manager, eServer pSeries, Enterprise Solutions, IBM Global Services India says, “2006 saw UNIX grow by leaps and bounds and it would be fair to attribute this high growth to consolidation and virtualisation.”

Consider this: Dr Reddy’s Laboratory had multiple instances of PA RISC, Xeon and Itanium servers inside its data centre, ten in all. Since SAP was withdrawing support on PA RISC it consolidated these ten servers to two p595 servers with 20 partitions each supporting 3,500 users worldwide. Similarly Madura Garments has consolidated its many small servers running mySAP on to two p570s. Federal Bank is using two p590s in five partitions to run its core banking system. Currently cash management and current account applications run on these UNIX machines. Kallikiri says, “Indian Overseas Bank (IOB) was using three UltraSPARC machines to service 1,200 branches through its CBS. The bank has consolidated this onto two p570 machines and 60 percent of the capacity is still untouched. One p570 server is supporting 600 branches of IOB.”

Talukdar says, “IT/ITeS companies have unique characteristics—they are adding headcount in thousands every quarter, which is putting pressure on system scalability to support new projects as well as on provisioning computer resources and hence they will drive the trend of server consolidation and virtualisation further in 2007.”

Performance per watt

The power consumed by a server over its lifetime is likely to cost as much as the server itself if energy costs continue to rise. This has led to the development of energy-efficient multi-core server processors that reduce the operational cost of a data centre.

Most significant is the number of businesses that are already using spot cooling techniques to deal with heat generated by rising equipment density. This is striking, given that server consolidation programs are gaining momentum and blade servers have only recently begun to ship in volumes—two trends that are likely to quickly and dramatically increase data centre equipment density. In general, heat and power management strategy and tactics are still in their infancy at most companies, with most of the focus on room-level systems. Decision-makers are not yet thoroughly versed in the granular power-consumption data that they’ll need as data centre heat continues to rise, and may be underutilising power-saving tools such as processor-level power management that are already widely available.

Companies are slightly less sanguine about heat management. For years, they’ve been intimately familiar with Moore’s Law, but they are now receiving an education in the First Law of Thermodynamics: energy can neither be created nor destroyed, so when you add energy to a system it has to go somewhere. Servers take in electrical power and convert a significant portion of it to heat.

Looking for solutions

The emphasis on heat management within data centres is shifting and companies are looking for solutions that extend beyond whole-room cooling. Solutions for heat management run the gamut from the tactical to the strategic. According to Daya Prakash, Manager, IT, LG (CNS Global), “Within the data centre, increasing power budgets for processors is one of the biggest problems.” He continues that for IT managers building centres with thousand of servers, the performance-per-watt criterion is critical. In the recent past, the numbers of servers is increasing every quarter be it for new applications, high availability or disaster recovery and business continuity. This has a direct impact on energy consumption per square foot in a data centre, and has a noticeable impact on a data centre’s TCO. The latest servers bought by LG have been chosen keeping energy efficiency in mind. This is why businesses are looking at multi-core processors for their data centres. Talukdar says, “Performance per watt has become an important parameter in the purchase decision for a server to reduce the overall cost of operations. Power and cooling have become important considerations.”

Analysts point out that data centre energy efficiency can be boosted by optimising cooling systems. Using energy-efficient servers is just another way to bring down the running cost of a data centre. A typical x86 server consumes between 30 and 40 percent of its maximum power when it’s idle, so running systems with light workloads wastes power. Thus, increasing the average utilisation of servers can yield significant benefits in overall operational efficiency.

Kallikiri says, “Power consumption hasn’t been a top of mind consideration in India but it is slowly becoming part of the discussion when administration or data centre costs are discussed.” Chandran adds, “There are many MNCs here who are expanding their head-count on a quarterly basis and their IT heads are seriously considering power consumption while deciding on what servers to buy. The power envelope will be a big factor in going for multi-core servers in 2007. Look at the kind of downloads happening from youtube.com. These folks are looking at multi-core to accelerate their business and are building powerful servers within their data centres to save on cost. We expect this trend to be big in 2007 in India.”

The approach to power problems is multi-core all the way.

Multi-core’s mainstream

There are different approaches to multi-core computing. One is Sun’s UltraSPARC T1 processor, which combines multiple small cores, multiple threads, and a lower-speed power-saving process to yield power efficiencies. The UltraSPARC T1 contains up to eight cores, and each core is capable of executing four threads. The processor can handle 32 threads simultaneously. Unnikrishnan says, “Memory latency is by far the worst problem, causing a typical server CPU to be idle for 75 percent of the time. The UltraSPARC T1 is the first microprocessor design to build four memory controllers, transferring data between memory and processing cores to ensure that it is transmitted into the chip as fast as it can be processed. The communication rack is also built directly into the chip, meaning that internal communication tasks have a shorter distance to travel across metal. This speeds up performance and reduces energy consumption, the latter because it reduces the amount of memory and processing latency that has been typical in most chip designs in the past.” According to Sun, the UltraSPARC T1 typically consumes 73 W of electrical power.

Sharma of AMD says, “We have recently showcased our native Quad core Opteron processor (code name Barcelona), which is based on a new power and thermal management technique. Our upcoming native Quad Core Opteron processors are designed for the same 68, 95 and 120 watt thermal envelopes.” The quad core Opteron is expected to ship from mid 2007.

Intel has shown solid progress on the quad core front. Chandran of Intel says, “We introduced our Quad-core Xeon processors in the 5300 Series and 3000 Series at mainstream prices without charging any premium in November 2006 and we have seen encouraging traction in the Indian market. The application licensing cost has been directly related to the number of processors. With multi-core we expect customers to embrace socket-based licensing that will reduce their TCO on servers to a large extent.” For example the 5300 Series offers 50 percent more processing power than the current generation of Xeon 5160 and uses the same power envelope of 80 Watts. He adds that dual-processor platforms based on the Quad-Core Intel Xeon processor 5300 series deliver 8-thread, 32- and 64-bit processing capabilities with 8 MB of L2 cache per processor, providing more computing power for threaded applications in a variety of deployments. The Quad-Core Intel Xeon processor 5300 series is targeted at the densest computing environments where performance per watt is everything.

IBM has the Power6, a 65-nm processor that operates at a clock speed of 4.2 GHz. Built around silicon-on-insulator; the Power6 is the successor to the company’s Power5 architecture. As with the Power4 and Power5 chips, buses between cache and main memory, and I/O interconnections to the outside world that the Power6 chip uses to get data, will scale up with clock speed. The Power6 chip is a dual-core processor.

There are other ways to cool servers. For example, HP has Thermal Imaging for data centres wherein hot or cold spots can be identified so that cooling can be planned. Additionally, it uses water-cooled racks and special-purpose fan technology that is cheaper than cooling an entire room.

2007: Consolidation and virtualisation

Dutta says, “In 2007 the landscape of the non-x86 UNIX market will change significantly. It is an exciting time for the high-end non-86 UNIX market. There are many infrastructure projects for data centres in the making such as Income Tax, Customs, BSNL’s Call Detail Record (CDR) based Customer Care and Convergent Billing System and several state-wide data centre set-ups. These are some of the big ticket deals that will further fuel the UNIX market. Look at the number of subscribers that telcos are adding every month. These big ticket deals will be in the high-end of the UNIX market as these companies are looking for RAS features and therefore I expect more server consolidation and virtualisation in the market place in 2007.”

There are many projects and e-governance projects and banking projects that did not start in 2006 because of delayed decisions. These are for x86 servers. So traditional spenders would be back on track for the x86 segment. Banks will network branches to automate their operations leading to increasing x86 server volumes. Additionally there are mid-sized and smaller co-operative banks that are looking at CBS which will push the demand for 4-way servers. We expect buying from PSUs and the government to increase significantly.