C&B Notes

The Building is the New Server

Former Microsoft Windows head Steven Sinofsky pointed us to this blog entry.  We do not totally agree with the conclusions for operating system makers, but the headwinds for PC manufacturers are unlikely to abate in the next few years.  Also, we like to rub our nose in opinions that are contrary to an investment thesis we hold.

The personal computer is dead.  As quickly as we moved from the desktop to the laptop, we are moving to the tablet — never to return.  With the death of the PC, an entire ecosystem dies with it.  The chipset is ARM based, rather than Intel.  The operating system is all iOS and Android, rather than Windows.  The applications are hosted cloud apps like Box, Google Apps, and Evernote rather than Sharepoint, Office and Outlook…

The new data center designs use only commodity “vanity free” components procured directly from the original design manufacturers (ODM) — the current incumbent’s suppliers.  For easy serviceability, components are velcro’d together versus mounted in a box.  All bells and whistles are stripped off and the hardware is purpose built for a specific application and therefore carefully tuned.  As computer utilization rates skyrocket from virtualization and parallel processing, the CPUs are running harder and hotter and therefore the new expense bottleneck is all about power and cooling…

The evolution of the modern hyper-scale datacenter reflects the hyper-scale needs of the applications that run on them.  Modern web 2.0 (and increasingly SaaS) applications need to handle thousands of user requests per second, processing terabytes of information in real-time across hundreds of customers.  They are by necessity massively parallel and work in concert to service a user request.  This is the modern equivalent of a giant supercomputer — except cobbled together from commodity server components and interconnect fabrics.  It’s a profound software and hardware architectural shift that is taking us from a world where datacenters consisted of small number of independent high performance branded servers to a brave new world where the giant, datacenter building is the server.