Clouds in Emerging MarketsClouds in Emerging Markets

Naresh K. Sehgal, PhD, MBANaresh K. Sehgal, PhD, MBALead SW ArchitectLead SW Architect

Enterprise Platforms and Services DivisionEnterprise Platforms and Services DivisionIntel Corp, BangaloreIntel Corp, Bangalore

22

ContextContext

IT Managers want more Efficiency andIT Managers want more Efficiency andCustomers need a higher value to restart spending…Customers need a higher value to restart spending…

•• Dark clouds are gathering on the horizonDark clouds are gathering on the horizon–– World’s economies are slowing downWorld’s economies are slowing down

•• Signs of layoffs, delayed investments, recession…Signs of layoffs, delayed investments, recession…

–– Future seems uncertainFuture seems uncertain•• IDC server stats from Q3’08IDC server stats from Q3’08

–– Server revenue down by 5.2 percent YOY at $12.6 billionServer revenue down by 5.2 percent YOY at $12.6 billion–– Server unit shipment growth up 2.8 percent YOYServer unit shipment growth up 2.8 percent YOY

•• Customers are demanding more computing/$Customers are demanding more computing/$•• Products and services we’ve going in will not get us out ofProducts and services we’ve going in will not get us out of •• New Solutions are needed!!New Solutions are needed!!

33

Profile of Intel Architecture (IA)Profile of Intel Architecture (IA)Server CustomersServer Customers

•• Buys 1Buys 1--10X Servers10X Servers

•• Lacks dedicatedLacks dedicatedonon--site IT supportsite IT support

•• Wants lowWants low--costcostsolutionssolutions

•• Needs lightNeeds light--weight toolsweight tools

SMBs Enterprises Internet PortalData-Centers

•• Buys 100Buys 100--1000X1000XServersServers

•• Has dedicated onHas dedicated on--site IT supportsite IT support

•• NeedsNeedscomprehensivecomprehensivemonitoringmonitoringSolutionsSolutions

•• Buys 1000Buys 1000--10,000X Servers10,000X Servers

•• Has dedicated onHas dedicated on--site IT supportsite IT support

•• Wants lowWants low--costcostsolutionssolutions

•• Needs lightNeeds lightweight toolsweight tools

SMBs and IPDC customers have similar needsSMBs and IPDC customers have similar needs

Bringing SMBs to Cloud will spur a new investment cycleBringing SMBs to Cloud will spur a new investment cycle

Managed Service Providers (MSP) are like a virtual DataManaged Service Providers (MSP) are like a virtual Data--centercenter

44

SMBs Strength and ConcernsSMBs Strength and Concerns

•• SMBs form the bottom of businessSMBs form the bottom of businesspyramidpyramid–– Focused on local endFocused on local end--usersusers

–– Doctors, lawyers, accountants, restaurantsDoctors, lawyers, accountants, restaurantsand other SMBs with computing needsand other SMBs with computing needs

•• 11--9 Employees Small Businesses (SB) form9 Employees Small Businesses (SB) form2/32/3rdrd of the totalof the total MarketMarket

•• India has 7.8M SMBs, spentIndia has 7.8M SMBs, spent $8B$8B on ITon IT–– Of which, 3.9M are Small Businesses,Of which, 3.9M are Small Businesses,

spentspent $4.5B on IT$4.5B on IT andand $4.2B on Telecom$4.2B on Telecom

• But a low rate of Cloud adoption– Lack of Vertical Applications

• Domain specific SW in cloud

– Trust Issues• Data security and portability

– Lack of 24x7 internet connectivity• Bandwidth limitations, cost etc.

mediumBusiness100-999 employees

Small Business1-99 employees

21.3M PC only

4.4MPC + Network Access

702K

7.6MHave PC, Server

& Network access

Source: AMI SMB Global Forecast Model, AMIVertical Market Study

IT use by Emerging market SMBs ‘07

Emerging Market SMBs want onEmerging Market SMBs want on--site copy of Apps and Datasite copy of Apps and Data

55

State of Cloud ComputingState of Cloud Computing•• Evolving from endEvolving from end--user services (search, email, social networking) to support Missionuser services (search, email, social networking) to support Mission

Critical business and commercial grade applicationsCritical business and commercial grade applications–– Some are based entirely out of clouds, e.g., Salesforce.comSome are based entirely out of clouds, e.g., Salesforce.com–– Many companies want their own private enterprise cloudsMany companies want their own private enterprise clouds

•• Challenges include Mass deployment, Health monitoring and Power management etc.Challenges include Mass deployment, Health monitoring and Power management etc.

Source: http://www.b-eye-network.com/view/8702

•• Coming years will see newComing years will see newemerging trendsemerging trends

–– Different from the grid computing,Different from the grid computing,software as a service (SaaS) orsoftware as a service (SaaS) orsimple web hostingsimple web hosting

•• Trend #1: Abstraction ofTrend #1: Abstraction ofnetwork, storage, database,network, storage, database,security and computingsecurity and computinginfrastructureinfrastructure

–– Offering image of onOffering image of on--demand,demand,virtual data center with flexibilityvirtual data center with flexibilityimplied in scalability and agility;implied in scalability and agility;

•• Trend #2: A pricing model thatTrend #2: A pricing model thatis retail in its conceptionis retail in its conception ––

–– Pennies per gigabyte, massive CPUPennies per gigabyte, massive CPUcycles and bandwidth; andcycles and bandwidth; and

•• Trend #3: SLAs forTrend #3: SLAs for–– Data persistence, system reliability,Data persistence, system reliability,

redundancy, security and businessredundancy, security and businesscontinuitycontinuity

66

Intel in Cloud ComputingIntel in Cloud Computing•• 75% of TCO (Total Cost of Ownership) is for HW and power/cooling75% of TCO (Total Cost of Ownership) is for HW and power/cooling

–– Use energy efficient processorsUse energy efficient processors•• Intel processors are ~30% more efficient than competitionIntel processors are ~30% more efficient than competition

–– Use HW virtualization technology for Elastic ComputingUse HW virtualization technology for Elastic Computing•• Intel’s HW Virtualization gives 2X boostIntel’s HW Virtualization gives 2X boost more VMs / servermore VMs / server

•• Optimize at platform, software and dataOptimize at platform, software and data--center levelscenter levels–– Focus on DC management and cloud services at the System levelFocus on DC management and cloud services at the System level

•• DCMI spec for efficient server managementDCMI spec for efficient server management–– Node Manager for server and rack levels, 20Node Manager for server and rack levels, 20--30% savings potential30% savings potential

•• Dynamic adjustment of power states based on loadDynamic adjustment of power states based on load

•• Need software for largeNeed software for large--scale cloudsscale clouds–– Establish an internet scale global test bed for Cloud researchEstablish an internet scale global test bed for Cloud research

•• A new Open Cirrus initiative with HP and YahooA new Open Cirrus initiative with HP and Yahoo

Intel Architecture offers ideal platforms for cloud computingIntel Architecture offers ideal platforms for cloud computing

77

Emerging Market InnovationsEmerging Market Innovations

How to transport more peoplein a vehicle?

Simply double them up…

88

LocalNetwor

k Appliance

Printer

Desktop

Notebook

IP Phones

Ba

cku

p

Se

arc

h

PB

X

File

/Pri

nt

AP

PS

Extending Cloud to SMBsExtending Cloud to SMBsAn onAn on--premise appliance for service delivery?premise appliance for service delivery?

Internet

Connection

•• Extension for cloud based servicesExtension for cloud based services -- Range of applications possibleRange of applications possible•• Remote Serviced and Managed from the cloudRemote Serviced and Managed from the cloud•• Trust and security managed with TPMTrust and security managed with TPM

CHALLENGESCHALLENGES –– WHERE DOES IT WORK/DOESN’T WORK?WHERE DOES IT WORK/DOESN’T WORK?

Remote AppsHosting, patching,monitoring, Databackup etc.

99

OnOn--Premise Appliance for Service DeliveryPremise Appliance for Service DeliveryRacks

Racks

ModelModel Cloud Data CenterCloud Data Center Distributed OnDistributed On--Premise AppliancePremise Appliance

WorkloadsWorkloads Scales for Large workloads Probably sufficient for small workloads

Usage ModelsUsage Models Easily supports highly mobiledevices

Only supports on-premise devices(Mobile devices require VPN)

Bandwidth/Bandwidth/ApplicationApplicationperformanceperformance

WAN bandwidth may not besufficient for certain client facingapplications (e.g. File Sharing)

WAN bandwidth may not be sufficientfor certain customer facing applications(e.g. Web site)

Cooling CostsCooling Costs High Low

Energy CostsEnergy Costs Provider pays Customer pays

CAPEXCAPEX Pay for facility but high utilization Low utilization but no facility costs

OPEX costsOPEX costs Lower Low with remote management

1010

Inside a CloudInside a Cloud

Dynamic provisioning over physical layers for economy of scaleDynamic provisioning over physical layers for economy of scale

1111

Going Beyond: to handGoing Beyond: to hand--held clientsheld clients

• Large cell-phone owning population is ready for rich experience

– Same internet services that you can get on a connected laptop

– Using MIDs (Mobile Internet Devices) based on Intel® Atom™ processors

• Take advantage of IA presence on Clients and Servers

– Optimize Storage, Compute & visualization scheduling based on Energy,Security, and Performance

– Take advantage of SaaS technologies

– Software runs where it runs best depending on device caps

– Data moves transparently between the MID and the Cloud

• Deliver a superior user experience when connected

– Connected visual computing is one example

Deliver a greater business value to the EndDeliver a greater business value to the End--usersusers

1212

Summary: Intel Cloud StrategySummary: Intel Cloud Strategy

1

2Optimize technology for large-scale clouds: datacenter,software & platforms

Deliver the energy efficiencyand virtualization technologydemanded by all clouds

Intel is driving efficiency, performance, andIntel is driving efficiency, performance, andnew capabilities throughout the stacknew capabilities throughout the stack

3Enable MID devices for Cloudaccess on the move

BackupBackup

1414

More breakthroughs RequiredMore breakthroughs Required1.1. Network LatencyNetwork Latency

–– High bandwidth vs. High LatencyHigh bandwidth vs. High Latency

2.2. Software DesignSoftware Design

–– Application PartitioningApplication Partitioning

–– Energy/SecurityEnergy/Security--aware managed runaware managed run--timetime

3.3. FineFine--grained Migration & Provisioninggrained Migration & Provisioning–– EnergyEnergy--aware code migrationaware code migration

–– Virtualization of accelerators and TPMsVirtualization of accelerators and TPMs

–– Remote visualizationRemote visualization

4.4. SecuritySecurity

–– Projection of Trust & confidentiality from the userProjection of Trust & confidentiality from the user--device into the Clouddevice into the Cloud

5.5. OS design; Scheduling computation and I/OOS design; Scheduling computation and I/O

–– Failure handling and errorFailure handling and error--recoveryrecovery

–– Application sandboxing via lightweight VMsApplication sandboxing via lightweight VMs

6.6. AvailabilityAvailability–– Offline vs. OnOffline vs. On--line syncline sync

–– Resilience to Power OutageResilience to Power Outage

7.7. Standards and OpenStandards and Open--source solutions for Cloud SW infrastructure supportsource solutions for Cloud SW infrastructure support

Need EcoNeed Eco--systems players to join handssystems players to join hands

1515

Economic Times: 7.6M SMBs in India, set to increase their IT spending by24%. Spent $8B in 2007 to beef up their servers and networking technology

back

1616

SmallSmallBusinessBusiness

PCPC 1.21M1.21Mbusinessesbusinesses

•• 3.89 mil small3.89 mil smallbusinesses of whichbusinesses of which30% have adopted30% have adoptedcomputerscomputers

•• 11--9 employees make up9 employees make up2/3 of total market2/3 of total market

•• Mostly in theMostly in theinfrastructure buildupinfrastructure buildupphasephase

•• Mobility is a significantMobility is a significantcharacteristic with 2/5characteristic with 2/5having mobile workershaving mobile workers

$4.45B$4.45B(Total IT Spending(Total IT Spending

in 2006)in 2006)

••14% CAGR14% CAGRNoNoPCPC

2.68M2.68Mbusinessesbusinesses

SMB SegmentationSMB Segmentation

back

Source: AMI India SB 2007

1717

SB OverviewSB Overview

Source: AMI India SB 2007

Total IT / Telecom Spending ($ millions)

Breakout of Total SB Market• There are an estimated 3.89million SBs in India that spend$8.67 billion on IT and telecom.

• IT accounts for slightly above 50%or $4.45 billion while telecomaccounts for $4.22 billion

• Key Verticals:•Retail•Manufacturing•Professional Business Services

0.04

0.38

0.09

0.15

0.28

0.09

0.18

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

# of PC Biz

InM

illio

ns

AMTUC

Mfg.

Wholesale

Retail

FIRE

Prof Bus Svcs

Other Svcs.

AMTUCAMTUC MfgMfg WholesaleWholesale RetailRetail FIREFIREProf. Bus.Prof. Bus.

SvcsSvcsOtherOtherSvcsSvcs

$543 M$543 M $2,538 M$2,538 M $310 M$310 M $1,917 M$1,917 M $684 M$684 M $1,442 M$1,442 M $1,240 M$1,240 M

6.5%6.5% 30.3%30.3% 3.7%3.7% 22.9%22.9% 8.2%8.2% 17.2%17.2% 14.8%14.8%

back

1818

0.1%

2%

2%

6%

6%

6%

6%

7%

8%

11%

12%

16%

17%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Others

Product related issues

Changing policies and regulatory requirements

Uncertain economic environment

Difficulty in accessing market intelligence or information

Hiring, developing and retaining staff

Increasing competition

Pressure in keeping up with new technology

Uncertain industry conditions

Difficulty in accessing business opportunities

Rising operating costs

Difficulty in raising financing for growth

Insufficient Cash flow

% of PC Biz

SB AttitudesSB Attitudes –– Key Business IssuesKey Business IssuesKey Issues Hindering Growth

Source: AMI India SB 2007

1919

8%

9%

9%

20%

24%

24%

25%

30%

32%

40%

43%

43%

44%

45%

68%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Deploy open-source operating systems like Linux

Adopt hosted/ on-demand solutions to reduce upfront software

expenditures

Increase IT storage capacity and deploy enhanced storage

solutions

Extending the network connectivity to branch offices & other

remote locations

Embrace e-Commerce

Reduce communication costs by adopting VoIP

Deploying wireless technologies and solutions

Outsource business processes including IT service & support

Enhance enterprise IT security

Train and educate employees on IT skills and knowledge

Replacing old hardware with newer ones

Upgrade and standardize operating systems

Networking all hardware in main office location

Buying additional hardware

Deploying high-speed broadband Internet access

% of PC SBs

SBSB AttitudesAttitudes –– IT PrioritiesIT PrioritiesStrategic Importance of Issues (next 12 months)

Source: AMI India SB 2007

Mo

st

Sig

nif

ica

nt

Mo

de

rate

Imp

ort

an

ce

Le

as

tS

ign

ific

an

t