Almost everybody was raising their eyebrows a few years ago when Amazon announced that it was opening up its data center infrastructure to others. Since, it has grown by leaps and bounds and supposedly contains more than 40,000 servers available for rent at this time (each of which hosts more than one virtual server). Many competitors have sprung up whose growth is not shabby either.
Recently Netflix announced that it would move its own not insignificant web operation entirely onto the Amazon infrastructure. This may well be a watershed moment in the adoption of virtualized servers-to-rent.
By 2020, it seems safe to say that most servers will be operated virtually in massively scaled data centers like Amazon’s. More and more people are already pronouncing that they will not ever buy a server again. The reason is simple: why should I have to worry about adding or replacing disk drives? Fixing broken power supplies and all the other things that go wrong with servers? Massive server farm operates can do that at a fraction of my cost. And they enable me to operate servers on three continents, if I want to, without ever leaving my office; something impossible before.
The most obvious impact: sales channels for servers. So far, most servers have been sold in small batches: “I have a new site / I have a new app in my enterprise, let’s buy some servers for it.” In 2020, the number of server-buying customers will be much smaller: just the set of cloud operators. Like Google, they might even build their own servers. Margins will come down in any case. Not a market I’d want to be in.
2 responses to “Clouds, Datacenters, Virtualization and the Disruption of the Server Market”
I would like to think that this is a cycle like the one that brought about the personal computer revolution in the first place. We’ll see a swing towards big centralized data centers, but then people will start to deal with the limitations of that and a new age of more personally oriented servers will spring up.
I have no particular confidence in that prediction, however.
One interesting note, though, is that Amazon’s service is in many ways that same “take control away from the IS guys” that the personal computer was back in the late ’70s and early ’80s: I’ve got a friend who works for the USGS who’s a huge Amazon user. One of his reasons is that it’s much easier to break out his personal credit card and seek reimbursement than it is to get their computing facilities to provision and deploy a server, and not even in the same universe as getting them to both give him a server and admin access to it. So Amazon it is.
Amazon’s EC2 opened for business in 2006. They have been operational for four years.