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An Economic Study of the Hyperscale Data Center Ericsson Hyperscale Datacenter System 8000 Transforms the Economics of the Ente An Economic Study of the Hyperscale Data Center Ericsson Hyperscale Datacenter System 8000 transforms the economics of the enterprise data center, enabling a new generation of hyperscale architecture January 2016 An Economic Study of the Hyperscale Data Center White Paper TABLE OF CONTENTS Executive Summary 3 Welcome to the Networked Society 4 Transforming the Enterprise Data Center 4 Virtualization and Software-Defined Infrastructure 5 Hyperscale Pioneers 6 Ericsson Hyperscale Datacenter System 8000: Hyperscale Data Center Architecture for the Enterprise 6 Higher Utilization 7 Optimized Data Center Infrastructure Management: From “Procure-to-Provision” to “Pool-to-Provision” 9 Business Impact and TCO Analysis 10 Operating Expense (OPEX) Savings 10 Capital Expenditure (CAPEX) Savings 12 Revenue and Other Strategic Impacts 13 5-Year TCO Impact for Enterprise Data Centers 13 TCO and ROI Summary 14 TCO Model Approach and Assumptions 15 The Journey to Hyperscale 16 About This Study 17 About Mainstay 17 Appendix 18 Endnotes 19 Copyright © 2016 Mainstay, LLC 2 An Economic Study of the Hyperscale Data Center White Paper EXECUTIVE SUMMARY This paper examines the economics and performance of a new data center infrastructure solution from Ericsson called Ericsson Hyperscale Datacenter System 8000 that is poised to reshape how enterprise data centers are architected to meet the challenges of the hyper-connected Networked Society. Based on the paradigm-shifting Intel® Rack Scale Architecture, Ericsson Hyperscale Datacenter System 8000 delivers a hyperscale cloud solution for enterprise data centers that will enable quantum leaps in efficiency, infrastructure elasticity, and economics. Our research found that companies implementing Ericsson’s hyperscale platform can capture significant TCO savings compared to traditional data center infrastructures — generating CAPEX savings of up to 55%, OPEX savings of up to 75%, and a return on investment (ROI) of up to 138% for large enterprise data center operators over a five-year period. Ericsson Hyperscale Datacenter System 8000 generates these savings by delivering performance and scalability on par with data center leaders such as Facebook, Google and Amazon in a commercially available platform. By creating a pool of infrastructure components leveraging Intel’s new RSA technology, SDI techniques, and optical networking, data center operators can better match infra- structure capacity with application and network workload requirements, thereby improving utilization of these resources. In this white paper we detail the range of value drivers that support these results and estimate the impacts across different data center scale scenarios. In an economy where companies face exponentially rising data traffic and demands for new cloud computing capabilities, data center operators need to take a close look at new ways to provide IT services that are more flexible, cost-effective and vastly more scalable than what they offer today. Operators need to ask themselves whether they are ready for the Networked Society. Copyright © 2016 Mainstay, LLC 3 An Economic Study of the Hyperscale Data Center White Paper WELCOME TO THE NETWORKED SOCIETY We live in a world where five billion people are connected and where mobile, broadband, and cloud are transforming the fabric of society. Ericsson calls it the Networked Society and it is impacting our everyday lives in profound ways, not unlike the titanic shifts of the industrial revolution more than a century ago. Today, Internet connectivity and mobile communications are taken for granted.1 And with the rise of the Internet of Things, more products are becoming “smart” and connected with other things across an expanding global cloud network. Meanwhile information streams from these networks are proliferating, spawning opportunities to harness Big Data for competitive advantage as well as social progress. CHALLENGES FACING The world’s data traffic is exploding as a result. Analysts estimate that global workload growth will DATA CENTERS increase by 81% between 2015 and 2018, with the highest growth (113%) being cloud-based work- TODAY loads. And Ericsson is currently forecasting compounded annual growth of mobile traffic of 45% • Scaling to support between 2015–2021.2 All of this is placing enormous pressure on businesses and data centers to keep exponential growth of pace. Indeed, one of the most critical challenges facing enterprise data centers in the next few years application and network will be how to scale their computational capacity to meet exponentially growing digital workloads workloads with minimal in an economically efficient way. additional costs to the business (OPEX/CAPEX) To thrive in the Networked Society, businesses will need to seize fast-emerging digital business • Transforming service opportunities that require immediate deployments of compute, storage and networking resources. capabilities from back Demand can also recede or shift to new projects just as quickly, so enterprise data centers need to be office operations to a able to turn capacity on and off at short notice. This means data centers will need to provide business strategic revenue driving, stakeholders with the same “infrastructure on tap” capabilities that modern cloud-service providers customer-facing asset like Amazon Web Services have pioneered. • Increasing flexibility and Indeed, as McKinsey & Company has observed, one of the top priorities for enterprise data centers speed of delivery of will be establishing a commercial-style business relationship with internal customers. This will require infrastructure services to an ability to standardize the data center’s service offerings, provide a solid “bottom-up” service cost meet the dynamics of digital industrialization structure, implement robust infrastructure management solutions, and reinvent the way they serve customers.3 TRANSFORMING THE ENTERPRISE DATA CENTER The great majority of enterprise data centers today are ill-equipped to help businesses succeed in the Networked Society. Designed primarily to deliver back-office applications to internal business users, the traditional data center is burdened with an inefficient and costly architectural design that prevents it from scaling and flexing rapidly to meet the changing workloads of a modern digital enterprise. One of the biggest design inefficiencies of the conventional data center is the creation of separate silos of hardware and software for each application workload. Because resources are not shared between workloads, investments in capacity buffers (over-provisioning) and high availability need to be made separately for each workload, adding to the overall data center cost burden. Copyright © 2016 Mainstay, LLC 4 An Economic Study of the Hyperscale Data Center White Paper Figure 1. Traditional heterogeneous application workload management High Availability Buffer Overprovisioned Overprovisioned Overprovisioned Overprovisioned Capacity Capacity Capacity Capacity Required Required Required Required Long Procure-to-Pay Capacity Capacity Capacity Capacity Process per Workload Creates Overprovisioning Application Application Application Application Workload Workload Workload Workload for BU 1 for BU 1 for BU 2 for BU 2 Increases Proportionally Reduces hardware capital increases operating resource expenses expenses utilization Moreover, because traditional data centers typically follow a lengthy “procure-to-provision” process tied to the business’s annual capital investment cycle, system architects will typically over-provision the infrastructure to weather these lengthy procurement cycles. Enterprise architects we interviewed said they typically design 30% over-capacity for a standard workload and up to 60–70% for mission- critical workloads. Adding to data center complexity and cost is the wide variety of proprietary infrastructure components associated with each application stack. The bill of materials includes database appliances, storage solutions, servers, and networking solutions — all procured on a per-application, per-department basis. Heterogeneous environments like this always require more people to administer, adding to OPEX. Virtualization and Software-Defined Infrastructure To address these inefficiencies, the traditional data center is evolving. Server virtualization technology has allowed system administrators to have more flexibility in provisioning infrastructure resources. According to Forrester Research, 77% of x86 servers in enterprise data centers have been virtualized.4 Analysts estimate that virtualization has lifted x86 server utilization from 5–10% to over 30%.5 SOFTWARE-DEFINED INFRASTRUCTURE The success of server virtualization has opened the door to virtualizing other data center components, (SDI) such as network and storage, and leading to the next wave of enterprise data center optimization — Software-defined infrastructure software-defined infrastructure (SDI) — which seeks to virtualize the entire data center infrastructure. is the definition of technical Accelerating the spread of this new architecture is an industry-standard technology blueprint developed computing infrastructure by Intel called Intel® Rack Scale Architecture (RSA). entirely under the control of software. It operates Intel RSA is a logical architecture that disaggregates compute, storage, and network resources and independent of any hardware- introduces the ability to pool these resources for more efficient utilization of assets. It simplifies specific dependencies and
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