Wednesday, July 19th, 2017

Time	Event
12:00p	Cloud Market Forecast to Hit $200B by 2020 With cloud providers IBM, Microsoft, and Google releasing their quarterly financials within the week, and Amazon soon to follow, the folks at Synergy Research Group have polished their crystal ball in order to determine where it’s all going. They predict good fortune for those in the cloud business, as well as for developers of software that runs in the cloud. The news isn’t quite so stellar for those selling hardware and software to private enterprise data centers, however. In a report released Monday, Synergy said it expects worldwide revenues from cloud and SaaS services to grow at an average annual rate of 23-29 percent over the next five years and pass the $200 billion mark in 2020. This will come alongside an 11 percent annual growth in sales of infrastructure to hyperscale cloud providers. Public clouds will see the strongest growth, with an average gain of 29 percent annually, followed by managed or hosted private cloud services at 26 percent and enterprise SaaS at 23 percent. APAC will be the highest growth region, followed by EMEA and North America. The highest growth areas will be databases and IoT-oriented IaaS/PaaS service. “As cloud markets reach a massive scale, growth rates will inevitably tail off, but our latest forecasts are still showing that over the next five years we will still see some really robust growth,” John Dinsdale, Synergy’s chief analyst and research director, said in a statement. “As cloud continues to dramatically reshape the IT world, it is also clear that the hyperscale phenomenon continues to dramatically reshape cloud. Hyperscale operators are diminishing the growth opportunity for traditional non-hyperscale service providers and are also seriously challenging the technology vendor community to rethink its position in the new world.” The one downside will be in the sales of hardware and software to traditional enterprise data centers, which will continue to decline slowly. That market is expected to shrink by about 2 percent per year as workloads shift from privately owned infrastructure to the public cloud. In an April report on first quarter data, Synergy reported that cloud infrastructure service revenues — including IaaS, PaaS and hosted private cloud services — were nearly $10 billion with a growth rate of more than 40 percent. Although Amazon Web Services held the lead, Microsoft, Google, IBM, Alibaba and Oracle all had Q1 cloud revenue growth rates that were higher than that of AWS. Although Microsoft, Google and Alibaba all achieved Q1 annual growth rates of 80% or more, Amazon isn’t likely to lose its lead any time soon. In April it commanded 33 percent of the global cloud infrastructure market, with revenues comfortably larger than the combined total of its five closet competitors. (Comment on this)
3:00p	Internet Trends Report: Five ITSM Takeaways Aparna TA is a Product Analyst for ManageEngine. There’s an interesting time ahead for ITSM as it moves into the cloud and evolves to support a mobile workforce. Help desks will have to adapt as end users’ expectations of ITSM solutions start to mirror those of consumer applications. Every year, Mary Meeker, a partner at venture capitalist firm Kleiner Perkins Caufield & Byers, produces a report on global internet trends. And this year’s narrative, like all others, is extremely sought out by technology companies and enthusiasts. This highly anticipated report sets the stage for the next big thing and sheds light on consumer technology adoption. This year it covers a wide range of topics — from the increasing measurability of online advertising and the growing internet base in China to technological advancements in healthcare services. While the report doesn’t explicitly talk about the impact of global trends on ITSM, it leaves a lot of breadcrumbs that set expectations for the future of the ITSM industry. Here are a few things that might be relevant to IT service management. Mobile is driving the consumerization of enterprise IT – People spent more than twice as much time on mobile, desktop and other connected devices in 2016 than they did in 2008. As the wall between personal life and work wears down, customer expectations on an enterprise level are mirroring those of consumer apps. IT service desk vendors are starting to adopt a mobile-first strategy to stay relevant to the mobile workforce. The ability to put a service desk in the palms of end users helps to drastically increase self-service adoption and improve user satisfaction. The cloud is accelerating change across enterprises – Cloud adoption has increased to new heights and is creating opportunities for new methods of software delivery such as APIs, microservices, elastic databases, etc. The shift from costlier perpetual licenses to cheaper subscription models has contributed to the rapid increase in cloud adoption, as the time and cost of setting up a cloud infrastructure are minimized. As customers start to move toward a cloud-only IT infrastructure, SaaS has become a de facto model for many new vendors. With simple integrations, ITSM will be able to adopt newer technologies more quickly now than ever. The cloud also provides mobility and has the potential to take service desk operations beyond four walls to remote locations across the globe. Rising security concerns dictating the need for more compliance – As enterprises adopt cloud infrastructure, they are more wary about their applications’ security and compliance. The increased adoption of public and private clouds has led to an exponential increase in the severity of malicious threats. Cloud vendors are warming up to new data protection and security policies, especially after the EU’s announcement of the General Data Protection Regulation (GDPR). This illustrates the greater need for the ITSM community and cloud vendors to work together to keep vulnerabilities at bay. Gaming can help optimize learning and engagement – There are about 2.6 billion gamers now compared to just 100 million in 1997, and gaming is still evolving. Gaming provides an intuitive interface to learn, and many organizations now use gamification to provide an engaging learning platform. Many help desks have already implemented gamification in their tools to increase IT technician productivity. This can also be used to align IT technician’s day-to-day activities to business goals, thus creating a sense of accomplishment. Gaming can also be used to help end users adopt self-service portals and IT service desks faster. Social media can provide an opportunity to improve customer service – In a survey by Ovum, more than 60 percent of organizations expressed the need to provide easier access to online support channels. The growth of new tools like APIs and browser extensions has paved the way for innovative service delivery models which integrate enterprise applications (such as help desks) with consumer applications, including social media. Many companies are actively using social media as a channel to address customer concerns and resolve issues. Many help desks have built-in integrations with social channels that automatically convert tweets or posts into tickets, thus utilizing popular social channels to widen the reach of online support. Social media channels provide a unique opportunity to go the extra mile to delight customers while gaining trust and brand equity. These are just some of the key internet trends that coincide or overlap with the trajectory of ITSM and related technologies. While this report focuses on major internet trends, there are several technologies like AI, machine learning, analytics and IoT that are expected to be big game changers in the future of ITSM. Opinions expressed in the article above do not necessarily reflect the opinions of Data Center Knowledge and Penton. Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library. (Comment on this)
4:52p	Chipmakers Nvidia, AMD Ride Cryptocurrency Wave — for Now Ian King (Bloomberg) — During California’s Gold Rush, it was often the sellers of pickaxes and shovels who made the most money. In the frenzy to get rich quick from cryptocurrencies, some investors are calling computer chipmakers the modern-day equivalent. Shares of Nvidia Corp. and Advanced Micro Devices Inc. have gained at least 14 percent since the beginning of June, spurred in part by about a 10-fold boom from April to June in a market, known as ethereum, for a currency that can be used to buy computing power over the internet. What’s the link between ethereum and these Silicon Valley chipmakers? It lies in the really powerful graphics processors, designed to make computer games more realistic, that are also needed to gain access to encrypted digital currencies. Nvidia and AMD have rallied in the last month and a half even as investors have ignored chip stocks leaving the benchmark Philadelphia Stock Exchange Semiconductor Index up about 1 percent. Nvidia has gained 14 percent and AMD rallied 27 percent. See also: Immersion Cooling Finds Its Second Big Application: Bitcoin Mining While some of that has come from optimism around new products for other markets, analysts are projecting that sales related to cryptocurrencies will result in a spike in revenue for both companies. “The sharp increase in demand from cryptocurrency miners has rapidly depleted excess channel inventory” for Nvidia and AMD graphics cards, Michael McConnell, an analyst at Pacific Crest Securities, wrote in a recent note to clients. “Surging demand from cryptocurrency miners in China and Eastern Europe since early May” will boost quarterly unit sales by as much as 20 percent, the analyst predicted, a sharp turnaround from his prior forecast that saw at least a 10 percent contraction in sales. Even so, investors shouldn’t bank on a lasting impact from the cryptocurrency boom, said Stacy Rasgon, an analyst at Sanford C. Bernstein & Co. “This has happened before,” Rasgon said. “It lasted about a quarter.” In the case of ethereum, digital-currency miners use machines outfitted with powerful chips to solve puzzles in a competition to win blocks of code. Those blocks of code are called ether, and they in turn act as tokens used in transactions on a new computing platform designed as an alternative to big internet providers like Amazon.com Inc. or Alphabet Inc.’s Google. Like bitcoin, ethereum is an attempt by an online community to create an economy that doesn’t rely on government-backed currencies. Unlike bitcoin, it’s focused solely on offering decentralized computing and storage services. Those seeking to use these services — and speculators looking for a quick profit by creating and then selling ether — have seized on graphics cards, which excel at performing multiple simple calculations in parallel, as a faster way to claim the blocks of code that act as the currency of the ethereum market. Demand from ethereum miners has created temporary shortages of some of the graphics cards, according to analysts, who cite sold-out products at online retailers. Estimates of additional sales from this demand run as high as $875 million, according to RBC Capital Markets analyst Mitch Steves. That would roughly equal AMD’s total sales from graphics chips last year, or half of Nvidia’s quarterly sales of those components. But Steves and other analysts are also quick to warn that the market opportunity could fizzle out. The first indication of just how much impact mining-gear sales are having will come when AMD reports earnings on July 25. Already there are signs that investors and speculators are becoming less interested in cryptocurrencies. Overall the sector, including bitcoin, the largest cryptocurrency has lost about a third of its market value since peaking in early June, according to Coindesk, pushing it into what traditional equity market analysts label as a bear market. Ethereum has fallen about 30 percent since July 4. Unlike the world of pickaxes and shovels, the technology of cryptocurrencies and computer graphics is constantly evolving. To ensure that the world isn’t flooded with new blocks of the code that make up ether’s value, the procedure for solving the problems to create the tokens was designed to become incrementally more difficult. That complicated and fast-changing process for creating value in the market may lead to a repeat of what happened with bitcoin, which also must be mined using increasingly sophisticated computing power. During a boom that started in 2013, the puzzles required to mine that currency soon outran the capabilities of graphics chips. That required the use of specialized semiconductors — application specific integrated circuits, or ASICs — designed for the purpose of mining bitcoin only. That meant that the flood of graphics chips initially sold to mine bitcoin was dumped back into the second-hand market once they were no longer useful for that task, causing a glut — which hurt pricing and sales of new cards. “My strong belief is that all of these will be solved by ASICs in the end,” said Matt Ramsey, an analyst for Canaccord Genuity. “I don’t think it’s even remotely strategic to either company.” Some analysts say this time is different, arguing that the ethereum algorithm was written in a way that disadvantages ASICs, forcing miners to stick with graphics chips. Others counter that it’s just a matter of time before someone designs the right ASIC. Within the ethereum community, there’s also a movement to change the algorithm from its current format to curb the associated energy consumption. Running graphics cards — which can draw as much power as a small tube TV — is a suck on energy resources, particularly when those resources aren’t being used for a productive purpose. A shift to a system that doesn’t require mining would remove the need for committing computing resources, and therefore graphics chips, to solving the puzzles. The right hedge for graphics-chipmakers may already be out there. Computer-card manufacturers, including Asustek Computer Inc., which buy chips from Nvidia and AMD, are making products specifically for the cryptocurrency-mining market. Crucially, they’re leaving off all or most of the video connections from the finished products, meaning that even if the cryptocurrency market is soon mined out, the cards will be no use to gamers and therefore less likely to cause a glut by flooding the resale market. Asustek, one of the largest contract manufacturers of computers, offers two cards for the market. One doesn’t have any ability to connect with a display and the other only has a digital video interface port, or DVI, a connection technology that debuted in 1999 and was superseded about a decade ago making it useless to gamers who crave realism. Nvidia declined to comment on the cryptocurrency market opportunity. AMD said it’s sticking to its focus on gamers. “The gaming market remains our priority,” the company said in an emailed statement, repeating what it said earlier this quarter. “We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency-mining markets based on the strong performance we are delivering.” (Comment on this)
7:04p	Land Constrained Singapore to Study Underground and High-Rise Data Centers Singapore government has agreed to fund a research project by a local data center provider and a Chinese hardware vendor on designing and building underground and high-rise data centers, as the small island nation’s outsize data center industry faces a future marked by land shortages. Because of its location and access to a large variety of submarine cables, the city state is one of the hottest data center markets in all of Asia Pacific. Things have been heating up even more in recent years, as hyper-scale cloud companies expand their global data center footprint, driving a shift toward bigger and bigger, wholesale data center leases in the Singapore market. But there’s only so much land on the island, and if it is to remain competitive as a data center destination against its biggest rival in the neighborhood, Hong Kong (which is having serious land issues of its own), and several emerging markets nearby, such as Malaysia, Thailand, Vietnam, and Indonesia, it needs solutions. And aside from building floating data centers or submerging servers onto the sea floor, building up and building down appear to be the only options that don’t involve engineering around seawater. “The exploration of alternatives to conventional above-ground data centers will open up new possibilities for land-scarce Singapore,” Keppel, one of the largest data center providers in Singapore, said in a statement. Keppel will lead the research project with help from the government’s Green Data Centre Innovation Program, ZDNet reported. The program, administered by the Infocomm Development Authority of Singapore, issues grants to fund data center efficiency research. Another partner is Huawei, the Chinese technology giant, whose role will be to provide “technological expertise.” Structure Research, which studies the Singapore data center colocation market (both retail and wholesale), forecasted the market to reach $811 million in revenue in 2016 and to grow 9 percent this year. By 2020, the analysts predict, the Singapore data center market will reach $1.6 billion. There isn’t exactly a shortage of land in Singapore today, so the partnership is more about preserving long-term market sustainability, Jabez Tan, research director at Structure, told Data Center Knowledge via email. A piece of land designated as a data center park in the island’s Jurong West territory, for example, is designated to support six to eight data centers, and only two builds have been confirmed there so far, he said. Still, a smaller land supply in the future could stifle the Singapore data center market growth. Hyper-scale cloud providers, who are responsible for the bulk of recent deals closed by data center companies in Singapore, may not necessarily want to move into high-rise data centers. According to Tan, both wholesale data center companies and cloud providers have told Structure that hyper-scalers prefer not to deploy large-capacity data centers in high-rise buildings because of risk and accessibility concerns. They may deploy smaller network points of presence in high rises, but not their many-megawatt cloud availability zones. While their preferences may “evolve” as land supply in Singapore shrinks, “what could also happen is that the massive-scale clouds could potentially locate their large compute farms in adjacent markets with more readily available land, such as Malaysia, and use that to augment their existing deployments in Singapore to avoid being in high-rise buildings,” he said. (Comment on this)

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