Servers and Data Centers, Intel's formula for Profit Margins

Barron's has a post on Intel' presentation at a Morgan Stanley Technology event.

• FEBRUARY 28, 2011, 2:42 PM ET

Intel Talks Up Data Center, Networking Prospects

By Tiernan Ray

Most interesting presentation today by Intel’s (INTC) chief of its data center unit,Kirk Skaugen, speaking at the Morgan Stanley Tech, Media and Telecomconference.

One of the more interesting facts was Intel's server processor margins.

Since 2005, Intel’s increased its share of the server market for processors from 80% to 92%, he notes and increased its average selling prices by 60%. Intel’s total unit volume of server chips is about the same as in 2005 as a percentage of total company shipment volume, at 5.5%, but those chips now make up 22% of revenue, double what they were five years ago, and a third of Intel’s profit.

One other part the author discussed as interesting is Intel's comment on Networking.

But another interesting one was Skaugen’s insistence the networking market is going the way of PC microprocessors:

So if you look at an old Cisco [Systems (CSCO) switch or router, it used to be internally developed ASIC from Cisco. If you open up a Nexus 5000 today it’s a Xeon microprocessor next to an ASIC. And I bet you in the future you’re going to just see two Xeon microprocessors there because we’ll put new instructions into the chip that will accelerate things that used to be proprietary.

With an Eye on China, India’s spending most likely includes defense data centers

Reuters has an article on India’s increase is defense department. spending.

With an eye on China, India steps up defence spending

NEW DELHI | Mon Feb 28, 2011 5:19am EST

Feb 28 (Reuters) - India increased annual defence spending by about 11.6 percent on Monday, aiming to overhaul the military to counter the rapidly growing capabilities of giant neighbour China.

The hefty increase suggests the government plans to move ahead with some of a slew of planned defence acquisitions, analysts said, including a $10.5 billion fighter jet contract, one of the world's largest on offer.

With all that defense spending you would think there is a bunch of data centers being built to support defense operations and cyber security.  But, I am sure we will not hear anything about those data centers.

SeaMicro ships 64-bit Atom Server, 1/4 power of Xeon

SeaMicro has a press release on its latest 64-bit Intel Atom Server.

SeaMicro Now Shipping the World’s Most Energy Efficient x86 Server with New 64-bit Intel Atom N570 Processor

The New SM10000-64™ Integrates 256 Intel® Atom™ Dual-core 1.66GHz Processors – 512 64-bit Cores and 850GHz, into a 10 Rack Unit System

A Hadoop benchmark was run that beat the performance of Xeon based servers with 1/4 the power.

For example, in the Hadoop MinuteSort benchmark test (http://sortbenchmark.org), 29 SeaMicro SM10000-64s were able to beat the performance of 1,406 dual socket quad core servers, but used just one-quarter of the power and took one-fifth the space.

Here is a Mozilla case study on using the SeaMicro box.

Mozilla compared performance on the SeaMicro
SM10000 with their incumbent system - an HP C7000
Dual Socket Quad Core L5530 Xeon Blade and found
SeaMicro to be dramatically superior on all of the
competitive dimensions: Capital expense per unit
compute, HTTP requests serviced per/Watt, and HTTP
requests serviced per Rack Unit. These advantages
combined to produce dramatic savings in both capital
expense and operating expense. On the operating
expense side, the SeaMicro SM10000 used less than
1/5 the power per request, and took less than 1/4 the
space of the HP C7000 for small transaction, high
volume workloads.

VentureBeat also covers the press announcement.

“The response has been extraordinary,” said Andrew Feldman (pictured at top), chief executive of SeaMicro. “The sucking sound in the market is unbelievable. Everybody wants low-power computing.”

Cloud Hype reaches milestone, Toilet Humor

The cloud is everywhere and now it has reached a milestone and achieve Toilet Humor status with Chris Hoff's presentation on Commode Computing.

One nice thing about blogging about topics is it makes you read an article twice, and I missed Part 2 of the video of my first read.

Here is Chris's blog post. with more background.

Video Of My CSA Presentation: “Commode Computing: Relevant Advances In Toiletry & I.T. – From Squat Pots to Cloud Bots – Waste Management Through Security Automation”

February 19th, 2011beakerLeave a commentGo to comments

This is probably my most favorite presentation I have given.  It was really fun.  I got so much positive feedback on what amounts to a load of crap.

This video is from the Cloud Security Alliance Summit at the 2011 RSA Security Conference in San Francisco.  I followed Mark Benioff from Salesforce and Vivek Kundra, CIO of the United States.

Example of a blog that gets labeled as content farm

Google has made changes to its search algorithm to reduce rankings of content farms.

Finding more high-quality sites in search

2/24/2011 06:50:00 PM

Our goal is simple: to give people the most relevant answers to their queries as quickly as possible. This requires constant tuning of our algorithms, as new content—both good and bad—comes online all the time.
Many of the changes we make are so subtle that very few people notice them. But in the last day or so we launched a pretty big algorithmic improvement to our ranking—a change that noticeably impacts 11.8% of our queries—and we wanted to let people know what’s going on. This update is designed to reduce rankings for low-quality sites—sites which are low-value add for users, copy content from other websites or sites that are just not very useful. At the same time, it will provide better rankings for high-quality sites—sites with original content and information such as research, in-depth reports, thoughtful analysis and so on.

Some professional bloggers make a significant portion of their income from advertising.  Check out this post as one example of a blogger labeled as a content farm.

Unfortunately (and surprisingly), this change has had a major impact* on organic traffic flowing through Google to Digital Inspiration as well. See this chart from Google Analytics.

Google has rolled out their new algorithm in US only but once the changes are propagated to other country-specific Google sites - like google.co.in and google.co.uk – the organic traffic from Google to Digital Inspiration would take an even bigger hit.

The AdSense-centric business model of this blog, where online advertising revenues are more or less based on the number of page-views, will obviously suffer because of this change in search engine rankings.

I am so glad I don't depend on Google Adsense for income as much as it is another metric to measure how well my site works.

Thanks for continuing to visit the Green Data Center blog.  Total traffic is the important if you are focused on advertising revenue.  I have different goals that I'll be sharing in more details as I roll out changes in the site.