11 price reductions over 4 years, Amazon Web Service's James Hamilton thoughts on pace of innovation

James Hamilton is keynoting at SIGMOD Athens and his presentation description has some good ideas to think about.

Keynote 1: James Hamilton, Amazon Web Services

Internet Scale Storage


The pace of innovation in data center design has been rapidly accelerating over the last five years, driven by the mega-service operators. I believe we have seen more infrastructure innovation in the last five years than we did in the previous fifteen. Most very large service operators have teams of experts focused on server design, data center power distribution and redundancy, mechanical designs, real estate acquisition, and network hardware and protocols. At low scale, with only a data or center or two, it would be crazy to have all these full time engineers and specialist focused on infrastructural improvements and expansion. But, at high scale with tens of data centers, it would be crazy not to invest deeply in advancing the state of the art.

Looking specifically at cloud services, the cost of the infrastructure is the difference between an unsuccessful cloud service and a profitable, self-sustaining business. With continued innovation driving down infrastructure costs, investment capital is available, services can be added and improved, and value can be passed on to customers through price reductions. Amazon Web Services, for example, has had eleven price reductions in four years. I don’t recall that happening in my first twenty years working on enterprise software. It really is an exciting time in our industry.

Here is anther thing to keep in mind.   From reading this statement it seems Amazon Web Services does not use blades.  If Amazon has determined it shouldn’t use blades why should you?

· Datacenter Construction Costs

o Land: <2%

o Shell: 5 to 9%

o Architectural: 4 to 7%

o Mechanical & Electrical: 70 to 85%

· Summarizing the above list, we get 80% of the costs scaling with power consumption and 10 to 20% scaling with floor space. Reflect on that number and you’ll understand why I think the industry is nuts to be focusing on density. See Why Blade Servers Aren’t the Answer to All Questions for more detail on this point – I think it’s a particularly important one.

From 2008 James has discussed blades.

Summary so far: Blade servers allow for very high power density but they cost more than commodity, low power density servers. Why buy blades? They save space and there are legitimate reasons to locate data centers where the floor space is expensive. For those, more density is good. However, very few data center owners with expensive locations are able to credibly explain why all their servers NEED to be there. Many data centers are in poorly chosen locations driven by excessively manual procedures and the human need to see and touch that for which you paid over 100 million dollars. Put your servers where humans don’t want to be. Don’t worry, attrition won’t go up. Servers really don’t care about life style, how good the schools are, and related quality of life issues.

Here is a simple one liner.

Density is fine but don’t pay a premium for it unless there is a measurable gain and make sure that the gain can’t be achieved by cheaper means.