A single website – Facebook – now serves the online needs of one billion people every day. That means that the social media giant, and an increasing number of equally popular companies operating in the technology space, must rely on data centers and computer architecture that can handle rapidly expanding demand and a whole lot more. Who will control these “hyperscale” data centers and the evolving, complex technology behind them is now the focus of attention, as the biggest names in the tech world are engaged in a series of chess moves designed to control costs, create a potentially lucrative cloud-based business, and hopefully avoid a catastrophic network collapse.
A hint at the stakes involved between the biggest players was conveniently dropped by none other than Satya Nadella, CEO of Microsoft, who told a gathering at Dell’s major conference last month that domination of cloud computing is now a “Seattle race” between his firm and Amazon. The implication is that Google will be a sideline player in the cloud market, despite the search giant’s efforts to build their reputation in this space.
These and other cloud-related topics occupied the agenda for the last two days at – Structure 2015 – an annual gathering of IT executives and analysts held in San Francisco. This year’s Structure featured dialogue from a number of presenters who were unanimous in the opinion that the cloud industry is about to experience a wave of unprecedented advancement. “I think the next five years in cloud will see much more evolution that the last five,” said Urs Hölzle, Google’s senior vice president of technical infrastructure.
Hölzle agreed that Google needed to catch up to the Seattle duo (“We’re clearly coming from behind.”), but he also promised “a few announcements coming out” that would highlight Google’s cloud commitment.
One company who did make an announcement this week timed to the Structure conference was Facebook who unveiled a data center switch called the Wedge 100 that is designed to better meet its hyperscale needs. “It’s just a lot of data that we have to move around,” said Jay Parikh, Facebook’s vice president of engineering.
Interestingly, through tech advances such as Wedge and other highly advanced data center platforms, Facebook now has one of the most sophisticated cloud operations in the world. Yet the company has steadfastly refused to enter the public cloud market, a business opportunity to rent out massive amounts of server space, in contrast to Amazon (AWS) and Microsoft (Azure). Asked directly about this during Structure yesterday, Parikh explained that the social media giant did not currently see this as a fit with their business goals.
“Our core mission is about connecting everyone on the planet,” said Parikh. “How does building a public cloud service fit into that mission?”
An important trend in the current state of cloud and data center technology is that we now appear to be moving into a new phase of innovation where advancements in network architecture are moving faster than the ability of computers to process them. Hölzle expressed a belief that the doubling of computer processing power every two years (known as Moore’s Law) was “slowing down,” while networking was experiencing rapid advances.
While the Google executive presumably expects these advances to come from his firm and other major players, others are not so sure. Vinod Khosla, one of the co-founders of Sun Microsystems and now a highly influential venture capitalist, told the Structure gathering on Wednesday that he does not believe the bigger companies will lead the way.
“What we need going forward is very different than the old model of the enterprise,” said Khosla. “Ninety percent of innovation will come from startups.”
His investment firm – Khosla Ventures – is certainly hoping this will be true as they have backed several small companies in the hyperscale space. These include Big Switch, Nutanix, and Mesosphere, a cloud computing startup that Microsoft tried to buy earlier this year.
Mesosphere is considered to be a hot prospect because its technology can manage thousands of tasks within server clusters and the increasingly popular Docker containers, which are making the running of servers in a data center environment much more efficient. In a separate appearance during Structure on Wednesday, Mesosphere’s CEO and founder, Florian Leibert flatly dismissed acquisition rumors. “We are not for sale,” said Leibert.
According to Adrian Cockcroft of Battery Ventures, Amazon’s cloud business (AWS) is now growing faster than its retail segment, at 80% year on year. Deutsche Bank recently estimated that AWS could be worth $160 billion as its own company. For many, that’s a sign that the cloud computing world is taking off and will carry along any firms with viable technology that can meet the tidal wave of demand. As data centers achieve hyperscale, companies who rent them out for cloud services could soon be reaping hyperprofits as well.