The Gartner Data Center Conference kicked off this morning in Las Vegas. Despite the completely packed plane coming out here, Vegas seems quieter and not so crowded. The bartender at Wolfgang Puck’s Bistro told me they were looking forward to the 1800 people coming to this show to fill the hotel up. As we’ve noted, the economic crisis is impacting business travel all around.

22% of the attendees at Data Center come from the public sector and government, with 44% coming from very large enterprises of 20K+ employees.

During the Gartner IOM conference in June, some of the most interesting info coming out of it was the quick polls of the audience on a variety of infrastructure and operations management topics. What are enterprises doing? Where are they headed? What’s important to them? Here are some quick takes from the opening session:

1) What is the largest data center challenge that you currently face?

• Smaller Budgets: 21%
• Power & Cooling: 20%
• Dealing with the Rate of Technology Change: 15%
• Aligning Activities with the Business: 15%
• Modernizing Legacy Applications: 10%
• Lack of Data Center Space because of Equipment Spread: 9%
• How to Source IT Services: 5%
• How to Find and Retain Talent: 5%

Well, it’s taken almost a year to be “official”, but the National Bureau of Economic Research just announced that the US has been in a recession since December of 2007. It should come as a surprise to no one that dealing with smaller budgets is top of mind, even for the predominantly larger enterprises attending here.

2) What projects will receive the most funding in 2009?

• Virtualization/Consolidation: 31%
• Data Center Facilities – new builds: 17%
• IT Operations Process Improvement: 12%
• IT Modernization: 7%
• Green IT: 5%

Virtualization and (server) consolidation projects are clearly a priority for larger enterprises in 2009. What’s interesting here is the relatively very low priority of Green IT projects – in spite of the importance to attendees of getting power and cooling costs under control. Perhaps there’s a gap here between what’s often the hype of Green IT and practical considerations for data center managers when it comes to power and cooling management.

3) Where are you with server consolidation projects?

• No Plans: 3%
• Looking at it now and will start in next 2 years: 13%
• In process now: 58%
• Have already completed server consolidation project: 26%

Larger enterprises are consolidating servers with a quarter of attendees already having gone through the process at least once. And according to poll #2, this trend will definitely continue.

After Interop Las Vegas you may have seen our analysis of the data that we collected and delivered in our NOC view.  I thought I’d recreate the same data for NY and do a short comparison.

1) Like in Vegas, uptime for the network 100%.  This is no small feat considering that we introduced a new wrinkle in NY, taking down the primary NOC while the education portion of the show was still going on.  This was a forced failover to the backup systems, and it went flawlessly.  I’d like to give a little credit to EM7 on the 100% uptime as it caught a failover to battery power that allowed AC to be restored before a series of critical equipment would have gone down.

2) Again like Vegas, the average monitored device in the show network didn’t even hit 10% CPU utilization.  Still lots of computing overhead availabe in the show network.

3) The NY show network wasn’t nearly as busy as in Las Vegas, sustaining an average of only 27Mbps of usage (versus 56 Mbps) in Vegas.

4) Power consumption for the network and NOC in NY clocked in at 445kwh per day, about 25% less than the Las Vegas show.  This wasn’t because the equipment was any more power efficient, but instead because the show was smaller and therefore there was less network gear.

5) Finally, a stat we didn’t track too carefully in Las Vegas, but that I find interesting.  During show hours the wireless network average 1,100 users attached.  That’s a lot of people and a lot of wireless devices.

The good news is there was nothing too unexpected in the data, overall the smaller show led to a smaller number of tickets and smaller consumption of resources across the board.  We hope to have the opportunity to work with the InteropNet team again next year and take a look at this data year-over-year for each show.

• All my presentation on Slideshare.
  

LogLogic Lunch and Learn Presentation

• My other presentations on Slideshare

Interop NY 2008 was up considerably in size from the show in 2007.  According to Lenny Heymann, the GM of Interop, this is a trend that they expect to continue.  My personal experience was that the size of the vendors was also up this year.  I think there were so few startups that “Startup City” was pulled from the show completely.  In any case, the show floor was full and there was plenty of attendee traffic to go around.

Definitely helping out from a traffic and draw perspective was the addition of the Web 2.0 Expo - Interop was co-located with both Mobile Business Expo and the Web 2.0 show. It seems like that buzzword still hasn’t lost most of its luster.

From the InteropNet perspective, the main feeling was one of being rushed.  With the show only lasting two days, and the InteropNet team only having a couple of days of ramp up time, everything was compressed into a much shorter period than in Las Vegas.  While this would normally be a challenge, it’s an even bigger challenge at the Javits where the InteropNet team was allowed to do almost nothing ourselves because of union rules.  You’d be surprised how frustrated you can make a network guy who’s told that he has to stand there and watch the electrician plug things in, rather than just doing it himself.  The only thing faster than the InteropNet team getting the Interop NY network up, was my pedicab ride to the InteropNet Booze Cruise.

In any case, everything came off without a hitch, and EM7 performed flawlessly catching a couple of power outages that last day and alerting everyone before the batteries on the UPSes had a chance to run down.

Over the next couple of weeks I’ll analyze the data from the show to see how many tickets were handled, amount of bandwidth consumed, etc and we’ll do a comparison to Interop Las Vegas.

We’re (both ScienceLogic and me personally) looking forward to Interop 2009.

We chatted about the growth of the show and how much that growth reflects the industry itself. Since the bust earlier in the decade both Interop Las Vegas and New York shows have grown year over year – not just in attendees and exhibitors but in topics covered in the conference tracks. As any of us who are in the space know, it’s a rapidly changing market and Interop strives not just to cover the latest trends but also to get ahead of them while still making sure that they are relevant.

The show’s mission overall has expanded beyond “just” networking to cover performance and new trends like virtualization, cloud computing and SAAS that all affect network performance. It is a mirror for the demands on the network (and network admins) and the convergence we see going on that make managing the network so complex today.

Responding to criticisms about the lack of interoperability at the show, Lenny says, “Our special sauce is interoperability.” And in fact the expanded mission of the show ensures that there are more interoperability issues to deal with and he invites the community to comment and share feedback on this core mission.

Last, we talked about InteropNet. We’ve loved our participation in it this year for a variety of reasons – from the opportunity to work with other cool vendors in an intensive and real-life/real-time environment to the true sense of camaraderie and “getting it done” that everyone shares on the InteropNet team to the wonderful atmosphere of hard work AND hard play that you have to experience to believe.

We talked with Lenny about how he measures InteropNet “success” and the answer was illuminating. They’ve got high expectations at Interop; they expect the network to just work, so the focus is actually not on uptime and SLAs – that’s a given. “Nothing less than perfection works here.” (Let me tell you, after my horrible experience with the super slow and inaccessible network at the VMworld conference, that is definitely not always the case. Maybe InteropNet should sell its services…hmmmm…) Rather, it’s about being able to showcase technologies and strategies for networking and interoperability – or as we’re interpreting that, basically “walking the walk – which in the end is what InteropNet is all about.

See the full video here.

The Results:

Which hypervisor(s) are you currently using?

• 72% VMware
• 17% Using something else
• 9% Hyper-V and VMware
• 2% Hyper-V

(based on 46 responses)

So the VMware responses were in line with what we thought, although I’ve seen numbers up to 90% share of the market. And about 10% are at least playing with Hyper-V – pretty good numbers just a few months out from launch. But look at 17% using a hypervisor other than Hyper-V and VMware!

We know from talking with people that several brought up Xen. I have to tell you that other than from media and analysts, we never hear about Xen (Citrix), which is why we didn’t include it in the survey as a specific selection. Perhaps it took the introduction of Hyper-V, with the attendant marketing juggernaut, to break people of the VMware-only habit. Xen couldn’t really carry that “heterogeneous” hypervisor environment message on its own, but now that Hyper-V is available, the genie’s out of the bottle. Bears watching.

On another note: We were more successful in hanging onto our marbles on day two – people seemed more in tune to the poll and less focused on collecting giveaways than on day one! [Note: no attendees were irrevocably harmed during the execution of the polls. :)] At Interop Vegas, May 17 – 19, 2009, we’ll be about a year out from Microsoft launching Hyper-V and will make sure to ask the same question then to track changes in hypervisor adoption.

Dan described the Managed Hosting and colocation sector as “on fire” The sector is humming – incredible growth, outstanding execution, blowing away expectations. I must say, looking back 5 years ago after the tech bubble collapse, I can’t believe how strong the sector bounced back from those very difficult times.

His presentation was focused on a future, and a longer view for the industry. The HTS conference is packed this year with the largest attendance of Datacenter owners, Managed hosting and colocation companies ever to attend this conference.

• Demand steady or increasing in all markets, driven largely by capex constraints and greater awareness and choices.
• Supply is growing more slowly in the past 18 months as the credit crunch has hurt the ability of providers to expand ( it is very hard to get mortgages, loans only on new datacenter projects). Expansion build-out of existing shells is occurring, but very little on spec.
• Demand Growth of 15% in 2008. (Steady and increasing in the out years) However after supply growth peaked at 7.5% in 2007 supply growth now has slowed to 5%
• Dan believes that supply growth will pick back up again in 2011

Conclusions – supply is tight, demand is high and growing…this very good news for the industry.

• Some other trends:
  • The green initiatives are more than just a trend as datacenter owners who don’t figure out how to maximize power efficiency will be painted as villains.
  • Internet traffic and services consumption are linked as Internet traffic growth has been doubling every year (2005-2007)
  • Prediction: 2011 -2012 - internet traffic will get an exaflood – it is coming with a new breed of applications (set to boxes HD Video, games, etc.) that will drive new traffic patterns. Growth driven by consumer broadband + applications (HD video) applications, which in turn will drive demand for Managed Hosting / Colocation Services…

Managed Hosting Services Highlights

• Incredibly fast growth 30%+
• $10 Billion worldwide revenue by end of 2008
• We’ll keep growth pace until at least 2011
• Good news, Dan believes that fears about slowdown in growth are wildly overblown.

Why is managed hosting growing so fast?

• Demographic shifts – new breed of IT employees that embrace outsourcing
• Growth in internet applications (SaaS) The acceptance and growth of browser based applications has been enormous!
• Ambiguity between web hosting and managed hosting has turned positive

Dan’s Key success factors managed hosting and services

• High margin services – and not too many – it is so tempting in our day to day business when a customer comes along and wants to come and give us money for a unique on-off service… at this point the answer has to be no – or do it through a partner.
• High level of support delivery is critical – don’t cut pay in support people or outsource support to save a nickel… what you are selling is support. Keep doing this well or you will head into a bad place… just as examples in retail like Home Depot and others who have struggled with customer service challenges – the whole business starts to slide into the toilet… High levels of support delivers a strong word of mouth buying cycle

Final thoughts, the industry is healthy and will continue to thrive. Customers are looking for the one stop shop, one company that is a trusted advisor to the customer. As customers place more eggs in the Managed Service bucket, the industry will need to tighten-up those SLA’s. Today some parts of the industry have been getting away with loose SLA’s… as customers get more sophisticated and have more on the line, they will become more demanding and require robust multi-component SLAs and back-it –up.