Ten, pretty good article here from the NY Times (hope they don't come after me for copyright reasons). It's about server farms. Intel is mentioned, but guess who's iron is most prominent? Well, I guess I gave it away. I haven't seen Mary lately, but I think we need to extend our bet to at least 2006, or something, before anything touches S390 at the top of the CPU food chain. This is not to say that there isn't tons of room to compete at many levels from PCs through various sizes of servers all the way up to (near) S390 class boxes in the internet server farm business. Heck, I wouldn't doubt if Intel installs a S390 or two along the way, if that turns out to be the right server, in a particular place, for the customer requirements.
Big, beefy men with beepers (third parapraph)! Geez, they even have big iron people typecast. Have to watch those cheeseburgers! But beeper? Never.
BTW, the black computers would be IBM (although some might be Sun, which are black and blue). Nah, IBM center would be all IBM.
The New York Times - May 19, 1999
Technology Section
Internet Fuels Revival of Centralized 'Big Iron' Computing
By Steve Lohr with John Markoff
SCHAUMBURG, Ill. -- As Walt Grom tours his domain -- row
upon row of hulking black computers -- he speaks of the
importance of "fundamental engineering disciplines" and "brute
force experience." The vast room is spotless, brightly lit and
chilled by air conditioning, an austere interior designed for the
care and feeding of big computers.
The huge datacenter, run by IBM, is one of the engine rooms of the
Internet, powering the World Wide Web sites and electronic
commerce operations of some 400 companies and organizations
including BankAmerica, Macy's, Goodyear and the National
Hockey League.
Such computer centers, known as server farms, are the
unglamorous side of the Internet revolution -- a world apart from
the young, urban culture of Web design artists with their tattoos
and earrings. Here, a no-nonsense style prevails, and the hallways
tend to be populated by big, beefy men with beepers.
"We're happy to do the plumbing," said Grom, who runs IBM's
server farm in Schaumburg.
Internet datacenters are sprouting up across the country in a sure
sign of the trend toward once again housing information and
computer power centrally -- a seeming reversal of the last two
decades of computing.
The personal computer has defined the industry's recent history and
how computers were used. As personal computers spread rapidly
in the early 1980s, they were seen as engines of individual
empowerment and decentralization of information. Millions of
islands of information were suddenly stored on desktop machines
-- knowledge residing in the spreadsheet, word processing and
database programs of individuals. It was a technical and social
repudiation of the previous three decades, dominated by
mainframes and minicomputers, a computing formula based on "big
iron" machines that held all the information.
But in an odd alliance, the Internet -- hailed as the technology
behind a new economics, tearing down old hierarchies and
flattening corporate organizations -- is fueling a recentralization of
information and a revival of big iron computing.
The Internet holds the promise of anytime, anywhere access to
information and entertainment delivered over powerful networks
to an array of information appliances like handheld devices, cell
phones with screens and television set-top boxes, not just personal
computers.
That makes the present round of information centralization very
different from the old days. The glass-house datacenters of the
1960s were controlling gatekeepers, with information rationed
from the center. Today's modern server farms, by contrast, are
powerful nodes on the Internet, making information more readily
available to individuals.
There are, to be sure, privacy concerns raised by the prospect of
creating increasingly large digital storehouses of personal
information. Those concerns, technology experts say, require
clear-cut corporate and public policies to protect privacy as
collecting, storing and distributing information becomes easier and
cheaper in a digital economy.
Still, even personal computer pioneers generally regard the shift to
Internet-based computing as an irreversible step toward efficiency
rather than a retreat from the information democracy they sought to
foster.
"People want to own their own information but they don't want to
maintain it, and that is driving the shift toward centralization," said
Adele Goldberg, a member of the team at Xerox Palo Alto
Research Center in the early 1970s that created the founding
concepts of personal computing.
Because of the Internet, companies are starting to embrace
centralized computing again for the first time in decades. "A real
mind shift is under way in corporate America," Scott Winkler, an
analyst at Gartner Group, a research firm, said.
In some ways, corporate America is following the Internet leaders.
For behind an America Online or an Amazon.com is a massive
arsenal of computing power. America Online Inc. supports its
service to more than 16 million subscribers -- with a million
people using the system simultaneously on many evenings -- with
two vast server farms in Virginia and a third one planned, a
$520-million project announced in March. (Such datacenters are
known as server farms because they are veritable crop-rows of big
computers that send, or serve, data out to users.)
"The good old economics of scale really do apply when it comes
to server farms," Marc Andreessen, the chief technology officer of
America Online, said.
The new model of computing -- a proliferation of information
appliances linked by the Internet to server farms -- has been called
the "post-PC era." For the post-PC vision to be fully realized will
take years, and billions of dollars of investment to build ultra-fast
digital networks, wireless technology and new kinds of handheld
and other devices.
And to say that computing appears to be heading toward a post-PC
era is not to say the PC will become obsolete anytime soon.
Indeed, the PC industry has benefited from the rise of the Internet
so far because the PC today is the principal access device to the
Net. Desktop alternatives to the PC like the "network computer,"
or NC, running only a Web browser for tapping into the Internet --
first proposed in 1996 by Lawrence Ellison, chairman of Oracle
Corp. -- have not yet slowed PC sales.
But the evolution toward the Internet model, most analysts agree,
represents the most significant change in the industry since the PC
placed the mainframe as the center of gravity in computing two
decades ago. The shift represents a daunting challenge to the big
winners of the PC industry, Microsoft Corp. and Intel Corp.,
whose software and microchips are the essential technology in
most PCs. Their high profit margins are expected to erode as
consumers increasingly use simpler, lower-cost devices to tap into
the Internet.
Both companies recognize the challenge and are responding. As
one step, Intel announced in April that it was planning a big move
into Internet services by building and running server farms. The
move seems a big departure for Intel, whose microprocessors
serve as the electronic brains of most PCs. But Intel sees the
server farms as part of its future of moving beyond the personal
computer to become a "building-block supplier" to the Internet
economy.
"The PC industry is changing drastically," said Andrew Grove, the
chairman of Intel, "and when it's over it probably won't even be
called the PC industry. It will become the Web infrastructure
industry."
Microsoft is preparing for the day when people may keep much of
their personal and professional information on large servers with
an initiative called Megaserver. The concept is that a person will
be able tap into a large central database via the Web to get e-mail,
personal schedules, news, weather updates and other information
anywhere, anytime.
Even Microsoft concedes the access device will not always be a
PC. "While the PC will stay central, we realize there is demand
for computing on non-PC devices," said Steven Ballmer, the
Microsoft president.
An early test bed for the Megaserver concept is Hotmail, a
Web-based e-mail system, which Microsoft bought for an
estimated $300 million in January 1998. Since then, the number of
users of the free e-mail service has jumped from less than 10
million to 40 million. With Hotmail, a person can retrieve e-mail
from anywhere with any PC or other device equipped with a Web
browser instead of being required to use a particular machine
loaded with one's own e-mail software.
"Hotmail has served as a big wake-up call for us, and we're
delighted that we bought it," John Ludwig, a vice president of
Microsoft, said.
Hotmail is supported by four large datacenters, and Microsoft is
using them as incubators for developing the heavy-duty software
needed to run server farms, thus improving the capabilities of
Windows NT, the company's most powerful operating system. But
Microsoft, Ludwig notes, is also working to improve the software
the user sees, making it easier to use.
"There's more software to write than ever before -- that's the good
news for us," he observed.
Microsoft added another centralized information service in April
when it acquired Jump Networks Inc., a Web-based calendar and
datebook system.
Microsoft's move came a few weeks after America Online
purchased an Internet calendar service, When Inc., for an estimated
$150 million. The start-up, which stores personal scheduling
information on a Web site, started its fast-growing service just four
months earlier.
Both companies are headed in the same direction, though from
different starting points, one a software giant, the other an online
service. Clearly, the line between software and services will
increasingly blur as the shift to Internet-based computing proceeds.
In an internal memo last fall titled "The Era Ahead," Bill Gates,
the Microsoft chairman, pointed to the opportunity as software
becomes more a services business. "We get a closer relationship
with customers and a predictable revenue model because they pay
us a regular fee for the service," he wrote.
But Gates also warned of the rising threat to some Microsoft
products likely to come from online services. "A company such as
America Online is in competition for all our
information-management software, because they can do it through
their servers," he observed.
In Silicon Valley, dozens of start-ups have been created as Internet
services to centrally handle personal information. The new
companies mostly focus on e-mail, calendars and back-up file
storage to insure information is not lost when an individual's PC
crashes.
"Many of these applications should be moved onto the Internet
because it is more reliable, available everywhere and cheaper,"
said Eric Brewer, a University of California at Berkeley computer
scientist who is a co-founder of Inktomi Corp., a Web software
company.
Building and running the computing engine rooms behind these
Internet services promises to be a good business for years to come.
Yet this behind-the-scenes technology business -- like the market
for Internet appliances -- will most likely be more diverse and
competitive than the bygone mainframe era, whose dominant
supplier was IBM, or the current PC era, ruled by Microsoft and
Intel.
The start of the trend back to central computing has already been
rewarding for the established producers of "big iron" machines
like Sun Microsystems Inc., a leader in computers running the
powerful Unix operating system, and IBM, whose mainframes have
been retooled as Internet servers. The big Unix and mainframe
server computers range in price from $100,000 to millions of
dollars.
"The big growth for us has been in everything-dot-com -- the
revolution in Internet commerce in all its forms," said Edward
Zander, the president of Sun.
Indeed, as more and more companies begin to view the Internet not
as an experiment but as a technology on which they run their
businesses, they need Web sites, e-mail networks and Internet
order-processing systems to be up and running around the clock,
seven days a week. That kind of reliable, industrial-strength
computing is the raditional bailiwick of mainframes and Unix
systems.
Still, PC technology is improving steadily and PC servers --
typically using Intel microprocessors and Microsoft's Windows
NT software -- are increasingly tackling heavy-duty computing
chores. Some heavily affecked Web sites, handling huge amounts
of business, are backed up
by server farms using mostly PC technology.
Dell Computer Corp., a direct marketer of PCs, says that sales
from its Web site are now running at a pace of $5 billion a year.
"Look at our Web site," Michael Dell, the company chairman, said.
"It's Dell servers running Windows NT. Yes, we have a way to go
at the high end of computing, but don't bet against the PC industry."
Gary Hargreaves does not much care about who supplies the
technology. He just wants it to work.
Hargreaves manages an electronic commerce project at Goodyear
Tire and Rubber Co. -- a company Web site set up to more
efficiently distribute and share information with its tire dealers.
The current system, which is gradually being phased out, is costly
by any measure -- time, paper or aggravation. Three thick packets
of documents are mailed out each week to Goodyear's 2,400
dealers in the United States and Canada. The company's call center
in Akron, Ohio, receives 2,500 inquiries a day from the dealers,
many of which are merely to obtain routine information on prices
and the availability of tires.
All of that kind of information -- along with sales reporting -- is
being transferred to the Web site. A third of Goodyear's North
American dealers are online and using the Web site, though the rest
are joining soon, and Hargreaves is already impressed by the
results. The call center is reporting fewer routine calls, he says,
and dealers say they are getting more timely information, which
helps them sell more tires and improve customer service. The
weekly mailings will be stopped at the start of next year.
For all the attention understandably focused on the meteoric rise of
online retailers and auctioneers, like Amazon and Ebay, the biggest
economic impact of the Internet in the next few years is expected to
be inside old-line companies like Goodyear -- boosting
productivity by electronically automating back-office transactions.
Though Goodyear has an in-house datacenter, it chose to let
outside experts provide the computing power for its Web site -- a
role known as hosting -- and run its electronic commerce network.
Many companies are making the same choice. That is why the Web
hosting business of both established companies like IBM and
AT&T, and newcomers like exodus Communications Inc. and
Verio Inc., is projected to grow from $696 million last year to
$10.7 billion in 2002, according to International Data Corp., a
research firm.
Internet companies like America Online, to be sure, will have their
own server farms. But others increasingly view computing as a
utility, a service to be purchased like electricity. Indeed,
technology historians note that when factories began using
electricity in the late 19th century, each had its own power plant.
Later, regional utilities were created and sold electric service to
the factories.
At Goodyear, Hargreaves seemed to apply the same logic to his
company's decision to have its Web site for dealers managed by
IBM at its server farm in Schaumburg. "We're in the tire business,"
he explained. "Why run the digital power plant ourselves?"
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