IBM and Dynamic Infrastructure Doug Neilson, IBM Systems GroupMarch 2009

IBM’s Smarter Planet Strategy

“Every human being, company, organization, city, nation, natural system and man-made system is becoming

interconnected, instrumented and intelligent. This is leading to new savings and efficiency—but perhaps

as important, new possibilities for progress.”

2

Building a smarter planet

3

Questions, questions, questions….

SmartWorkSmartWork

Green & Beyond Green & Beyond

New Intelligence

New Intelligence

How can we work smarter supported

by flexible and dynamic processes modeled for the new way people buy, live

& work.

How can we take advantage of the

wealth of information available in real time from a multitude of sources to make more intelligent

choices?

“Data is exploding and it’s in silos”

“New business & process demands ”

“Our resources are limited”

I Need InsightI Need Insight I Need to Work Smart

I Need to Work Smart I Need EfficiencyI Need Efficiency

Dynamic Infrastructure

Dynamic Infrastructure

How do we create an infrastructure that

drives down cost, is intelligent and secure, and is just as dynamic

as today’s business climate ?

“My infrastructure is inflexible and costly”

I need to respond quickly

I need to respond quickly

How do we drive greater efficiencies, compete more effectively, and

respond more quickly by taking action now on

energy, the environment, and

sustainability.

Let’s discuss each of these in a bit more detail.

IBM’s smarter planet vision

Four major IBM initiatives

New Intelligence

New Intelligence

SmartWorkSmartWork

Dynamic Infrastructure

Dynamic Infrastructure

Green & Beyond Green & Beyond The world has become flatter

and smaller. Now it must become smarter.

Dynamic Infrastructure

Dynamic Infrastructure

How do I create an infrastructure that drives down cost, is intelligent and secure,

and is just as dynamic as today’s business climate ?

Evolving Dynamic Infrastructure

What does it look like?

…delivers superior business and IT services with agility and speed.5

Enables visibility, control, and automation across all business and IT assets.

Transforms assets into higher value services.

Highly optimized to achieve more with less.

Addresses the information challenge.

Leverages flexible sourcing like clouds.

Manages and mitigates risks.

Starting with Advanced Technologies…

Multi-Chip Module

500GHz SiGe Chip

Cell Processor

Z6 Quad-core

Power Systems

Racetrack memory

… Building Innovative Products

Power 6

Enterprise X-Architecture

Storage

virtualization

System z10

iDataplex

Roadrunner

XIV Storage

Building a smarter planet

IBM Roadrunner, at 1026 Teraflops

Armonk, NY - 09 Jun 2008: The world’s first “hybrid” supercomputer; designed to operate at one petaflop

Roadrunner is the first-of-a-kind design, the Cell Broadband Engine® will work in conjunction with x86 processors from AMD®.

Roadrunner connects 6,562 dual-core AMD Opteron® chips with 12,240 Cell chips (on IBM Model QS22 blade servers). The Roadrunner system has 98 terabytes of memory.

Roadrunner operates on open-source Linux software from Red Hat.

Roadrunner’s hybrid format draws power (2.35 megawatts) and delivers world-leading efficiency – 437 million calculations per watt.

Cost was about $100 million

Using iDataPlex the Indiana University School of Informatics and Technische Universität Dresden (TUD) were awarded first place in the SC08 Cluster Challenge, for leading-edge, energy-efficient high performance computing at Super Computing 08!

IBM iDataplex

http://insidehpc.com/2008/12/08/2008-cluster-challenge-results/

Super Computing 2008 Cluster Challenge Winner

Even the Mainframe is a Cloud differentiator

Lack of major vendors

Mobility back in-house

Worried cloud will cost more

Not enough ability to customize

Integration within-house IT

Availability

Performance

Security

74.6%

80.3%

81.1%

83.3%

84.5%

84.8%

88.1%

88.5%

65% 70% 75% 80% 85% 90%

Operational efficiency is key to success!

$0B

50

100

150

200

250

300

1996

1998

2000

2002

2004

2006

2008

2010

New Server Spending

Server Mgt and Admin Costs

Power and Cooling Costs

Cloud/SaaS providers are profitable through customer volumes, but the cost profile may be prohibitive

Operational expense is one of

the core z strengths

The technical challenges of CC play to z strengthThe expectation of cloud consumers is

significant and providers need simple consumable ways to meet technical challenges without driving up server counts and the operational expense

associated with more servers.

Storage

Network Edge/Web Application Data/Transaction

Infrastructure – this is so 1980’s…

… We can do better now

Shared Virtual Network

Network, Edge, Web, Application

Application, Data, Transaction

Shared Virtual Storage

• 1W of application computing requires 27W of power

• Insufficient Cooling and Insufficient Power are key data centre issues

• Energy costs consume approximately 10-15% of most IT budgets and rising**Source: Springboard research

Data Center IT Resources Utilisation

70%70% 30%30%

Power supply, memory,

fans, drives . . .

Processor

80%80% 20%20%

Idle Used

IT Load

Power distribution and Cooling

55%55% 45%45%

+1 W equiv. used ressource5 W equiv processor16 W equiv IT power27 W data center X1.7 x3 x5

The Energy Question…

Can Software make you Greener?

Reduce use of paper by enabling business processes to use

eForms and images

Shift workloads to underutilized servers to reduce energy and

floor space needs

Compress your data to lower storage and server needs

Optimize HVAC for hot spots to reduce energy consumption

Reduce business travel by using online collaboration

Reduce commuting with online collaboration and increasing work from home

Virtualize the infrastructure to reduce amount of IT staff needed

to maintain servers

Consolidate and Virtualize to eliminate floor space and compute infrastructure

Schedule execution of workload to off-peak hours to use lower cost energy

Optimize business processes to reduce energy footprint and costs of operations

Turn the power down when work (transactions) slows down

Optimize applications to reduce needed IT resources and energy

Dramatic savings in power, heat and space…

0

200

400

600

800

1000

1200

1400

500 1000 2000 5000

# Servers

Sq

M

02004006008001000

12001400160018002000

Kw

x86 Sq M

z9 Sq M

x86 kW

z9 kW

… up to 90% saving. With tradable carbon savings

IBM Dynamic Infrastructure Data Centre Strategy

Virtualization

Consolidation

Business resiliency and security

Rapid service delivery

Software resiliency

Pooled shared environment

New Enterprise Data Centers

New Enterprise Data Centers

Traditional Data CentersTraditional

Data CentersWeb 2.0

Data CentersWeb 2.0

Data Centers

New economics

Rapid service delivery

Aligned with business goals

IBM’s own smart transformation

1997 Today

CIOs 128 1

Host data centers 155 7

Web hosting centers 80 5

Network 31 1

Applications 15,000 4,700

From 2002 through 2007, IBM's own IT investments delivered a cumulative benefit yield of approximately $4 billion. For every dollar invested, we saw a $4 cumulative benefit.

IBM IT Transformation

Cloud-enabled on demand IT delivery solution

Self-service for 3,000 IBM researchers across 8 countries. Real time integration of information and business services.

The virtualized environment will use 80% less energy and 85% less floor space.

2X existing capacity, no increase in consumption or impact by 2010.

Project Big Green

Consolidation and virtualization - thousands of servers onto approximately 30 IBM System z™ mainframes.

Additional virtualization leveraging System p, System x and storage across enterprise.

Substantial savings being achieved in multiple dimensions: energy, software and system management and support costs.

Data Center Efficiencies Achieved

Central Switch

VPN Router

B

Customer DVariable

Customer CVariable

Customer B (night)

Customer E (day)

Customer A (day)

FE

Customer F (night)

C

A

D

C

A

C

B

Dynamic

D

Dynamic

E F

Computing on Demand models Dedicated

Custom Environment – choice of data center, servers, storage, dedicated switch, WAN/LAN High Availability Network

Dedicated resources: 1-3 year commitment Leased by IBM Global Financing

Variable Utilize CoD Center infrastructure Virtual clusters dedicated to one client at a

time Automated network and server provisioning Reserve by the week; “Pay for use”

Dynamic Utilize CoD Center infrastructure Virtual clusters dedicated to one client at a

time Automated network and server provisioning Reserve by the hour; “Pay for use” Ideal for Intraday and post trading workloads

Compute Node

Storage Nodes + Storage HW

Management Node

Internet

IBM Computing on Demand Centres

Massive infrastructure of over 13,000 CPUs, 56 TB of storage

International Access

US, Canada, Japan,

Europe

London

7,800 CPU’s

Dedicated

New York

5,500 CPU’s

Dedicated, Variable, Dynamic, Testdrive

Tokyo,

150 CPU’s

Dedicated, Testdrive

Future Locations ...

based on client needs

Evolution of Cloud Computing

Grid Computing

Solving large problems with parallel computing

Made mainstream by Globus Alliance

Software as a Service

Network-based subscriptions to applications

Gained momentum in 2001

Cloud Computing

Anytime, anywhere access to IT resources delivered dynamically as a service.

1980

1990

2000

2007

Utility Computing

Offering computing resources as a metered service

Introduced in late 1990s

Why Cloud Computing…Different PerspectivesIT Analysts:-Variable pricing-No long term commitments

-Hosted, on dem. provisioning

-Massive, elastic scaling-Standard Internet technology

-Abstracted infrastructure-Service-oriented

Financial Analysts:-Utility pricing-Hosted, a-a-s provisioning-Parallel, on demand processing

-Scalable-Virtualized, efficient infrastructure

-Flexible

IT Customers:-Flexible pricing / business models

-On demand provisioning-Unlimited scaling-Secure infrastructure-Flexible

Market:-Pay by consumption-Lower costs-On demand provisioning-Grid and SaaS combination

-Massive scaling-Efficient infrastructure-Simple and easy

Common Attributes of CloudsElastic scaling

Rapid provisioningAdvanced virtualization

Flexible pricing

Source: IBM Corporate Strategy analysis of MI, PR, AR and VCG compilations

Business Interest is shifting…

In a decade, the majority of IT opportunity will be in the cloud

Traditional IT market will be compressed

Sources: IBM Market Intelligence; “The Cloud Wars: $100+ Billion at Stake”, Merrill Lynch, May 2008

*IDC, October 2008

IT Growth

$ in billions

Merrill Lynch has ‘guesstimated’ apps and platform cloud computing to be a $95 billion annual opportunity within the next five years.

Near term, a large portion (~$50B) of new IT spending will be on cloud computing

~10% of cloud spend is on servers; flat from ‘08 – ’12 with market growing at ~27% CAGR*

IBM Cloud Computing Centres

Planned

Active

Seattle, WA

San Jose, CA

Wuxi, China

US, East Coast

Dublin, Ireland

South Africa

Hanoi, VietnamBangalore, India

São Paulo, Brazil

Seoul, S KoreaBeijing, China

Middle East

Tokyo, Japan

Business benefits of Cloud

Agents End Users SupportCommunity

Crowdsourcing

Customer Care Payments Int. Risk Mgmt.

Retail Banking Trade & SC Finance Single Euro Payments Mobile Banking Front Office Optimization

InfrastructureServices

PlatformServices

ApplicationServices

BusinessServices

PeopleServices

Data Mgmt. Virtualization Workload Mgmt SLA & Capacity Provisioning Security Monitoring

Dynamic Provisioning Process & Policy Mgmt. Problem & Change Mgmt.

Service Cloud Business & Operations Support

Fulfillment Assurance Billing

Mashup ServerUser Manager Service/Software

Catalogs

Open SOA Foundation (WS Framework, Service Bus)

CiC Design Space B2B

Pa

rtnerships

Exp

erie

nce

Man

agem

ent.

Industry Frameworks & Information Foundation

Distributed Cloud Computing Services

A dynamic infrastructure is a journey…

…these interrelated initiatives can provide the DNA needed to thrive in a smarter planet.

25

IBM business know-how

IBM Business Partners, Systems Integrators (SIs) and Independent software

vendors (ISVs)Global Engineering

Solutions IBM Global Financing

IBM Software GroupGlobal Technology Services (GTS),

Global Business Services (GBS), and Technical Services

Industry Innovation Centers

. . . our innovation can help enable your innovation.