Changing the World Through Innovation in Business and Technology

Ray DePena

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Silicon in the Cloud

The Semiconductor Industry and the Cloud

By now you have noticed the excitement of cloud computing, but have you noticed how few discussions have focused on the effect of the semiconductor industry and microprocessors on cloud computing?

For those readers that are not as familiar with the technology industry, the semiconductor industry, which you’re probably familiar with from the Intel inside commercials, drives some $250 billion in annual sales, influencing over a trillion dollars in electronics systems, and $5 trillion in services, or about 10% of the global GDP (that’s a U.S. trillion for our U.K. friends).

Microprocessors are a key underlying technology that enables virtualization, and ultimately facilitates the multi-tenant business model of today leveraged by Google, Amazon Web Services,, and other cloud service providers.

One of the key industry developments of the past decade was the development of multi-core processors.  Would the multi-tenant virtualization model of today be as efficient, effective, and economical with servers based on single core processors?  Would the cloud computing economic business model exist?

The advent of dual-core and quad-core processors have greatly improved the ability of server systems to handle greater application processing loads – giving way to server consolidation, and virtualization, as the information processing capacity of server systems increases.

If you agree with this view, then what does the future hold?  Well, drawing a path from Intel’s Core i3, Core i5 and Core i7, a family of multi-core processors, the List of future Intel microprocessors, and multi-core announcement, it’s not a stretch to say the near to mid future will continue to be multi-core computing.

In December 2009, CNET published this article, that states, “Intel debuted and demonstrated its Single-chip Cloud Computer (SCC) processor. The processor has 48 cores–24 dual-core “tiles”–connected with a high-speed mesh network. Intel wants the experimental chip, at least 100 of which it’ll distribute to researchers in 2010, to lead to new attempts to tackle multicore system and software design.”

Intel is hardly alone in these efforts, see Tilera, their TILE64, a 64-core 32-bit processor, and TILE-Gx, a 100-core 64-bit processor, and others continue to join the multi-core race.

We are still many years away from the practical commercialization and application of 48X, 64X, and 100X CPU technology for many reasons, not the least of which is designing operating systems and applications that can take full advantage of this technology.  However, in the near term, servers are moving from dual and quad-core technologies to more powerful hexa and octo-core technologies such as, the Intel Xeon DP (6 core), MP (8 core), and similar offerings from AMD in the Opteron, dual-, quad-, hex-, and octo-core server processors (see AMD’s list of future microprocessors).

So what does all this mean to you and your business?  What does this have to do with cloud computing?

Well, for starters, the level of technological complexity that you will have to manage in the future will be growing exponentially throughout this decade.  In addition to all the other benefits of cloud computing, it also abstracts that level of complexity for your business while simultaneously leveraging these types of technological advances.  In a healthy, competitive environment, that translates into lower costs for businesses adopting cloud computing services and solutions.

If your applications do not require this level of complexity, it means you have a great opportunity to consolidate and virtualize your data center environment whether you decide to move to the cloud or not.  Alternatively, if you do have applications with this degree of complexity, the cloud will be a great test bed for you.

Eventually, the designs of hypervisors, operating systems, and complex databases will evolve to take full advantage of these multi-core technologies.  That will mean an ever greater degree of server consolidation and virtualization.  In turn, the economics of cloud computing will continue to change to reflect those efficiencies making it even less expensive, more efficient, and more effective for you, your competitors, and new entrants, to compete.

Practical commercialization of the more complex multi-core designs may be 5 to 10 years away, but how long will it take your organization to be prepared culturally?  How long will it take your business to implement Business Process Management (BPM), Services-Oriented Architecture (SOA), and IT Service Management (ITSM) practices to prepare your organization for cloud computing?  How long will it take to position your enterprise for the agility and flexibility cloud computing requires?  How long will it take to rewrite your legacy applications for a cloud computing environment?

You may even consider recovering far-flung business and knowledge process outsourced functions (BPO / KPO) to deploy using a more cost-effective and responsive cloud computing model.  Granted, a proper analysis would have to be undertaken, and for some of you it will be more cost-effective to bring those functions back onshore, for others it may not be.

Even if you’re not convinced that the cloud is for your enterprise, hopefully we can agree on the value of business agility and efficiency offered by BPM, SOA and ITSM practices, and the benefits of server consolidation, aggregation, and virtualization.

So, what is your strategic plan to adapt your enterprise for the future of computing?

Will your organizational culture be sufficiently prepared, open, innovative, agile, flexible, and adaptive to take advantage of these changes?  Will your employees be motivated and empowered to take the necessary risks to get there?

In Innovation and Risk in the Clouds, I wrote about getting your organization ready for these coming changes.  In my next blog entry, I will write about getting ready to analyze, abstract and virtualize your enterprise for the cloud, leveraging Component Business Model (CBM), Business Process Management (BPM), Services Oriented Architecture (SOA), and Information Technology Service Management (ITSM) / ITIL, in order to provide innovative and dynamic service offerings to your clients and customers.

Whatever you decide to do when it comes to cloud computing and your business, I recommend keeping an eye on the developments in the semiconductor industry, and the impact those changes will have on systems efficiency and productivity across all industries translating into greater value for consumers in products and services, continuing to drive the global economy.

-Tune The Future-

More Stories By Ray DePena

Ray DePena worked at IBM for over 12 years in various senior global roles in managed hosting sales, services sales, global marketing programs (business innovation), marketing management, partner management, and global business development.
His background includes software development, computer networking, systems engineering, and IT project management. He holds an MBA in Information Systems, Marketing, and International Business from New York University’s Stern School of Business, and a BBA in Computer Systems from the City University of New York at Baruch College.

Named one of the World's 30 Most Influential Cloud Computing Bloggers in 2009, Top 50 Bloggers on Cloud Computing in 2010, and Top 100 Bloggers on Cloud Computing in 2011, he is the Founder and Editor of Journal,Competitive Business Innovation Journal,and Journal.

He currently serves as an Industry Advisor for the Higher Education Sector on a National Science Foundation Initiative on Computational Thinking. Born and raised in New York City, Mr. DePena now lives in northern California. He can be followed on:

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