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Is hardware back? Mobile and cloud technology offer clues

Jonathan Hassell | June 3, 2014
There are two clear catalysts for the resurgence of hardware in this era: mobile devices and the explosion of cloud computing.

If you haven't been living under a rock, you've heard pundits proclaim the death of the PC. As consumers move to tablets and stop buying laptops and desktops, and as companies pinch IT budgets even harder than they have in the past, it's easy to paint a doomsday scenario for hardware. Even the hardware companies play into this myth-look no further than AMD to see weakness portrayed. For many, it seems, hardware has lost its sexiness.

Not so fast. Hardware is back. There are two clear catalysts for hardware in this era: Mobile devices as well as the explosion of cloud computing as a way to host applications, infrastructure and services.

Let's unpack the promise of hardware from these two perspectives a little more.

The Cloud and Hardware: Servers Are the Lifeblood
It takes massive amounts of hardware to run cloud services at a scale. That's what astute folks call an F-A-C-T fact. Interestingly, though, saving on hardware costs began the whole cloud wave.

Cloud services began as a natural offshoot to virtualisation-which, ironically, was a way to squeeze more from existing hardware and buy less in the future. Abstract away the physical complexity and irregularity of the bare metal that make up servers and you could deploy virtual machines across physical machines and generally orchestrate data centre operations without really having to put Dell Server A in rack P connected to switch W.

The next logical action, once you have these orchestration capabilities, is to scale up capacity and offer services to paying customers, either within your own organisation through a chargeback scheme or to the general public as a public cloud service. Enter Amazon Web Services, Microsoft Azure and, recently, Google.

So how important is hardware to the cloud? It's essential. It's the lifeblood of these services. To continue innovating and offering high-quality, reliable services, you have to buy enormous amounts of hardware-to the point where the market threatens small and boutique cloud services firms.

Rackspace, a cloud computing company with a market capitalisation of US$4.4 billion, recently hired the investment banking firm Morgan Stanley to help it seek "strategic alternatives," which essentially means it's looking for a partner. Why? You need deep, deep pockets-a huge war chest-to compete at the same scale as Microsoft, Amazon and Google.

The following interesting statistics put this resource issue into perspective.
* Various Microsoft sources confirmed (on the condition of anonymity) that the scale of Microsoft Azure, the company's cloud computing service, exceeds 1 million physical servers. Moreover, the company's on the path to grow the service's capacity by 200 percent within a few years. That's a lot of hardware.


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