Feeds

Sun opens processor auction house

Bid on grid

  • alert
  • submit to reddit

7 Elements of Radically Simple OS Migration

You've got to give credit to Sun Microsystems for its raw ambition. Just one day after it officially started a $1 per hour grid computing plan, Sun revealed phase two of the project - a type of auction system that lets customers say how much they're willing to pay for a compute hour.

Sun has teamed with Archipelago Holdings - best known for its all-electronic stock exchange - to create a moving market for processors and storage. Customers will be able to bid on spare horsepower and capacity from Sun with the price fluctuating above and below the $1 mark. In addition, customers who already have fixed contracts with Sun for a given number of CPUs at the $1 rate will have a chance to sell any extra capacity to other users. The exchange will go live in a couple months.

"The exchange offers some flexibility," said Aisling MacRunnels, senior director of utility computing with Sun. "There may be times when the demand for CPUs is very large, and some companies may try and get a better price."

Now that you have the vision, let's take a collective deep breath and inspect the detail.

After weeks of hyping the grid project, Sun only launched the effort this week and did so in a piecemeal fashion. Sun eventually plans to operate six grid centers divided between the US, Canada and Europe that will house loads of servers and storage systems. At present, however, only a couple of these centers are completed.

The basic offers on tap are the $1 per CPU hour processing package and the $1 per gigabyte month storage deal. Customers who place massive orders can receive a cut rate.

The users send their data to Sun either for crunching purposes or storage. Sun executives believe banks, entertainment players and large businesses that do a lot of modeling will be the first to use this type of service. The idea being that processing information on Sun servers for $1 per CPU hour is cheaper than doing it in-house. So far, Sun has not revealed a single customer that has signed up for the grid package. It assures us that some clients are using the technology. They just don't want to reveal their names at this time.

One pundit, who shall remain nameless, brought up a solid point about this whole grid ordeal. Imagine Sun sold a stunning 1 billion hours worth of compute power this year. Such a high total seems highly unlikely but even that optimistic scenario would leave Sun with just $1bn in new revenue. That's a lot of investment and work to get a $1bn. How Sun must long for the days when the multi-million dollar servers went running out the door.

From that $1bn, you have to subtract the cost of building these compute centers, the networking costs Sun shells out to partners, marketing (lots of that) and any other partner costs - enter Archipelago or ISV. Our friendly pundit is skeptical that much will be left over from the $1b, but Sun begs to differ.

Sun has pegged the capital investment of a 6,000 processor grid center at $20m. If these processors hit 35 percent utilization, Sun expects to break even. At 55 per cent utilization, however, Sun is looking for gross margins of around 40 percent. Should Sun kick utilization up over 55 per cent, then it would be making serious gross margin headway over recent figures.

While 1bn CPU hours seems awfully high, Sun thinks the total is achievable. It points to an IDC estimate for 2006 that says the financial sector alone will need 10bn CPU hours. (Only the magicians at IDC know the formula used to obtain this forecast. Lord knows, they've had troubles with some predictions.)

Anyone with functioning synapses realizes there is no real way to predict how this grid gamble will play out. IBM seems to be giving Sun some grief about the idea, which validates it in a way.

But Sun should get credit for putting the product out there in the first place. Major and minor vendors have been beating the grid computing bandwagon for what feels like centuries. True enough, a few laboratories have linked up their data centers, and SETI is nice, but grid computing has not lived up to its marketing.

One of the biggest detractors from the concept has been the lack of large corporations giving grids a go. Sun is giving these companies a real chance to take a risk and "embrace the future." If you're a CIO that really believes in the grid, then here's your chance to a build an application that uses clusters well and send it off to Sun.

Bidding on CPU hours has an Enron-like "we'll make a market out of anything" ring to it, but it sure looks like a coming reality. Get ready to bid on the grid. ®

Related stories

Sun product discovered away from product launch
Sun server crushes IBM MP3 player
Sun researchers discover 'pricing' breakthrough
OpenSolaris makes Sun top donor of open source code
Net cheers IBM's rejection of Solaris x86
IBM admits to low-end Linux on Power assault
HP France plans February Opteron server party
Globus Consortium takes grid computing to the office

Best practices for enterprise data

More from The Register

next story
Microsoft's Euro cloud darkens: US FEDS can dig into foreign servers
They're not emails, they're business records, says court
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
VMware builds product executables on 50 Mac Minis
And goes to the Genius Bar for support
Multipath TCP speeds up the internet so much that security breaks
Black Hat research says proposed protocol will bork network probes, flummox firewalls
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Microsoft says 'weird things' can happen during Windows Server 2003 migrations
Fix coming for bug that makes Kerberos croak when you run two domain controllers
Cisco says network virtualisation won't pay off everywhere
Another sign of strain in the Borg/VMware relationship?
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?