The past couple of years have seen rising interest in and considerable promotion of servers and appliances based on the ARM microprocessor architecture.
At first glance, the narrative makes some sense. ARM’s native performance and energy efficiency, when multiplied across hundreds or thousands of systems, looks impressive for supporting certain kinds of workloads common in Web 2.0, social networking and search sites.
That’s especially the case when ARM silicon is leveraged in concert with innovative fabric technologies, like the Freedom Fabric solutions that AMD acquired when it purchased SeaMicro in 2012, and the Fleet Fabric that Calxeda announced last October.
As a result, ARM has generated a good deal of heat among venture capitalists and other investors; at last count, over a dozen startups are developing ARM-based server silicon.
A Tough Sell in Business
Just before Christmas, though, the aforementioned Calxeda — one of the best-known and most highly regarded of these players — went belly-up and quickly shut down operations.
Finger-pointers were fast on the draw, claiming — with enviable 20/20 hindsight — that the company had been mismanaged, that it had a poor business plan and that it wasted resources developing solutions based on existing 32-bit CPUs when it should have bided its time until 64-bit ARM was available.
These explanations were lucid enough, but we think Calxeda and other ARM server players actually face a simpler challenge: The energy-efficiency that has been their primary focal point has long been a tough primary sell in business IT. That’s partly because such “soft” solutions typically require customers to make stiff up-front capex investments in order to capture longer-term opex benefits.
In addition, while “green” IT certainly feels good to many folks, its value can change radically due to energy availability, fluctuating power costs and local business imperatives.
‘Project Big Green’
That’s certainly been the case in similar past efforts, such as IBM’s “Project Big Green” initiative.
Launched in 2007, Big Green aimed to use new and existing tools to maximize the energy efficiency of enterprise data centers. Looking back, IBM was prescient in leveraging technologies and strategies that eventually became common currency across the industry, including robust consolidation through virtualization and granular energy usage monitoring.
Yet while the company gained considerable financial benefits by deploying these solutions in its own data center facilities, the broader effort never achieved the sort of commercial momentum the company hoped. That was partially due to timing: Many Big Green solutions arrived at market toward the end of the energy crisis of 2004-2008 as oil costs peaked and then began to decline.
That made power efficiency less compelling, but the situation was further complicated by the 2007-2009 recession, when even energy enthusiasts were reducing or halting IT investments.
The financial environment is obviously different today, but we believe that some recent events are likely to negatively impact the health of energy efficient IT.
For example, the ongoing boom in natural gas production in the U.S. has resulted in an abundant supply and falling costs. Just as importantly, utilities across the country have seized on the boom to justify retrofitting aging coal-burning power plants for natural gas, thus gaining efficiency and producing electrical power that is considerably “greener” than ever before.
That’s enough to throw ARM’s value proposition off-kilter. Then toss in the general unfamiliarity of new system architectures (necessitating retraining for data center staff), retooling of management processes, the need to invest in new compatible applications and continually constricting IT budgets, and ARM’s benefits begin to pale.
Finally, consider how Intel, AMD, Dell, IBM, VCE and others are rapidly improving the efficiency of fully established server architectures, and ARM’s opportunities begin to look positively ghostlike.
That doesn’t mean that these solutions are doomed, by any means. For businesses with considerable in-house IT talent and massive hyper-scale data center infrastructures — like Google, Facebook and Yahoo — ARM has been and is likely to remain of interest. They are, after all, the primary targets ARM players have been aiming for all along.
Nevertheless, we believe that Calxeda’s sad demise and broader market trends and events have measurably dimmed the likelihood that ARM will disrupt the IT infrastructure marketplace to the degree that proponents have hoped.