that’s not true. Almost certainly it’s not a good decision to pay more for servers in order to save density … which is why Amazon has approximately zero [high-density servers], Google has approximately zero, Microsoft has approximately zero. It’s not even a decision.”
Another bit of conventional wisdom, Hamilton said, is that getting electricity costs under control is of nearly paramount importance. While saving power is important, he said, it’s actually not worth cutting electricity use in every case.
“An efficiency technique that’s being used across the industry … is if you want to run an awesome, super-efficient data center, you virtualize all your workflows, pack them down into the smallest number of servers that they’re going to fit, and shut off all the other servers. The logic is that if power is the dominant cost, shutting it off is the absolute best thing you can do,” Hamilton said. But referring to his chart that showed servers as a much larger slice of costs, Hamilton said, “we should invert that. Shutting those servers off is not the right answer. The right answer is, if you can run any workload that’s worth more than the marginal cost of power, do it. It’s worth it.”
And that’s where cloud computing is coming into the forefront, he said, because a major provider like AWS can spread usage across a wide variety of industry customers and juggle the workloads to make everything much more efficient. And that’s where a cloud computing company can “steal” an idea from the financial industry, he said—spot pricing, where surplus commodities are sold right away to reap some revenue.
“We ask customers, ‘What would you be willing to pay to fill our valley for us?’ And people say, ‘Well, we wouldn’t pay much.’ That’s fine, that’s OK. And on they come. Spot pricing—super innovative. It’s one of the reasons I joined the company, actually. During my interviews, it was relayed to me, I went ‘Oh God, that’s brilliant.’ I just love it. Super exciting. Because it’s flattening out the workloads to get uniform distribution over the course of the day. This is the kind of efficiency it’s just not possible to drive in an individual company.”
Getting a little old-school mechanical, Hamilton also delved into power and cooling systems. Electricity distribution actually functions relatively well, he said, with some opportunities to get more efficiencies. But far more inefficient is the world of air cooling, which drives a lot of power expense. “The vast majority of the infrastructure improvements that have gone on in the last five years are right here,” he said.
The first step is to stop leaking air, and that’s “super easy,” Hamilton said. The second is something called air economization, which boils down to recognizing when you can take air from outside the building and not even chill it before blowing it across the server racks. “Jokingly, I refer to it as ‘open the window,'” Hamilton said. “It’s a really easy and obvious win. But believe it or not, prior to five years ago, it just was not happening. Any modern center that’s built well is doing it today.”
And even though it sounds counterintuitive, this still works in cases where the outside air is quite hot, Hamilton said, because exhaust temperatures on servers can be around 115 degrees. And he said the results are incredible.
“If you combine two tricks—one is air-side economization and the other is raise the data center temperature—in some climates, you can get away without any process-based cooling at all. None. So there’s no air-conditioning systems in some modern data centers. Huge savings in cost of power consumption,” Hamilton said. “The game is, how much can you raise the data center temperature? That requires courage, lots of data, and the ability to service systems.”
Another way Amazon is driving infrastructure savings is by the use of modular buildings, with an example shown off in slide No. 8 in Hamilton’s presentation. But a huge focus in the future will be driving down the cost of networking gear, like the switches and specialized software that connect servers with the rest of the world.
Hamilton said costs in the networking segment of the cloud computing industry are still too high because the vertical channels of providers haven’t been broken down yet—but he says that’s now becoming possible, and Amazon is making a strong move to help drive down prices.
“The model’s broken,” Hamilton said. “As the cost of servers goes down, they need actually as much or more networking than they ever have. The cost of networking gear is not going down. And so the combination of those two means the ratio of server to networking gear is going more and more to the networking side. And I can’t stare at that too long before we’ve got to do something, and so we are deeply invested in going after this one. We think it’s going to make a fundamental difference for customers.”
This dynamic is “probably the most important to me because it’s a chance for us to actually change the industry,” Hamilton said. “This is something that I’ve known about for 10 years, but it hasn’t been possible to fix.” So watch out, Cisco and Juniper.
