A microserver uses a bunch of densely-packed, low-power chips. The configuration makes more sense for less demanding compute jobs, such as serving up contact information on one website user, than a server with a more capable brawny core, which tends to use much more power. Webscale companies such as Facebook and Yahoo want to add them to lower their operating costs.

Microserver shipments are going up faster than general servers and blade servers, according to IHS.

And the product sales won’t stop this year. The forecast shows shipments increasing substantially each year until 2016 (see data at left). By then, it will represent one-tenth of overall server shipments.

Still, those normal server shipments are huge; roughly 8.4 million servers were sold last year. The microserver market, for its part, is clearly still nascent. Nevertheless, the report does give an interesting insight: the microserver trend will only grow, not level out, through 2016.

The report attributes the shipment increase to the need for lower-performance, lower-power chips in the data center and in smartphones.

The billion-dollar question is, Which companies will capture the largest chunks of microserver revenue?

On the processor side, Intel is vying for a sizable cut. In December the company unveiled an Atom-based processor that uses just 6 watts, as my colleague Stacey Higginbotham reported. But last year AMD snapped up SeaMicro, and Rackspace has already certified the new SM15000 — available with Intel Atom, Intel Xeon or AMD Opteron processors — for use in OpenStack.

ARM could stand to gain from the microserver growth, too. In October AMD said it would license ARM’s chip technology to make chips for its own microservers. Plenty of other companies use, or plan to use, ARM’s intellectual property to build chips that could go in microservers, too, including Applied Micro and Calxeda, to name a couple.

This story was updated on March 7 to remove an incorrect attribution of one figure in the post to another source of market analysis, IDC.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cleantech
• Cloud computing’s impact on chip and hardware design
• Cloud computing infrastructure: 2012 and beyond

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• Cleantech and investment in 2013
• 12 tech leaders’ resolutions for 2012

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• The fourth quarter of 2012 in cleantech
• Cloud computing infrastructure: 2012 and beyond

Bryant also added that the SoC has already made it into 20 designs so far, and that an unnamed storage vendor even swapped out an ARM design for the Intel SoC. And that’s what this press conference was all about: “Today there is no enterprise-class ARM-based server chip,” said Bryant in response to a question, but that competition is coming next year and Intel can’t afford to get caught flat footed.

After a few years of actively denigrating the idea of lower performance but power efficient chips in the data center, in 2011 Intel finally got the microserver religion, releasing a product roadmap and predicting the segment might become about 10 percent of the server market. But other than make a special 64-bit part for SeaMicro, which shoves hundreds of low-power Intel Atom chips into a dense machine, Intel talked a good game but didn’t seem to be excited about the opportunity in the way that ARM or other chip vendors such as Tilera were. It even let its rival AMD walk off with SeaMicro.

As one of our regular commenters Lucien Armasu put it, Intel is facing the classic innovator’s dilemma, by which lower-cost, good-enough products are coming from the bottom of the market to cannibalize the success of its higher-dollar cores. Lucien wrote:

Anyways, the problem for Intel is that they are very reluctant to even promote Atom for micro-servers, and it shows from how they talk about it. They have a conflict of interest, because they’d rather sell the much more profitable “bigger” chips.

The reason why this is a problem for Intel is because ARM has absolutely no problem trying to sell ARM chips for servers. In fact they have all the incentive in the world to do it, while Intel has the least incentive to do it. As Clayton Christensen puts it, Intel will be “happy to concede the low-end, non-profitable (for them) market to their disruptive competitors”.

Intel was a case study in Christenson’s Innovator’s Dilemma, so its position here is ironic. But despite analyst worries that Intel will see its margins drop from the mid-60 percent range to the 50-percent range in the coming two years (in part because it will have lower-margin chips but also because its overall competition will be tougher with ARM-based cores in the market). But Intel did note in its presentation that a highly dense Atom SoC configuration in a rack would net more revenue than a rack of fewer Xeon processors (there were roughly a fifth of the number of Xeon chips in that rack configuration). It was a bit more vague though, on the margins.

“From an Intel revenue perspective, Xeon v. Atom doesn’t matter — in fact the Atom is slightly greater,” Bruyant said. ” Across our portfolio it’s still a very good margin for us and we’re absolutely fine if the Atom SoC does well for us.”

Intel brought out a data center executive from Microsoft and one from Facebook to tout the value of this Atom SoC, although it was unclear if Facebook was actually using the SoC in its environment. Frank Frankovsy of Facebook seemed unclear on the pricing and in a discussion about the potential benefits of using this SoC, he extolled the virtue of so-called “wimpy cores” for some jobs from a price performance per watt perspective and said, “Theoretically you also drop the cost of those chips.”

It’s well known in the chip world that Facebook, as a large buyer of chips, isn’t shy about testing products from alterative chip vendors such as Tilera in hopes of keeping pricing pressure on Intel. What’s more interesting is if other vendors start doing this. At that point, Intel may have the products and features on its chips that webscale customers want, but it will have to be competitive on price in a way that it really hasn’t had to be when it was just competing against AMD.

Facebook has said it will use these wimpy cores(one promising segment might be in its planned cold-storage architecture), but the jury is out on which vendor will win its business. Intel clearly intends to fight for Facebook and other webscale business, but when it does, it’s going to be facing up against some real competition — competition that it hasn’t faced before in the Intel/AMD world.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Power in the data center: Can it drive disruption?
• Infrastructure Q2: Big data and PaaS gain more momentum
• The fourth quarter of 2012 in cleantech

But there were also quite a few things that excited me this year, which in honor of our upcoming day of thanks, I’ve decided to call out. Here are 10 things to be thankful for in cleantech.

1). Obama won: Thank goodness. The entire cleantech sector dodged a bullet — and breathed a sigh of relief — as the votes rolled in and President Obama was re-elected for a second term. Obama delivered an unprecedented amount of cleantech funding: billions in incentives for clean power, electric cars and energy efficiency through the stimulus package. While the incentives won’t likely be as high as they were when the stimulus package was determined, if Mitt Romney had won, it would have likely been a real blow for cleantech. Romney is a self-professed coal-lover, who used speeches to point out misspending for clean power companies, and made a now infamous joke (post Sandy) about climate change.

2). New solid customer: Internet infrastructure: A growing amount of Internet companies — and web infrastructure providers — are looking for ways to add more clean power to their data center energy consumption mix, and are also looking for ways to be less reliant on the power grid. Some of the leaders in this area include Google, eBay, Microsoft, and Apple, and many of these companies have invested in both solar systems, energy efficiency technology and even fuel cell farms. Fuel cell maker Bloom Energy has managed to find a niche and growing market here.

There’s also a growing trend of IT companies looking to utilize low power servers — servers built off of low power cell phone chips. AMD this year acquired startup SeaMicro, and weeks ago AMD launched its SeaMicro low power server. Calxeda just raised $55 million to move toward commercializing its own low power server product.

3). Digital green, or clean web: Cleantech — from a VC and entrepreneur perspective — is in a transitional state. But in the meantime, clean technologies that are based on IT — like mobile, big data, cloud computing, software — are still seeing a lot of innovation and investment. Examples of startups in this sector include Opower, Nest, Solar Mosaic and Sungevity. Investors are calling this sector different things — Greenstart calls it digital green, Spring Ventures calls it Clean Web, and MDV calls it where cleantech meets IT — but it all means the same thing to them: a way to make money that more closely mimics making VC investments in web and mobile companies.

4). Smart thermostats: A particularly interesting area to me in terms of the smart grid and cleantech startups is the growing use of thermostats that are connected to the internet and that can smartly cut building energy use. Nest says it’s sold in the mid-hundreds of thousands of its learning thermostats, which can learn the users behavior and shave off energy consumption overtime. EcoFactor’s service is being used in a commercial deployment in Las Vegas, and Opower’s software is being used in three utility trials with Honeywell’s thermostats. Startup EnergyHub is also working on providing the software for smart thermostats.

Connected thermostats could be the answer to what utilities call demand response, which is basically turning down the energy use of its customers during peak times of day. The customers agree to the programs and can see lower energy bills. If the system is automatic and non-intrusive — which can be done using smart thermostat analytics — customers are far more likely to join the programs, and the utility’s results are better.

5). Tesla: Electric car maker Tesla has one of the most ambitious ideas in cleantech, and has actually — mostly — delivered on its goals. Yes, it was slow to get its estimated volume of Model S cars out to owners in 2012, but it’s on track to deliver its new estimates over the coming months. The company is also one of the few cleantech ideas that have captured the imagination of the public, and recently won Motor Trends’s car of the year award — the first time in history that an electric car won it.

6). The learning curve: Like I said, cleantech is in a time of transition. And I think that’s a good thing. As Greenstart founding partner Mitch Lowe said on a recent panel I moderated, fewer companies are being funded, but that just means the bar is higher. While bubbles are fun — like the one that grew in cleantech between 2006 and early 2008 — bubbles mean a lot of stupid money is flowing. Hopefully the smarter money of the next 18 months will deliver some breakthrough cleantech startups.

7). Cheap solar panels: One of the most dramatic clean power economic factors to emerge in 2012 occurred via super cheap solar panels coming out of China. While rock bottom solar panels make a difficult market for competing solar manufacturers, that ecosystem has created a boom in solar panel installations. In the U.S. there are now 250,000 rooftop solar panel installations, and companies like SolarCity are seeing large growth.

8). Wish for big ideas: Outside of cleantech, in the general tech and IT markets, there’s been a growing drumbeat of entrepreneurs and investors calling for greater attention on “big ideas.” While there can be easy money in social media and mobile apps ($1 billion for Instagram), there’s an emerging discussion around technology being used for higher aims, like solving problems for resource constraints. Investor Peter Thiel has been a chief champion of this approach and recently created a growth fund that will tackle big problems — the fund has already backed firms like compressed air energy storage startup LightSail Energy. They’re not calling it cleantech, but it is under the hood.

9). Meat 2.0: When the population explodes to 9 billion people by 2050, livestock for consumption could become a constrained resource — particularly because the emerging middle class in developing countries are increasing their meat consumption. That’s one of the reasons that innovation is occurring around fake meat. As Greentech Media wrote, paraphrasing a VC: “having a “fake meat” company in one’s VC portfolio was becoming a must-have, like having a cloud computing firm or a failed thin-film solar company.” Beyond Meat is one startup and Sand Hill Foods seems to be another. Modern Meadow Meat is a startup working on meat manufacturing, with backing from Thiel.

10). Collaborative consumption: And another sector of cleantech that’s not really cleantech: sharing goods. The next-generation of young people are less interested in owning things, and more interested in gaining access, or using things as a service. That makes the use of goods more efficient and sustainable. You don’t need to buy a car, because you can pay for access via Zipcar. There’s tons of startups in this space from giants like Airbnb, to new comers like electric scooter rental startup Scoot Networks.

Image courtesy if Aine D, waywuwei,

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• Cleantech and investment in 2013
• Green IT’s Q4 Winners: Wind Power, Solar Power, Smart Energy

AMD will license the ARM chip technology as part of a strategy that will bring cell phone chips into its servers. The company on Monday announced that it will design 64-bit ARM technology-based processors in addition to its x86 processors for multiple markets — hoping to cater to the needs of data center and cloud-centric companies looking for low power computing.

The move has been debated within AMD for some time, and represents AMD’s embrace of a heterogeneous computing strategy. The news also shows how AMD is distancing itself from its fellow x86 rival, Intel, and in reality, could prove to be AMD’s best chance to continue on as player in the chip market.

At a press conference on Monday AMD CEO Rory Read said, “Modern cloud is the killer app and it is bringing about the fastest growth across the industry.” He is convinced that ARM and AMD “can change the server and data center landscape.”

In a press statement to accompany the news conference, Reed added:

ARM, through its various partnerships, has been slowly gnawing at Intel’s dominance of the chip business, thanks in part to the booming demand for smartphones and other such devices. ARM has been lusting to take a piece of the server business, giving Intel more headaches. AMD, is a perfect partner for such an assault. The chips are likely to be made available in 2014, according to AMD executives.

We’ve been anticipating this move for some time, ever since AMD purchased SeaMicro, a startup that builds ultra-dense low-power servers for cloud computing that use Intel’s low-power Atom chips. SeaMicro uses x86-based chips for its boxes, but it has a technology that enables it to use any type of processor, including ARM-based cores.

The transition to alternative forms of computing in the data center has come about in some market segments, because certain jobs need less computing horsepower to complete their tasks and data center operators are looking for the most energy-efficient processor for the job. Just like you might not take your 12-cylinder Lamborghini to the grocery store to pick up a gallon of milk, the data center guys are increasingly seeing high-end general purpose CPUs as appropriate for some tasks, but overkill for others.

ARM has seen the opportunity for so-called wimpy cores, and has invested in Calxeda, a systems maker that is building a new type of servers using ARM-based SoCs. Dell, HP and others are also getting in on the ARM-server market with new products using chips from Calxeda, Marvell, Applied Micro, and perhaps even Cavium. Now that AMD has jumped on the bandwagon and with ARM servers in production later this year, getting ARM into the data center is looking more and more likely. Your move Intel.

Additional reporting by Om Malik.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cloud computing infrastructure: 2012 and beyond
• Power in the data center: Can it drive disruption?
• A 2011 Infrastructure Forecast

In addition, AMD announced new compute cards for its server tech, one based on AMD’s Opteron processor, and one based on Intel’s Ivy Bridge processor. “We see offering both Intel and AMD support for the foreseeable future,” said Andrew Feldman, AMD General Manager and co-founder and CEO of SeaMicro. Both the AMD and Ivy Bridge based tech will be available in November.

Feldman explained why AMD wanted to move storage closer to compute by saying: “With all this data you don’t know what you need.” Customers need these types of options in the early days of big data, said Feldman.

The announcement represents chip maker AMD’s goal to double down on the server market, which it needs to win over since it has failed in the mobile market. AMD’s new servers are aimed at the emerging webscale and cloud computing market, and are fundamentally different machines than those built by HP, Dell and IBM. Feldman said the machines are ideal for Hadoop clusters, and for virtualized environments like cloud computing.

In this era of webscale computing, power is a primary concern for data centers, and that trend is representing a rethink in the components and designs of data centers. ” SeaMicro pioneered the “micro server,” which uses a quarter of the power and one sixth of the space of a traditional server. AMD bought the company for $334 million in February.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech and investment in 2013
• Webscale and cloud are changing the server value chain. Who wins?
• Power in the data center: Can it drive disruption?

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cloud computing infrastructure: 2012 and beyond
• Infrastructure Q1: IaaS Comes Down to Earth; Big Data Takes Flight
• Infrastructure Overview, Q2 2010

Frank Frankovsky, VP, Facebook
(c)2012 Pinar Ozger pinar@pinarozger.com

Facebook has made waves by detailing its plans to use what an executive calls “cell-phone chips” — or “wimpy cores” — in its future data centers. Frank Frankovsky, the VP of infrastructure at Facebook, told me the social network plans to test such chips now and throughout next year, with plans to have them in production in 2014.

“We’re testing and generally bullish on the category, and based on some of the early testing our useful work per watt per dollar will improve, although that varies by workload,” said Frankovsky, “although our Hip Hop [loads are] the most CPU intensive and that hasn’t been ruled out.” HipHop is the open-source code Facebook uses to speed up the PHP code underlying the entire site.

But the question Frankovsky can’t or won’t answer is which of these cell-phone chips Facebook might adopt: a question that is hugely important, given the size of Facebook’s infrastructure and the influence it can exert on other companies as a founding member of the Open Compute Project. So let’s just do a quick rundown of the possible winners in this particular data center cage match.

Frankovsky was very clear in talking to me about what he thought of as a wimpy core. It doesn’t have to actually be an ARM chip to have the cell-phone-style architecture he referred to earlier. Intel’s Atom is still in the running. However, he did say graphics processors aren’t something he’s considering, because they don’t make sense for his workloads. On the issue of whether 64-bit-compatible chips would be in store, Frankovsky hedged, refusing to outright commit to 64-bit, but he said the social network doesn’t “plan to adopt anything that’s not 64-bit.”

As for timing, he said the testing is ongoing with some adoption in the latter half of 2013, and “if all the stars align then [Facebook's adoption] will be a material impact to the market” by 2014. So which companies might see the impact of Facebook’s adoption of wimpy cores? Let’s run down the contenders.

(L to R) Andrew Feldman of AMD, Barry Evans of Calexda, and Guido Appenzeller of Big Switch Networks
(c)2012 Pinar Ozger pinar@pinarozger.com

Calxeda. This Austin, Texas–based startup counts Frankovsky as an advisor of sorts, but its product — a system that combines several ARM-based cores and a proprietary networking chip so those cores can communicate — is just off the line. Plus, it will have to wait until 2013 or 2014 until its systems can support the 64-bit instruction set. This is within the Frankovsky timeline, and the workloads he has mentioned are ones where Calxeda is trying to establish tests and benchmarks.

Marvell/Dell. Marvell is also using ARM-based cores in its Armada line of chips, and Dell has picked up those chips to start testing a line of servers. Dell announced the line in May, and it is already a huge supplier of hardware for Facebook as well as a participant in the Open Compute Project that Facebook founded. Plus, Frankovsky is a former Dell employee from the DCS group, where Facebook bought a lot of its hardware.

Intel. Frankovsky was very clear that he regards Intel’s Atom core to be in the class of wimpy cores he is considering. And while many may scoff, Intel has done a good job reducing the power consumption of its x86 chips for the Atom line, unveiling the Centerton chips this month that will ship inside HP’s low-power servers (HP also has a deal to bring Calxeda’s systems to market). The new systems will be able to do as much work as a traditional 150-watt system in a 12-to-14 watt envelope. Plus Intel already makes a 64-bit Atom part designed for SeaMicro, a company building low-power microservers. Intel has an existing relationship with Facebook, the dominant x86 architecture and a 64-bit part in the market.

AMD. This is a bit difficult to assess, given that prior to buying SeaMicro in March, AMD didn’t really have much of a story or option for wimpy cores. It still doesn’t, but buying SeaMicro, which uses Intel’s Atom part, gives it an entrée into the market that it will press. Plus, when I listed the competition Frankovsky told me, “I wouldn’t leave AMD out of this race either.”

Tilera. This Cambridge, Mass.–based startup has been building massively multicore chips designed for big data and cloud workloads since 2004. It has an advantage of having more than 10,000 existing cores running in production at unspecified customers, according to Ihab Bishara, the director of server solutions for Tilera. It has also been tried by Facebook in its 32-bit iteration and won favorable comments from the social network. Cynics have claimed Facebook did that test just to keep Intel on its toes, but Tilera has the first non-x86, 64-bit-based server available in the market and is already deployed in servers in 3 of the top 20 websites.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

At the GigaOM Structure Conference last week the main hall was packed for Intel’s VP of Cloud Infrastructure Jason Waxman’s talk about brawny vs. wimpy cores. Waxman opened his presentation by referencing the last couple years’ academic paper wars, which have pitted Google’s Urs Hozle, arguing that brawny cores like Intel’s Xeon chip would prevail, versus Facebook/Tilera which published a paper showing that multicore Linux based Tilera processors were superior to x86 processors on performance per watt measurements.

But Waxman wasn’t really there to take sides. He was there to argue Intel was repositioning itself as the chipmaker of choice, capable of offering its customers both brawny and wimpy cores.

To step back a moment, we have to remember there was a time when all Intel cared about was proving that it had amazing single threaded performance with the best clock speeds. The company’s tone has shifted dramatically over the past couple years as the way computers are used, exemplified by the explosion of smart phones and tablet computing, has changed how computing is done on the front end and how data centers function on the back end. In both arenas, power efficiency has become paramount.

And the controversial question on everyone’s minds is would hyperscale data centers like those at Facebook, Google and Amazon be willing to adopt ARM or even Linux based multi core processors in their data centers with the hope that the lower power servers were better suited for executing a higher volume of similar compute tasks while saving on power costs. In the case of Amazon and Facebook, there’s clearly testing going on and a general openness to the idea of new processor architecture, not to mention that even stalwart of the x86 days AMD has indicated it’s not beyond licensing an ARM core to build a better microserver processor.

But in the last six months, Intel has shown greater focus on the low power end of the game, tacitly accepting that there are going to be data center engineers who want to use highly parallelized processing on lots of wimpy cores, regardless of whether there are inherent software challenges in doing so. In May, it introduced the lowest power Intel Xeon single socket server build ever, a reasonable 17 watts, and it’s benefited from OEMs like HP’s recent decision to roll out low power servers built on Intel’s brand-new 64-bit Atom Centerton chips, which should use about 12-14 watts per server. A typical server build can run over 100 watts.

Recently acquired by AMD, SeaMicro has always built its low power servers on Intel Atom chips, and subsequently Xeon chips. CEO Andrew Feldman has often said he went with Atom chips precisely because he didn’t want to ask his customers to start recompiling code, what they’d have to do with ARM or Linux processors. And that’s the implicit pitch from Intel’s Waxman, that it too has wimpy cores that can be optimized. Waxman took the opportunity at Structure to demo a Centerton Atom chip, showing its power efficiency at around 9 watts, as well as announcing the next generation of Intel Atom chips, called Avoton, which will be a System on a Chip (SoC) built on new 22nm fabrication tech.

If there’s a message in all this, it’s that wimpy cores will have a place in the data center and that it’s likely that Intel is seeing demand out on the horizon for lower power chips. More importantly is the recognition that there are a variety of compute tasks, some of which really shouldn’t be running on brawny cores. ARM server startup Calxeda said last week that ARM and x86 could co-exist in the data center with specific tasks related to cloud processing off loaded to ARM processors the way graphics processing units (GPUs) from the likes of Nvidia have been paired with CPUs for many years.

The server is being pulled apart and rebuilt because major buyers like Facebook with sophisticated engineering teams want hardware that’s optimal for every compute task. And the companies that win will be the companies that give the customer what they want. Even Intel realizes that.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Can Intel reposition itself for the low power server?
• The fourth quarter of 2012 in cleantech
• Infrastructure Q1: IaaS Comes Down to Earth; Big Data Takes Flight