1: Facebook bids adieu to HP, Dell, server OEMs. Facebook really is parting ways with traditional hardware OEMs. The company’s Swedish data center in Luleå will be its first to use “100 percent non-OEM” servers, Jay Parikh, Facebook’s VP of infrastructure engineering told Structure Europe attendees. That is bad news for the likes of Dell and HP, which compete aggressively for this kind of scale-out business.

(L to R) Stacey Higginbotham of GigaOM and Jay Parikh of Facebook JULIADEBOER PHOTOGRAPHY http://www.juliadeboer.com

“We have to fine-tune performance given the scale and real-time nature of our application,” Parikh said. “We want to push forward aggressively not only on the user experience but all the underlying pieces of infrastructure to support it. We can iterate with the hardware we’re designing and deploying. Most of the time it’s cheaper and consumers less energy. It’s better for the environment and better for us, gives us more flexibility.”

2: Europeans are cloud paranoics. The widespread contention that cloud adoption is slower in Europe than in the U.S. was reinforced by several speakers. One reason: Europeans are more wary of outsourcing than Americans. Another: They’re not wild about putting their data on a U.S.-based cloud given concerns over the USA Patriot Act and right now the major cloud services providers are U.S.-based, said Christian Echeyne, director of IT infrastructure technologies and engineering for Orange Business Services.

Ditlev Bredahl, CEO of OnApp agreed that cloud is a much harder sell in Europe because people view the term with distrust. “If you want to sell cloud in Europe, call it something else,” he said.

3: European cloud adoption is fragmented but coming. It’ll be tough for one huge cloud player to dominate in Europe the way Amazon has in North America, said Marten Mickos, CEO of Eucalyptus, an open-source cloud company. “There is too much fragmentation, too many local players. And, when companies here grow up, they tend to go global…  pan-European companies don’t happen often.”

“It takes an American company to build a pan-European brand,” he said. There are lots of soft drink companies across Europe but most of them remain local. For a pan-European brand, look at Coke, he said.

4: Cloud plus big data equals big opportunity. Cloud computing is a natural for storing reams of big data. But getting that data in and out of the cloud is tricky — and can be expensive. Ask anyone about their Amazon data transfer charges if you don’t believe this.

Michelle Munson, President, CEO, and Co-Founder, Aspera, Structure Europe 2012 JULIADEBOER PHOTOGRAPHY http://www.juliadeboer.com

Transporting all that big data can overwhelm traditional transport protocols like TCP, said Michelle Munson, co-founder and CEO of Aspera. Her company addresses that problem by providing a layer above TCP to facilitate fast transfers and makes that data — video for example — easier for cloud systems to ingest.

Once the transport problem is addressed, the floodgates are open for new sorts of big data processing applications, she said.

5: Amazon intends to be the Amazon of Europe. There was much speculation about what, if any, cloud provider could emerge to be the Amazon of Europe, given the aforementioned fragmented nature of the European market. Many agreed with the contention (see number 3 above) that it’s unlikely that a single player will replicate that heft — but that national telcos and big service providers will serve up cloud services.

(L to R): Om Malik, GigaOM; Werner Vogels, CTO and VP, Amazon Structure Europe 2012 JULIADEBOER PHOTOGRAPHY http://www.juliadeboer.com

It was clear from Amazon CTO Werner Vogels, however, that he sees no reason to cede the top spot. He promised a range of unnamed “unbelievable” services to come from Amazon. He said he sees no hesitancy among European businesses including financial institutions who seem to trust Amazon Web Services just fine with their workloads, thank you very much.

6: The cloud is open source — so far. While there’s been no Linus Torvalds of cloud, it’s safe to say that the foundation of today’s cloud computing infrastructure is open source — XEN virtualization, new-age MongoDB or Cassandra databases. And, of course, various flavors of Linux underly everything. There are four healthy contenders in open-source cloud platforms — CloudStack, Eucalyptus, OpenNebula and OpenStack.

Werker team (from left) Jacco Flenter, Wouter Mooij, Micha Hernandez van Leuffen, Benno van den Berg. (Lindsey Batema not pictured.)

7: Wercker’s SaaS deployment tool takes Launchpad prize. Amsterdam home-town team Wercker won the inaugural Structure: Europe Launchpad competition.  Wercker is building a SaaS-based continuous deployment system to keep up with the hyperactive pace of webscale development — where companies can develop and release hundreds — or more — software updates per day.

“Customers have trouble deploying code across a global footprint, everyone who’s doing development can benefit from this,” said Launchpad judge Sam Johnston, Equinix’ director of cloud and IT services.

Check out the Launchpad demos and judge’s discussion in the video below:

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In a conversation after our discussion onstage at Structure:Europe on Wednesday, Parikh said that instead of just using flash in places where you need performance, “like adding a Ferrari engine to your server,” the social network was thinking about other places it might be useful. He declined to go into more details but implied there were places one could replace hard drives with flash. Flash is common in data centers where performance matters, such as for database storage and for speeding up access to images. Facebook uses flash from Fusion-io is some areas of its operations where performance is essential.

But flash is expensive when compared to the traditional hard drives that most companies use for storage. Part of that expense comes from the work that goes into making flash memory — which was designed for consumers — dependable enough to handle enterprise data. Flash can be unreliable, and as its storage capacity grows, the number of times it saves or accesses data shrinks. And while the cost of flash is dropping, hard drives are still cheaper on a per byte basis.

But flash memory is also more energy-efficient when compared to hard drives. And several sources have told me that Facebook is building software that will allow it to take advantage of flash that has been rejected for high-performance use cases like memcached servers and instead use it for storing data that might otherwise go on hard drives. The software would map the unreliable areas of the flash memory and then avoid putting data in those spots. Other sources have mentioned that Facebook is building “flash appliances” which could be arrays of the rejected flash drives and the software to manage them.

And I think that kind of appliance or custom-flash array would be perfect for Facebook’s cold storage facility it has been talking up recently. The idea behind the cold-storage facility is that Facebook wants a place to efficiently and cheaply store those 220 billion photos it has — it gets 7 petabytes of new photos each month, Parikh said during our on-stage conversation at Structure.

Since after a few days the desire to access those photos diminishes, Facebook needs a place to put them that’s cheap but still accessible for those times users are feeling nostalgic. Cheap flash-based arrays would be perfect. Because the data in cold storage is infrequently accessed, the diminished read-write capability of the drives is less of a problem. Because flash has no moving hardware it’s not only greener, but its something that can be turned on instantly. In an interview with Wired Tom Furlong of Facebook said the equipment in the cold storage array would be designed to turn on and off when not in use.

So, Facebook officially says it wants to use flash in more places, while sources have been sharing details of Facebook’s flash appliances. I think that adds up to flash being a key component of Facebook’s cold-storage boxes. I reached out to Facebook for this story, but have not heard back.

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Pressed for details, Vogels demurred:  “I’m not going to tell you. If Steve Jobs can get away with that, I can.” So, if he’s not saying, we’re free to speculate. Here are five things to watch for from Amazon over the next few months.

1: More high-end analytics.

Within hours of Vogels’ appearance, Amazon announced that customers can now run SAP’s glitzy HANA in-memory database on Amazon for $0.99 an hour, plus $2.50 per hour if they want to spring for an extra-large EC2 instance. Elastic Block Storage (EBS) and data transfer fees are extra, which might seem like nickel-and-diming you if you don’t consider that a Hana appliance from Fujitsu can be had for “as little as” $12,000, according to this SAP blog.

This is an example of a third-party letting it’s IP run on Amazon’s marketplace. But also look for Amazon to offer more of its own analytics smarts much the way it’s come up the stack with higher end services like DynamoDB, Simple Workflow Service and Simple Queue Service, said Johan den Haan, CTO with Mendix, a PaaS provider based in Amsterdam.

2: Smaller bite-sized chunks of infrastructure.

If you want to rent Amazon compute firepower now, you pay by the hour. At least one new competitor — ProfitBricks – is selling smaller increments of scale-up infrastructure by the minute.  As GigaOM reported last month:

While Amazon’s cloud epitomizes massive scale-out architecture, ProfitBricks’ focuses on vertical scale. Customers can elect to use 1 to 48 processor cores and 1 GB to 196 GB of RAM which they can consume and pay for by the minute —  not by the hour. (Amazon EC2 instances come with 1 to 16 virtual cores and from 1 to 60 GB RAM.)

Update (November 14): There is other precedent for smaller chunks of consumed resources. CloudSigma, the Zurich-based IaaS provider used by CERN and the European Space Agency offers its resources in 5-minute increments.

Zev Laderman, founder and CTO of Newvem, a company that helps customers get the most out of their Amazon resources, is sure that smaller increments of consumption will happen soon.

“Some of that is already happening in the secondary market by companies like Strategic Blue and it also happened in the cell phone world when billing went from minutes to seconds,” he said.

3: More enterprise-y options.

Vogels disputed contentions by others at the show that big enterprises are not deploying important workloads on Amazon. I would agree that any CIO who says his company is not using AWS does not know what his developers are doing. You can run Oracle databases and financial applications or SAP All-in-One ERP on Amazon now, and things don’t get more corporate than that. Amazon’s sponsor list for its customer and partner conference in November includes such corporate stalwarts as BMC, CA and Red Hat.

4: Co-opetition/market segmentation with big software vendors.

Some see IBM, Oracle and others ceding the low-end of their markets —  the small and medium businesses or SMBs — to Amazon over time. Where both of these giant software vendors offer “Express” versions of their big-boy products to SMBs, look for that work to flow more to Amazon. The vendors will say this seeds the market for their more enterprise-focused, expensive and self-hosted enterprise editions of the same products.

5: Deeper integration and more PaaS capabilities.

Amazon dipped its toe in the Platform-as-a-Service market with Elastic Beanstalk already and now some see it designing a sort of super-PaaS where customers can one-stop-shop for variety of cloud services from Amazon and partners — all of which would be aggregated and run on — you guessed it — Amazon infrastructure.

Sharon Wagner, CEO of Cloudyn, which helps companies avoid over-provisioning cloud services, posits an interesting scenario. Amazon could try to play off both customer and vendor needs by creating an exchange of web services. “Vendors will integrate into AWS’ new PaaS and expose [application programming interfaces] that developers can use. Developers can develop apps using compute, storage, CDN, database, mail or any other service in that marketplace,” he said. Amazon would bill for the overall purchase, take its cut, then pay the other vendors, Wagner said of this sort of mega-Heroku model — which happens to mirror the model of Amazon’s big book-selling business as well.

It’ll be interesting to see if one or more of these scenarios play out at the Amazon Re:invent Conference in Las Vegas next month.

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“We see that fear in France and in all Europe — probably less in the Anglo-Saxon world and more in eastern and southern Europe — France, Italy and Spain,” he said, speaking at Structure Europe 2012.

Another gating factor on cloud: Europeans distrust outsourcing more than North Americans. “There is a delegation process — there’s less outsourcing in Europe than in the US and not just in IT by the way. Cloud is another form of outsourcing — it’s delegating something you were doing yourself to someone who can do it better,” he said.

European companies are very interested in cloud but they’ll watch how the early adopters fare before trying it themselves.

Another fun fact: Orange will leverage OpenStack, the open-source cloud,  Echeyne said.

Check out the rest of our Structure Europe 2012 coverage here. A video recording of the session follows below.

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Michelle Munson, co-founder and CEO of Aspera, told attendees at GigaOM’s Structure Europe conference that newer technologies like the ones her company provides are required to make up for the shortcomings of traditional internet transport protocols like TCP, and allowing all of that “big data” to be moved around more easily and more efficiently creates all kinds of new opportunities.

One of the most obvious areas where transportation of large quantities of data becomes a problem is the video industry, Munson said — a company like Netflix deals with hundreds of terabytes a month in streaming movies and TV programs, and it has to transcode that content into multiple formats and then ship it to the hosting networks that provide it to end users and customers. The company wanted to outsource its storage to Amazon’s S3 and also wanted to use outsourced transcoding services, but it couldn’t find any way of moving all of that data easily apart from shipping physical hard drives on trucks — so it contacted Aspera.

The company’s technology does two things, Munson said: it adds a layer on top of TCP that allows content like video and other things to be transmitted to the cloud more quickly, but it also transforms the data in a way that makes it easier for cloud providers like Amazon to ingest it and integrate it into their databases.

Making that process easier allows companies to develop new ways of using the data, the Aspera CEO said. For example, she said that the life-sciences research industry generates almost an order of magnitude more data than the video business — sequencing a single human genome can produce petabytes of data, and in the past that data was more or less trapped within a single research lab. With high-speed transport technologies, that data can be shared more easily and that allows for collaboration that might never have occurred before.

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A  valuable API could drive revenue by enabling new functionality or tap new data sources and surface that information in new or existing applications. “If you know Data.gov, they made public all sorts of sensor data through their APIs,” Mason said. “The government won’t innovate on that data but developers can use that along with other interesting information to drive great new applications.”

APIs need to be managed just like products, said Anant Jhingran, VP of Data for Apigee. “You need to follow the feedback and understand what kinds of business is being driven by it.”

Twilio, an API that enables developers to write telephony-enabled applications, was cited several times as a successful API.

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