Jonathan Schwartz on: $1/ CPU/ Hour — the Industry's First "Computing Plan"

At the dinner we hosted the evening prior to the keynote presentation of the Wall Street event, I had a chance to hear what was on the minds of nearly 20 CIO's and CTO's. Beginning to rebuild the dialog. (In one of America's great museums, btw.)

A few surprising things arose from the discussion my favorite: the CIO who said, "there are two issues really keeping me up at night. Number one, I'm out of space in my datacenter, computing equipment and storage have filled it to the gills — and real estate's not getting any cheaper; number two, I can no longer supply enough power to, or exhaust heat from the place. I feel like I'm running hot plates, not computers."

I asked him if he felt these were the issues he would've projected himself to be worrying about five years ago, "no way."

As you know, we've been working on both problems radical form factor compression, with radically lower power consumption. How low? A 32-way Niagara system, roughly the same performance of 32 xeon's, will consume... 56 to 60 watts. Less than your basic lamp. I feel great about our design center.

The other really interesting comment arose from our discussion of $1/hr for a Solaris OS/CPU (SPARC or x86).

As you know, we're fundamentally in the business of supplying technology to companies that, without question, customize our products for their businesses their own configurations, their own software stacks, their own "one of everything" datacenters (often doubling as computer museums). It's expensive for them to operate, and for us to support. This is the polar opposite of salesforce.com or Exult, to which businesses are now customizing their workflows to leverage the efficiency and cost reductions of a shared web service. Which allows salesforce.com and Exult to compress the traditional competition, save companies money and deliver better service. It's not for everyone, but certainly a massive and underserved market.

So when we announced our $1/CPU/hour pricing for our N1 Grid (as opposed to the ever so slightly different ones everyone seems to be building), we knew we'd strike a chord. Why build and operate what Sun could deliver as a web service? Priced by the drink, no less.

So we're now engaged with a growing population of companies to talk about leveraging an "on demand grid" for their workloads. We're also engaged with a number of CIO's who've asked their teams to benchmark their internal compute grids against $1/CPU/hr. All in, all up, at least there's now a benchmark. If they buy from us, they can simply turn the bill over to their internal clients.

And if nothing else, we've now put a stake in the ground. If you're paying more than $1/CPU/hour, odds are you're overpaying (and possibly overbuilding another customer told me utilization in their xSeries blade farm was below 10%!).

So the N1 Grid on demand now has a price: it's a buck an hour for the OS, a CPU, memory and storage. The computing industry's first "calling plan" has just been introduced. Now let the price wars begin!! :)

And for fans of such things, we've also begun discussing the evolution of a secondary market for compute power. How cool would that be...