2008: Breakthrough Year for Containers?

Executives at Rackable (RACK) say 2008 will be a "breakthrough year for containerized data centers" and predict they'll ship at least 20 of them.

Rich Miller

February 7, 2008

3 Min Read
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Executives at Rackable (RACK) say 2008 will be a "breakthrough year for containerized data centers" and predict that the company will deploy at least 20 of its ICE Cube portables this year, and perhaps as many as 50. The company discussed the prospects for its container products during yesterday's earnings call with securities analysts.

Yahoo (YHOO) became the latest big Internet company to begin using a modular data center in a container, deploying one of Rackable's ICE Cube units to support the M45 Supercomputing Project with Carnegie Mellon University. The M45 project provides universites with access to a supercomputing platform which boasts 3 terabytes of memory, 1.5 petabytes of storage, and a peak performance of more than 27 trillion calculations per second.

Rackable also will ship three ICE Cubes to federal customers, and says there's more to come. "There is no doubt that from what we are seeing right now, '08 will be a breakthrough year in containerized data centers," Rackable CEO Mark Barrenechea said in the earnings call.

The focus on modular data centers is part of a broader shift at Rackable, which says it will have lower revenues in 2008 as it discontinues some low-margin deals. "It's obviously related to margin cost and distraction to other areas of innovation," said Barrenechea. "When I look out to new workloads, we want to focus our resources on new style data centers like the Ice Cube."

While companies always like to predict growth in critical high-margin business lines, Rackable's hopes for ICE Cube align with a broader transition in which container-based data centers are gaining traction.

  • Sun Microsystems (JAVA) has rebranded its Project Blackbox as the Sun MD S20, and announced its use by four customers, including the Stanford Linear Accelerator Center and Mobile Telesystems in Russia. Sun has also announced a project in Japan that will use 30 containers in an underground data center in a former coal mine.

  • A Bay Area startup is planning to deploy container-based data centers as part of a broader plan to build data centers on cargo ships.

  • Intel (INTC) indicated that it is taking a serious look at deploying portable data centers in shipping containers as it continues and eight-year data center consolidation project.

  • Most importantly, Microsoft (MSFT) has said it plans to use containerized data centers in its new Chicago data center. Some of the units will be able to manage power loads exceeding 1,000 watts per square foot. We're not the only ones who've noticed Microsoft's focus on containers. Forrester Research noted a recent statement by Debra Chrapaty, Microsoft's corporate VP of global foundation services: "Think containers. They're for real."

Rackable didn't get into details on customers. But Microsoft's plans may loom large in the fortunes of Rackable's ICE Cube modular data centers. Microsoft is clearly keen on containers as a solution to its high-density infrastructure challenges. It also has been a big customer for Rackable servers and racks, and has said that it is working closely with vendors on new approaches to the data center.

Is Microsoft the prospect driving Rackable's upper-end projection of shipping 50 ICE Cubes this year? Given the alignment of the two companies' interest in containers, it will be news for Rackable if it ships a bunch of ICE Cubes to Microsoft, or if it doesn't.

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