Maximizing Value of the Distributed Edge

By Dean Nelson CEO, Virtual Power Systems

Published in Issue 5 | December 2020

Throughout my career I have focused on driving efficiency, high performance, and scale through standardization of the foundation layers of digital infrastructure—data center, hardware, network and infrastructure management. In 2007, I celebrated 14 years at Sun Microsystems by launching the Performance Optimized Datacenter (POD), a modular architecture that enabled any rack of any density to be placed anywhere. This solution had blossomed from internal data center projects including the launch of the Sun Grid in February of 2005. For those who don’t remember those glory days, Sun launched the $1 per cpu-hour grid to enter the burgeoning new industry wave we now call “cloud.” Sun was a year ahead of AWS. While Sun had superiority in hardware, operating system, and enterprise solutions, they missed the market opportunity to provide a platform that would make it easier for customers to migrate to their offering. AWS got it right, and as everyone knows, the rest is cloud history. However, I believe there is one concept from Sun that is even more relevant today. David Douglas Sun’s first Chief Sustainability Officer, said sustainability is about balancing economics and ecology. They can, and should be, complementary. You don’t have to sacrifice one for the other. I’ve applied that logic ever since. When I joined eBay in late 2009, they were at the beginning of a turn around. Fast forward three years and we had grown the infrastructure 4x and the company was continuing double digit revenue growth. My team was able to slash the internal unit costs of foundational infrastructure by 50%, while delivering some of the highest performing deployments in the world. Among my favorites were the modular data centers we installed in Phoenix that achieved PUEs of 1.018. That meant >98% of the power went to useful work.

From my perspective, the combination of VPS, EDJX and ITRenew creates a competitive advantage unlike anything we have seen before. Software developers and CDN users around the world will be able to leverage a costoptimized, low-carbon, highly efficient platform alternative to cloud.

How did we do that? Alignment and standardization. The data center, hardware, and network elements acted as a system versus discrete functions operating in silos. At that time, standardization and rack-and-roll had been adopted in many places, including Facebook’s launch of the Open Compute Project (OCP). Much to the dismay of leading OEMs, Facebook decided to release their designs allowing anyone to benefit from their efforts (thank you, Frank Frankovsky!). OCP had a major influence on the industry, but in my humble opinion they missed one thing—price. Adopters could not achieve the same discount rates as Facebook because they didn’t have the same volumes. This gave me an idea. What if we could create a buyers coop with what we had done at eBay? If others could adopt the standard configs, we could all buy together and have the same benefits. Fast forward to 2014, and the idea had solidified.

On a sunny September afternoon in San Jose, my business development partner and I pitched the idea to Bob Swan, eBay’s CFO. He thought the idea had merit but said he couldn’t commit. In two weeks we found out why. On September 30, 2014 eBay Inc. announced that the board had approved splitting eBay and PayPal. As they say, timing is everything. This was not the right time.

Over the next 10 months, we focused everything on executing the split. On July 17, 2015 the gavel fell at the NYSE successfully splitting eBay and PayPal’s $255Bn global commerce engine into two standalone Internet companies. It was an incredible project, but the hardware co-op idea was still in my mind.