Global data center traffic is expected to grow from 1.8 zetabytes per year in 2011 to 6.6 zetabytes per year in 2016. This represents a compound annual growth rate ("CAGR") of 31% through 2016. A tier 1 server OEM estimates the need for eight million to ten million new cloud servers by 2016, with a physical footprint large enough to cover Manhattan island.

Cloud industry experts believe that server solutions that are able to successfully combine ARM 64-bit processors, high speed I/O and software-defined networking capabilities on a single chip to provide significant benefits over existing solutions. By combining the inherent power advantages of the ARM Instruction Set Architecture ("ISA") with on-chip networking capabilities, X-Gene is expected to deliver significantly lower TCO ("total cost of ownership") for typical cloud workloads. Industry experts anticipate market penetration for next-generation cloud infrastructure and data center servers could range from 8% to 25% of all servers by the end of calendar 2015. At the high end of this range, the addressable ARM-based processor market for cloud servers could be as high as $3 billion.

Cloud infrastructure growth also creates opportunities for new connectivity approaches within the data center. Emerging technologies include high-speed switch fabrics, 100Gbps Ethernet and RoCE (remote direct memory access over converged Ethernet). These new technologies will allow for faster data transfer between processor nodes, semiconductor components, blades, racks and appliances, substantially lowering TCO and allowing more efficient use of physical space.

X-Gene is now sampling to customers and partners. X-Gene provides enterprise class ARM 64-bit high performance processor cores, coupled with switch fabric and high-speed networking capabilities that will deliver substantially lower power consumption and substantial TCO savings. In May 2013, we announced X-C1, the world's first enterprise class ARM 64-bit server system development platform based on X-Gene. This platform consists of both X-Gene hardware and software components, including compilers, operating systems, virtualization and application software for multiple Tier 1 ecosystem partners. We expect to commence commercial shipments of these development platforms in June 2013.

Hear AppliedMicro executives and partners discuss how you can accelerate development of high performance, low TCO server systems, capturing your share of this exciting and rapidly growing cloud infrastructure market.