IDEAS Insights

IBM's Stealth Launch of POWER6+

IBM has historically updated some part of its product line, hardware or software, in the Spring and Fall seasons, keeping the "new and improved" banner fluttering to generate opportunities for its feet-on-the-street sales force. IBM's 2009 April update (Spring here in the US, but Fall for our Australian co-workers) included a number of new features, many of them significant, announced under IBM's Dynamic Infrastructure umbrella. Hidden among the multiple coordinated announcements (most of which will be reflected in IDEAS' Competitive Profiles) was the sheepish acknowledgement that POWER6+ has arrived. 

Intel's "tick-tock" schedule of introducing chips formalized what IBM had already been practicing – it is less risky if fabrication technology advances and processor logic-design advances are separated into independent chip releases.  But first, forgive some reminiscence. 

In the old days, when I was a mainframe processor designer, too often management's "scheduling of invention" unsuccessfully bet that breakthrough fabrication advances would conveniently coincide with innovative processor design patents. Back then, the repercussion of misaligned fabrication/design advances left the customer to suffer the delays. Since there were few serious alternatives, mainframe customers were stuck with IBM-brand systems and the delayed introduction of new servers typically resulted in a frenzied "first-day-order" lottery, along with proverbial rumors of bodegas winning early ship dates for multi-million dollar behemoths and profiting immensely by selling their spot in line. 

In the RISC space, starting with POWER4 (and perhaps even before), IBM instituted a more disciplined approach, which Intel later popularized. The milestones:  

• POWER4 (new dual-core design at 180nm),
• POWER4+ (incremental design with faster clocks, 130nm),
• POWER5 (new design with SMT, still 130nm),
• POWER5+ (incremental design with faster clocks, 90nm).  

Then came POWER6. To deliver its leapfrog competitive performance, at least on a per-core basis, POWER6 not only incorporated a new logic design, but also moved to 65nm. That upped the ante for POWER6+. To keep up with Intel, POWER6+ needed to be delivered at 45nm or smaller, and incorporate at least 4 cores per die.  However, IBM seems only to have added some incremental design enhancements (better storage keys, etc.).

Apparently, POWER6+ slipped out, unheralded, in the second half of last year with the Power 560 and Power 570 enhancements.  Now with the updated Power 520 and Power 550 employing POWER6+, IBM has reluctantly admitted that POWER6+ is not the headline-grabber it had once hoped.  (Acknowledgement -- Timothy Prickett Morgan uncovered this a few days before the rest of us.) 

In its heyday, Digital Equipment Corp was infamous for its stealth marketing (parodied with the oft-repeated analogy that Digital's attempt to market sushi would be as "cold, dead fish.")  But while Digital often couldn't figure out how to properly market some of its wonderful technology, IBM has usually performed superbly in marketing its own technological breakthroughs. Could it be that POWER6+ didn’t quite live up to IBM’s dreams, leaving IBM for once with the task of downplaying its introduction? 

Scrutinizing Oracle's Words for the Future of Sun's Hardware Business

What does Oracle plan for Sun’s SPARC and x86 server lines? It seems easier to understand why Oracle, as a business software company, values Sun’s software assets. Java and Solaris are clearly important to the success of Oracle’s middleware and database products. However, during the call to announce Oracle's acquisition of Sun, Larry Ellison specifically highlighted integration of software and hardware as a competitive advantage offered by the combined Oracle/Sun. An article in the upcoming April issue of IDEAS Tech Trends Monthly, “Is Oracle Really Entering the Server Hardware Business?” explores our thoughts on what the future holds for Sun’s $8 billion hardware business.

By offering an end-to-end, vertically integrated platform including hardware and software, Oracle seeks to achieve a stronger bond with its customers, and higher profits. However, most of the major server vendors in the industry support Oracle’s database software to some extent, and if Oracle now promotes its own hardware platform based on Sun’s technology, other hardware vendors may become increasingly hesitant to encourage their customers to deploy Oracle’s software offerings, for fear of drawing their attention to Oracle’s competing hardware.

Oracle’s announcement FAQ indicated that “Oracle also intends to focus the server and storage businesses on our common enterprise customers”. Today, that set of customers clearly represents the users of Sun’s SPARC systems. By contrast, Sun’s x86 systems business overlaps much more with the business of Oracle’s key partners, including HP and Dell, and it represents less than 13% of Sun’s hardware business. Therefore, Oracle may be much more hesitant to promote these systems, and it will likely continue to encourage other x86 vendors to adopt the x86 versions of Solaris and OpenSolaris.

For twenty years, the IT industry has gravitated towards disaggregation, whereby enterprise IT solutions were typically assembled from collections of industry-standard components. Now, the industry is entering a phase in which the server side of IT infrastructure is increasingly delivered in proprietary, vertically integrated forms (of which cloud computing is perhaps the ultimate manifestation). Customers who deploy servers on their own premises expect solutions consisting of differentiated software that is integrated directly with the hardware platform. 

With the acquisition of Sun, Oracle expects to deliver such a solution at the high end, consisting of the Oracle database, SPARC hardware, and the Solaris operating system, which it can position as an end-to-end, integrated alternative to IBM’s mainframes with z/OS and DB2. For now, the margins at the upper levels of the server market will be most appealing to Oracle as it seeks new ways to expand its business. Sun’s assets targeting the lower end of the market, including its commodity x86 hardware and even the MySQL database, are not yet likely to represent a high priority for Oracle. Its ownership of these assets will serve defensive purposes in the short term, keeping them away from the hands of competitors.

Regardless of its ultimate plans for Sun’s server products, Oracle’s entry in the server market will change the balance of power in the IT industry, and it should not be taken lightly.

Why IBM Will Continue to Pursue Sun

Although IBM appears to have called off talks to acquire Sun, a review of various paths that are available to IBM indicates that there are significant advantages for it to continue its pursuit and re-negotiate. The decisions that IBM makes next will depend on how it tackles some tough strategic questions. For example, how willing is IBM to fully pursue market opportunities with its industry-standard x86 hardware, instead of favoring its own System z and Power Systems platforms for the most lucrative high-end opportunities? How committed is IBM to delivering an end-to-end software platform hosted on multi-vendor hardware, rather than concentrating on its own tightly-integrated hardware stack?

The choices that IBM makes now will be steered by many internal and external forces, some of which are orthogonal or opposed. Depending on which forces prevail over others, their effect will fundamentally influence IBM’s decision whether to continue pursuing Sun or not, and how to integrate Sun’s systems technology if it does succeed with the acquisition. If IBM ultimately succeeds in acquiring Sun, and takes on the burden of consolidating seemingly incompatible platform hardware and competing software, it will benefit from an unprecedented range of virtualization tools for helping customers migrate between hardware platforms with the least possible disruption. If IBM does not acquire Sun in the end, it will face renewed challenges to develop a software stack that can both help secure the profits of its proprietary systems, and extend them to the increasingly critical x86 server market.

IDEAS has developed a few scenarios for how IBM might evolve its systems strategy with or without Sun. After analyzing these scenarios, it appears likely that IBM will proceed with the acquisition. Whether future negotiations will reach a price (and terms/conditions) that each side can agree to is not something we can predict. However, assuming such business obstacles can be overcome, the result will be that IBM adopts Sun's Solaris operating system on its own processors for business critical workloads, while promoting the open source version of Solaris, OpenSolaris, on x86 to build a community. If the majority of the market eventually accepts x86 systems for the most critical workloads, Solaris on x86 will provide IBM with a crucial foothold. Once IBM has fully exploited all possible opportunities for vertical integration with System z and Power Systems, it can fully shift its strategic focus to x86 and deliver a version of Solaris optimized specifically for its System x servers. Until then, Solaris and Sun's users will help to strengthen IBM's most profitable systems based on its own processors.

For more detail on these scenarios, download the complete analysis: The Mating Ritual of IBM and Sun: Some Outcome Scenarios (free registration required)

More Performance & Less Power with Intel Xeon 5500 Servers

Intel has announced a new generation of two socket Xeon 5500 ‘Nehalem’ server processors , which in turn has inspired server manufacturers to announce all new products based on the new technology. Over 20 new servers were added to Competitive Profiles CPSystems within 24 hours of the announcement this week, including new rack, blade and tower servers from Dell and HP new rack and blade servers from IBM and tower and rack servers from Fujitsu.

Introducing this new processor has not been a simple matter of releasing a new chip to plug into existing servers. Intel has ushered in an entirely new system platform including the new interconnect, chipset and memory technology. Therefore to accommodate the new processors server manufacturers have had to introduce completely new models in order to take advantage of the features available.

In IDEAS opinion,  Intel’s new ‘Nehalem’ Xeon 5500 processor presents a great opportunity for IT purchasers to save money through server consolidation and improved power management. A review by IDEAS of  the 20 new servers from Dell, HP and IBM, IDEAS found that the systems offer two to three times the amount of memory as previous generation servers, while also offering increased system performance (as much as double the previous generation), reduced memory latency and better idle power management.

An economic downturn might not seem like the best time to invest in new IT infrastructure, but for many users, this could be a crucial time to reduce their net Total Cost of Ownership (TCO) while still meeting their server workload requirements.

A summary of some of the major new products, as they appear in our Competitive Profiles service, appears below.

Dell

• PowerEdge T610 – a tower server
• PowerEdge R610 – a 1U rackmount server
• PowerEdge R710 – a 2U rackmount server
• PowerEdge M610 – a half height blade server
• PowerEdge M710 – a full height blade server

Fujitsu

• PRIMERGY TX300 S5 – a tower server
• PRIMERGY RX200 S5 – a 1U rackmount server
• PRIMERGY RX300 S5 – a 2U rackmount server

HP

• ProLiant ML150 G6 – a tower server
• ProLiant ML350 G6 – a tower server
• ProLiant ML370 G6 – a tower server
• ProLiant DL160 G6 – a 1U rackmount server
• ProLiant DL180 G6 – a 2U rackmount server
• ProLiant DL360 G6 – a 1U rackmount server
• ProLiant DL370 G6 – a 4U rackmount server
• ProLiant DL380 G6 – a 2U rackmount server
• ProLiant BL280c G6 – a half height blade server (available April 27)
• ProLiant BL460c G6 – a half height blade server
• ProLiant BL490c G6 – a half height blade server

IBM

• System x3550 M2 – a 1U rackmount server
• System x3650 M2 – a 2U rackmount server (available April 30)
• BladeCenter HS22 – a single width blade server
• iDataPlex dx360 M2 – iDataPlex node

All the above systems with the exception of the two with late April availability dates are available to order now.

Further announcements are expected, including new models from Sun and most probably Cisco’s new Unified Computing System. These will be included in the Competitive Profiles CPSystems coverage as they are announced in the coming weeks.

Fujitsu Sharpens Its Identity

The Fujitsu group of companies, traditionally strong in the Japanese market has had aspirations for growing its international business for some time. In 1999 Fujitsu created a 50/50 joint venture between Fujitsu Computers (Europe) Ltd. and Siemens Computer Systems Division to form the Fujitsu Siemens Computers operation. This gave Fujitsu a bigger footprint in the European Middle East Africa market. The group also had a presence in the big US market but with three separate companies.

This fractured approach was probably a limiting factor for the company gaining the recognition it sought on the international stage. This latest set of announcements is designed to create a greater focus around the Fujitsu brand, which the company hopes will give it the critical mass and recognition it is aiming for on the world stage.

I recently attended the Fujitsu Integration Analyst Webinar where the company shared its latest announcements and the background on these changes.

The Fujitsu Group has taken over the remaining 50% share of Fujitsu Siemens from Siemens and named the new company Fujitsu Technology Solutions (FTS). It will have responsibility for sales into Europe, Middle East and Africa and India.
 
FTS will also take the global lead for R&D, based in Germany (Paderborn and Augsburg) for some of Fujitsu’s Technology Solutions offerings, specifically x86 Server PRIMERGY and ETERNUS – Fujitsu’s own Storage solution.

Fujitsu in the US, which was previously three separate organizations, Fujitsu Consulting, Fujitsu Computer Systems and Fujitsu Transaction Solutions, has been merged into a single entity called Fujitsu America.

These new organizations and others around the world (China, Australia and New Zealand and ASEAN etc.) will all combine as a single Global Business Group to market a single ‘Fujitsu’ technology brand worldwide.

Perhaps the most interesting aspect of the announcement for me was that Fujitsu intends to focus on the x86 Intel Architecture market in the medium to long term.

Fujitsu sees its mainframe business, which is significant in Japan, declining. The UNIX business is flat and the growth space is Intel-based Windows and Linux servers.  Fujitsu’s market share of Intel x86 systems in 2008 was 4%. The company has bold plans to increase its market share to 7% (500K units) in 2010 and 10% in 2012.

This potentially leaves a gap in the market where one could argue that Intel x86 has not yet matched the high-end UNIX offerings in the mission critical space. However, it seems that Fujitsu is banking on an extended transition phase, where it can manage the changeover, and presumably sees the this architecture filling that space over the coming years as multi-core processors let Intel x86 reach into this space.

The decision to focus on Intel  x86 is interesting given that Fujitsu has an existing sizeable stake in the SPARC architecture, including a technology partnership with Sun Microsystems, which includes joint development and delivery of Solaris and SPARC-based systems. The message was that the company is not abandoning this part of the market, nor the mainframe business. The point was made that the SPARC business is a sizeable part of the existing Japanese server business for Fujitsu. But in the medium to long term, much of the focus, and most of the R&D spending, will be weighted towards Intel x86, because that is where Fujitsu sees the growth.

Japanese companies are renowned for making decisions for the long term and this looks like being one of them. Other companies with multiple processor architectures have chosen to market both alongside each other and “let the market decide”. So top marks to Fujitsu, for taking a stand and drawing a line in the sand and making a call itself.

Now is probably the best possible time to make such an announcement. Rivals would have used this announcement to put fear, uncertainty and doubt, into the Fujitsu SPARC installed base and Sun could have been given a free kick, as some companies committed to Solaris and SPARC contemplated a move to Sun architectures as a result. But with rumors of a Sun and IBM merger circulating, and the uncertainty of what might happen to SPARC if that merger was to go ahead, reduces this as a risk.

Fujitsu’s storage portfolio has traditionally been fragmented across the different markets in which it plays. So in line with the new consolidation mantra the company is looking to merge and standardize its storage offerings on a worldwide basis. Fujitsu is currently defining a new set of globally unified storage products which will be aligned under the ETERNUS brand, with R&D centralized in Germany. The company has also announced that it is strengthening its cooperation with its storage partners, NetApp and EMC, although no details were given.

Fujitsu’s main aim is to grow its international business and so become the next IT powerhouse, recognized as a truly global organization. With the current economic climate and the uncertainty and instability generated in the markets, where the normal rules may no longer apply, ironically this may just be the right time to make this push, and to finally realize the goal of being seen in the same company as its rivals, HP, IBM and Dell.

Fujitsu’s products are included in Ideas International’s Competitive Profiles research offering, and the profiles have now been updated to reflect Fujitsu new single brand go to market strategy.