In the last 12 months, IBM Power Systems enthusiasts have experienced—and sometimes weathered—a wide-ranging flurry of activity. Cold fronts, warm fronts, sunshine and rain, the winds of change have whipped up recessionary cuts, “Smarter Systems,” a Jeopardy!-winning super computer, rising Power System sales, rising IBM i sales, a new appreciation for the Power architecture, and increased consideration for operating systems, road maps, competitive migrations, marketing tools, and a resurgence in appreciation for long-term ROI.
Plus, the cloud is both a boon and bane, and IBM i-focused developers have a chance to prove themselves to corporate decisions makers who were busy writing them off just a few years ago. Does all this sound rough and crazy and chaotic? It is, certainly, but when you take a step back and look at all the pieces and parts, there’s a lot of interesting forces and momentum at work in the land of IBM Power Systems.
Let’s take a closer look.
Power System Sales on the Rise
As of 3Q of 2011, IBM has 14 consecutive quarters of Unix market share gain, and along the way, lots of quarters with rising Power System sales, which include those systems sold with the intent to run AIX, IBM i, or Linux. IBM doles out details on sales about as reluctantly as a 4-year-old kid shares jelly beans, so we don’t get a lot to chew on. Still, there are some common highlights, as noted by Mark Loughridge, IBM’s senior vice president and chief financial officer:
1Q2011:
Loughridge says, “Power Systems grew 19 percent year to year. Entry systems more than doubled year to year and the high-end grew over 30 percent, reflecting the strong market acceptance of our POWER7 product line . . . IBM’s strong performance accounted for almost all of the UNIX industry’s 8 percent growth. In the first quarter we had 210 competitive displacements which results in over $200 million of business. Roughly 60 percent of these wins came from Oracle’s legacy Sun installed accounts and 30 percent from HP installed accounts.”2Q2011:
Loughridge says, “Power systems were up 12 percent as we continue to displace competitive systems” and “IBM’s strong performance accounted for all of the Unix industry’s 5 percent growth.” And competitive takeouts? A total of 250, which represents a whopping 3.8 per business day, which totals $300 million in business. Sixty percent came from Oracle and 30 percent came from HP.3Q2011:
Loughridge says, “The U.S., our largest market, was up 4 percent and Canada was up 7 percent, driven by continued momentum in our software business and great performance in Power Systems. . . . We had great performance in Power, up 15 percent year to year. We have gained share in each of the last 14 quarters. And now, for the third consecutive quarter, IBM’s strong performance accounted for all of the Unix industry’s growth.”
What does this mean? On the surface, it means that IBM’s POWER7 processors, along with its Power Systems lineup, along with newer releases for AIX and IBM i, has been growing, and more importantly, they’ve been growing in the midst of a barely cooking worldwide economy.
This is a pretty important feat.
IBM i Sales on the Rise
What about IBM i sales, specifically?
The real IBM i action starts back in the fourth quarter of 2010 when IBM sold out of its low-end Power Systems models, the 720 and 740. Since these models make up the bulk of IBM i-related sales, IBM executives were happy to hint that most of these sales were due to IBM i customers.
Steve Will, chief architect for IBM i, posting on his “You and i” blog (tinyurl.com/8a72fxq) late last year, offered the most complete roundup of IBM i sales that I’ve seen recently. He wrote, “Fast forward to 3Q2011 and things got even better. In our 3Q results, Power Systems grew at 15 percent YTY, which was great. Even better was that that growth was in part fueled by IBM i software sales, which grew even faster at 19 percent. That’s right. IBM i grew faster than the platform itself. And, in fact, that makes four consecutive quarters of growth for IBM i.”
Wow. Nineteen percent IBM i software growth in the third quarter of 2011? Nice. What’s even better is that it marks four consecutive quarters of growth for IBM i. For the naysayers out there, sure, some of the previous quarters were lackluster, but what’s really going on here? How is there growth at all? Hasn’t the economy stifled all investment?
As it turns out, Will—in his same post—then highlights a trend I’ve been hoping to see for a couple of years: A broader industry realization that IBM i is pretty freaking cost effective. Will reports, “As I talk to clients, one of the clear messages I am getting is businesses are investing and making a renewed commitment to their core technology platforms. As the economy declined in 2008-9, many businesses were forced to delay purchases and upgrades. But many also took a cold hard look at which platforms were really delivering for them. The people I talk to concluded that IBM i was right at the top of their list for cost-effective IT service delivery.
“Now, as we gradually come out of the recession, many businesses are looking to catch up, upgrading to POWER7 and either to IBM i 6.1 or IBM i 7.1. Interestingly, in 2011, we have seen an acceleration of people going direct to IBM i 7.1. The reason? It’s just as easy to go directly from 5.4 to 7.1.”
That’s right, a brutal economy not only stopped poorly thought out rip-and-replace efforts, it forced some CIOs to rethink their existing resources, and as most of the IBM i world knows, if you pay attention to the whole package, the IBM i is an efficient workhorse.
Meanwhile, What About Application Developers?
A new boost in system sales doesn’t automatically mean that the industry will need a bunch of new programmers; I hate to say it, but many of these systems went into existing accounts and many were solution-oriented sales, which means it will take a year or two before these customers start seriously thinking about customizations that will give them competitive advantages.
For existing programmers and architects, a burgeoning opportunity is afoot.
Jon Paris, a partner of System i Developer and industry educator, consultant, and writer, illuminated the topic earlier this year when he discussed the industry in advance of the RPG & DB2 Summit (late March, tinyurl.com/82rg528).
“The uncertainties of today’s economy have forced many companies to rethink their more ambitious modernization projects,” Paris noted. “This has given IBM i professionals a window of opportunity, a chance to demonstrate their relevance to the organization by rapidly modernizing the rock solid applications they already have. But they need to be able to react quickly. In this environment, it’s particularly important for RPGers and their management to have mastered modular architecture techniques and be up-to-date on UI and database options so they can move forward efficiently and decisively. Appropriate adoption of Open Source solutions also plays a major role.”
While Paris’ business is all about education around these topics, he’s right on the money: If I were an IBM i-focused developer seemingly stuck in a slow-action job, I would first make sure I had a good handle on all of my modernization methods and options, and second, I would find ways to plant seeds with colleagues and supervisors, ultimately putting myself (and team) out there for a key project to prove not only the development team, but the IBM i as well. For a lucky handful, this isn’t necessary, and modernization may even be baked into the development culture.
Speaking of Operating Systems
As IBM’s Will noted, the IBM i OS has grown for four consecutive quarters, and while that growth is attributed to revenue, IBM i has also grown in footprints — but again, IBM chooses not to reveal specifics. Along the way, IBM i has won in some competitive takeouts, but not it’s not in the same league compared to AIX taking out Solaris or HP-UX in the Unix space.
For IBM i, new growth and footprints are both good, along with increasingly popular Solution Editions that match pre-installed software solutions with small-to-mid Power Systems. What’s better? IBM’s relatively new Technology Refresh strategy. Why is this an important force?
IBM Technology Refreshes let IBM deliver significant new functionality without all the trappings of a whole new release level. Because many companies like to stay an entire release behind (old-school thinking to avoid cutting-edge bugs) there’s a danger for IBM and the industry at large to become fractured: When customers are all over the map when it comes to releases, it’s harder for IBM and ISVs to sell new software solutions and provide service to companies that have older releases that don’t support new features. This generates a more stagnant market overall. Ever wonder why Apple provides free updates to its iPhone, iPad, and iPod devices . . . but makes it really hard to revert back to an earlier release? Simple. Apple knows its strength is in large numbers of consumers all running the same versions of its operating systems. It’s good for app developers, plus it ensures that a more educated customer base knows about the latest and greatest features.
Technology Refreshes let IBM i-running companies introduce new features to their environment without the cost or business disruption associated with a full upgrade. This will lead to smarter customers who are more familiar to the benefits of IBM i. When business needs arise, instead of saying that a company’s black box can’t provide, it will increasingly be able to provide what the company needs, if not also drive greater efficiencies and ROI.
Bucking the Unix Trends
According to Al Gillen, IDC program vice president of system software, a very large percentage of Unix-based organizations (think 90 percent plus) are gradually shifting to Linux or Windows. The one wrinkle in this trend, though, is IBM’s AIX, POWER7, and strong processor roadmap. When you think about all the competitive takeouts IBM is enjoying lately, there’s a reason: IBM has the strongest, most promising technology roadmap for both AIX and POWER. Both Oracle and HP have faltered with its server/OS roadmaps and were hemorrhaging customers for several quarters.
“AIX is pretty well regarded by customers who still feel they need a Unix solution,” Gillen said in the fall of last year, though he noted that there is a trend of organizations installing virtualized Linux and Windows servers to handle non-mission-critical applications that can survive some downtime over the course of each year.
Still, in the Unix world, IBM is in an enviable position in that its processor roadmap is solid and trustworthy; its AIX OS has the same attributes; IBM cultivates a Business Partner ecosystem around the globe; and IBM customers seem willing to spend a little more with IBM because they feel they can rely on IBM to deliver.
Meanwhile, Forrester analyst Richard Fichera recently painted a related though slightly different picture of the overall health of Unix. On his blog (tinyurl.com/7d9l684), he wrote, “There has been a lot of ill-considered press coverage about the ‘death’ of Unix and coverage of the wholesale migration of Unix workloads to Linux, some of which (the latter, not the former) I have contributed to. But to set the record straight, the extinction of Unix is not going to happen in our lifetime.”
He adds, “While UNIX revenues are not growing at any major clip, it appears as if they have actually had a slight uptick over the past year, probably due to a surge by IBM, and seem to be nicely stuck around the $18 - 20B level annual range. But what is important is the ‘why,’ not the exact dollar figure.
“UNIX on proprietary RISC architectures will stay around for several reasons that primarily revolve around their being the only close alternative to mainframes in regards to specific high-end operational characteristics,” he notes. And the key characteristics? Performance for big, single-system images, isolated bulletproof partitions, and superb availability. These advantages for large workloads will keep Unix (and AIX) around for quite some time.
The wild thing about Linux and Windows is that better virtualization is letting companies achieve server consolidation on fewer boxes while they continue with operating system proliferation. This model of computing stands in stark contrast to IBM i and AIX on Power where larger systems can handle additional workloads without the need to introduce a whole new OS instance. As you might guess, it’s cheap to get started and add new instances, but at some point the critical mass will snowball out of control.
This is a message that IBM is increasingly pushing with AIX on Power, likely because AIX has a closer affinity to other Unix systems and Linux. IBM has created some high-profile resources on its IBM Power System pages online. One is a big splash graphic with a teaser title, “Does Your OS Matter?” The resulting page offers a six-page executive summary of a report by Solitaire Interglobal that describes how AIX on Power Systems delivers happier end users, greater security, higher reliability, and lower costs. For those that prefer a deeper dive, the full report is 27 pages (tinyurl.com/89l8dub).
Next, IBM has an online tool to help IT and business managers model their own non-Power System IT infrastructures against an IBM Power Systems solution. The tool, the IBM Smarter Computing Workload Simulator, shows how existing x86-based, commodity hardware-focused infrastructures are inefficient compared to Power Systems environments.
The simulator, through a few questions, can show massive gains in costs over a three-year period. For a typical mid-size company environment, total IT, operating, and strategic costs without IBM Power Systems come in at $11,215,901 over a three year period. With IBM, the costs plummet to just $3,196,825. Even if IBM is a bit off, there’s enough of a difference there to make most any cost-conscious CIO or CFO sit up and pay attention.
Fit for Purpose and Investment Themes
Last year, our System iNEWS team had a chance to sit down with Tom Rosamilia, IBM’s general manager of Power and z systems, and Colin Parris, vice president and business line executive for IBM Power Systems. Out of that meeting, one of the most important points was about IBM’s “fit-for-purpose” strategy where the company works with customers to figure out which overall platform will meet their needs best. What’s the difference between now and several years ago? It seems as if IBM’s goal is to truly find the right platform, even if the platform is a low-maintenance IBM i on Power solution that won’t require a lot of IBM consulting time to implement and support.
“I’ve got z and Power—where should I run this? Should I run it on Intel? Should I run it on System x? Should I run it on Power Systems running AIX? Should I run IBM i? Should I run it on z? We can help people understand the strengths of each one of those platforms. I will tell you I was very proud to see Watson running on POWER7 . . . I would never run that environment on a mainframe system. It would have been totally unqualified to do that work,” Rosamilia said, noting that each IBM system and OS, mainframes, AIX, and IBM i, has its place.
“We’re not in a one-size-fits-all marketplace out there,” he added.
In addition, Rosamilia revealed where IBM is investing and focusing its IBM i efforts for 2011-2013:
Solutions enablement
- Focus on ISV solutions integration
- Invest in language & database standards currency
Simplified management
- Integrate IBM i performance tooling with virtual I/O server
- Automate with Systems Director Management Console
Resilient systems
- Simplify administration of PowerHA for mid-sized companies
- Broaden storage area network integration
Cloud computing
- Deliver VM image management mobility, automation
- Extend storage virtualization features
What’s the common thread here? All of these themes are about making IBM i on Power more compelling to smart businesses that want to run smarter computing infrastructures. IBM isn’t responding to a tough world-wide economy by slashing prices and holding fire sales; instead, the company is focusing on increasing value in core areas.
And There’s the Cloud
Only slightly less expansive than IBM’s Smarter Planet initiative is IBM cloud-focused efforts. The behemoth company offers dozens of cloud-focused solutions, and yet seems to be pretending that its “IBM SmartCloud” is an actual product that makes sense rather than a conglomeration of cloudy solutions held together by something more than a grand vision and a cool name.
While IBM has a cloud marketing mess on its hands—check out the company’s IBM Smart Cloud site (tinyurl.com/3raq3wt) if you want to jump down the rabbit hole—it’s pretty clear that IBM has plenty of cloud-based solutions to meet many of its customers’ needs. There’s Platform as a Service (PaaS), Infrastructure as a Service (IaaS), Software as a Service (SaaS), and private clouds. When it comes to infrastructure, there’s IBM x86 cloud solutions, Power Systems solutions, zEnterprise solutions, and IBM iDataplex, as well as storage solutions, integrated starter kits, and implementation services.
There is a lot to grok, but it’s not as if the big IT companies in the world are doing much better. So what about Power Systems and the cloud?
AIX has more IBM-driven cloud opportunities; in fact, IBM i seems pretty much left out of IBM-branded solutions (tinyurl.com/6ttb5d7). At first glance, the lack of IBM i cloud offerings direct from IBM just doesn’t seem fair . . . until you consider that IBM i is really its own sort of animal in the zoo. Does anyone believe that a customer is going to simply throw down a credit card and spin up an IBM i instance to run some enterprise application? Not a chance. If anything, they might spin up an application, but they probably wouldn’t care about the underlying operating system — that’s half the reason to buy a cloud-based solution, anyway, so you don’t have to worry about the details. No, any of the IBM i-related cloud-based sorts of solutions is going to require a consultative sell. And if the customer is already an IBM i customer, they’ll most likely already have relationships with IBM i solution providers and value-added resellers, which is where they’ll likely turn to get help in the first place.
Consequently, nearly all of IBM’s IBM i cloud efforts revolve around its Business Partner community, and to the IBM i world, that’s critical. The AS/400 took off with Business Partners and solutions, and that’s still why it exists today in IBM i form.
Branching Out
2011 seems to have been the year that IBM’s converged Power Systems line really started to reach a tipping point of acceptance and identification in the industry. At System iNEWS, we’ve been seeing more and more ISVs develop their solutions to work with or even run on AIX and Linux, and these solution providers are increasingly starting to identify themselves as Power Systems ISVs rather than IBM i or iSeries ISVs.
At the same time, we’re seeing a burgeoning interest from systems administrators in learning more about the three POWER operating systems, and they are reaching out with a real sense of curiosity and willingness to learn and consider where and how Power Systems can be extended beyond what they already know and love.
All-in-all, there’s lot going on in the Power Systems world, and it’s hard not to get excited because all the pieces and parts speak to great opportunity for IBM i, AIX on Power, and a world that might not become overrun by hordes of Windows and Linux instances on x86. It speaks to a world that’s getting smarter about IT, about making informed and well-considered choices, and I can’t help but think that bodes well for IBM Power Systems and the ecosystem it serves.