IBM guns for leadership in Unix servers

Big Blue pulled off an upset in the Indian Unix server market in Q4 2003, pipping HP to the runner-up slot. Now the company is serious about taking on the leader, Sun Microsystems, says AKHTAR PASHA

PUNEET GUPTA admits that IBM is still behind Sun, but says the gap is narrowing

2003 was an exceptionally good year for IBM’s Unix server line, the pSeries. For the first time in the recent past, Big Blue beat HP in Unix server sales. This happened in the fourth quarter of 2003, as IBM moved from third place to become the runner-up (Source: IDC India). In the process, IBM increased its share of the Unix server pie by 8.8 percent over the previous quarter. A substantial part of IBM’s success was due to the popularity of its entry-level Unix box, the p615. This is impressive when you consider that it happened in a quarter where other players saw marginal growth; market leader Sun’s share grew by 0.1 percent while HP’s dropped by 16.9 percent.

Says Puneet Gupta, general manager, pSeries Servers, IBM India, “2003 was a great year for us. We came from behind and made significant inroads in the Unix market to become the runner-up. We are still behind Sun, but the gap is thinning.” IBM signed four big deals in Q4, roping in Nicholas Piramal, UTI Bank, Voltas and Tata Motors. Its share of the Unix server market grew by 69 percent year-on-year; overall the segment grew by 9.5 percent. The other players in this segment, Sun and HP, both lost market share with negative growth of 4.7 percent and 0.5 percent respectively.

Spearheading the assault

IBM has traditionally focused on the mid- and high-end of the Unix server market. Last year it bowled a googly by launching its Volume Drive campaign where it pushed low-end Unix servers for small and medium enterprises (SMEs). The p615 server was part of this effort and it became a major factor contributing to IBM’s stellar performance in Q4 2003. SME customers who bought p615s are using them for running applications such as firewall, Web (HTTP), caching, database and production. Customers in IT-powered segments such as software development have also used the p615. In a price-performance play, IBM is offering a 1- or 2-way system with 1 GB-16 GB of memory from a starting price as low as Rs 5 lakh.

CUoD takes centre stage

Capacity Upgrade on Demand or CUoD is a key addition to AIX 5L. With this feature, systems ship with more processors than required to start with. These surplus processors are kept in reserve until a business needs them to be activated. Companies often experience demand surges and spikes on particular days of the month (say, the billing period for a telco) or during the festive season. At such times, it’s useful for an IT head to be able to add processors (and thereby processing power) on the fly to handle this increased workload without interrupting operations. UTI Bank, Tata Motors and TCS are using CUoD. It gives an enterprise the flexibility of paying for additional server horsepower only when it is used. When it does, it can flip a software switch and scale up its computing bandwidth in a jiffy without any downtime. Gupta quantifies, “It costs Rs 15.7 lakh to activate two CPUs on a p650. However, as we have found that customers want to use this option for a limited period, the cost to activate two CPUs on a p650 server for 30 days is just Rs 5.02 lakh.”

Winning accounts

Voltas was an HP customer; IBM recently bagged this account and the company is now using p630 and p615 servers. Similarly, Nicholas Piramal used to be an HP customer but IBM bagged that account in Q4 2003 and the company has since deployed a mix of p650, p630 and p615 servers. The Stock Holding Corporation did a technology revamp in 2003 and ended up using IBM’s pSeries. The writing on the wall is clear—enterprises are seeing value in IBM’s Unix boxes and technology.

Stock & Sell

Previously, IBM’s distributors never stocked its pSeries servers. That’s changed in the last seven months as distributors TechPacific and Redington have started stocking these servers. Through these two channel giants IBM has signed up a hundred tier-2 partners that are focusing upon SMEs. With this, IBM has become the first vendor to establish a stock & sell model for Unix servers in India.

‘P’ is for Penguin

To further tempt enterprises, IBM supports Linux on the pSeries—both Red Hat Enterprise Linux AS and SUSE Linux Enterprise Server. Linux is available right from Big Blue’s entry-level p615 server to the top-of-the-line p690. Server administrators can logically partition and distribute workloads during peak and off-peak periods to optimise system resources. CDAC and TCS run Linux on pSeries hardware. TCS apparently wants to port its application (developed on Linux) on to the Linux-pSeries platform. Gupta adds, “Some customers want to run mission-critical applications on Linux.” Linux on the pSeries supports many enterprise-class features such as CUoD, backup on demand, and self-healing.

Foothold in telecom

The ongoing telecom build-up has hitherto favoured Sun India. IBM did not have a substantial presence in the telecom vertical until the Bharti Tele-ventures deal in Q1 2004. This was followed by a deal with Hutch that bought p690 servers. With these two big deals in its kitty, IBM now has a foothold in the telecom space which it will need as it faces off with Sun. Looking at these large telco deals, it appears that IBM is well-positioned to close the gap with Unix server satrap, Sun, in 2004.

POWER5, the next generation

iBM will release the POWER5 processor in H2 2004. The POWER processor family lies at the heart of IBM’s sustained—and so far, successful—effort to gain ground in the Unix server segment. Building on its predecessor, the POWER4’s support for Linux and OS/400, the POWER5 will be able to run several operating systems at the same time including AIX 5L, Linux and Windows. What’s more, the new processor will be backward compatible with its predecessor. The POWER5 offers simultaneous multithreading (SMT), transforming a single processor core into two logical processors (as seen by the operating system and application software). Since the POWER5 chip has two processor cores, SMT lets the chip run four application threads simultaneously, reducing the time required to complete a task. Simply put, SMT will help the POWER5 boost performance by 40 percent while the per-core die-size will grow by about 24 percent. The POWER5 has a power management feature that lets it execute 50 percent more instructions without consuming any more power than the POWER4 would while handling a lesser number of instructions.

pSeries wins (in H2 2003)
Customer	No. of servers	pSeries	Application
Nicholas Piramal	11	p615, p630 and p650 servers	ERP
UTI Bank	2	p650 and p690 servers	Core Banking System
Voltas	12	p615 and p630 servers	ERP
Tata Motors	3	p690 and p650 servers	ERP and CRM
			(Source: IBM)

akhtar@expresscomputeronline.com