Because the System i can run at redline speed all day long . . .
With IBM's new reorganization of its Systems and Technology Group into the Power Systems unit and the Business Systems unit, the company answers one question but leaves another up in the air. The distinction between large enterprises and small and medium businesses may reflect the different needs of those two market segments, but there are still the pesky differences between the p and the i.
The two platforms share the same hardware and are often co-mingled in the same organizations more so in larger enterprises, certainly, but still, the overlap in "midrange" shops exists as well. With the new POWER6 570, the System p's short-lived core processor advantage slips back to neutral positioning with the i.
The Question
So, while the System p and i share similarities, what fundamentally different value propositions do the System p and the System i bring to customers?
To get us started, I turned to Charles King, principal analyst for Pund-IT:
In general, the difference between the platforms tends to be defined as one of mission-critical performance (System p) versus business-optimized flexibility/reliability (System i). This is a gross overstatement System p can support multiple OS applications and virtualization/consolidation, and enterprise-class System i solutions are in high demand for environments that depend wholly on their business applications such as banking/finance. But it also casts some light on the critical importance that the OS (AIX or i5/OS) plays in differentiating the platforms (particularly given the similarities of the hardware).Like other UNIX solutions, System p is a robust workhorse for transaction/database-intensive processing chores, as its position at the top of the TPC-C benchmarking heap proves. System i's remarkable ability to support/manage a wide range of OS's and applications has made it a leading business-specific server/consolidation platform.
What's interesting for customers is that IBM is not presenting them with an either/or proposition. System p and i are highly complementary, and many businesses run both platforms in their datacenters. The joining of the two in the new Enterprise Systems group will give IBM the opportunity to clearly define/demonstrate their respective value propositions.
And Another Question
CanIBM clearly define and delineate the respective differences?
Or maybe the question should be, "Does IBM even need to clarify the differences?" Are the p and i that far apart? Perhaps the differences between the System i and p are becoming a moot point. Is there any compelling reason why AIX couldn't host i5/OS in a partition just like i5/OS can run AIX? Is there a technical problem or is it just a differentiation concern? Or . . . is the System p used in a fundamentally different way than System i? If a business is using System p for performance intensive applications, as King notes, how many enterprises would even want to stick another OS on the System p box in the first place? Wouldn't that be like asking an Olympic sprinter to run with a monkey on his back?
What do you think? And this isn't a rhetorical question I'm looking for more answers here. Is the differentiation between the System i and System p covered in this single post? Or is there more? And, perhaps more important, is it even still important for IBM . . . or the System i world . . . to make distinctions?
Posted by cmaxcer on July 31, 2007 at 8:43 AM | Comments (8)
Yesterday we published a news story noting the roles of COMMON and User Groups as influencers to IBM sometimes we System i aficionados forget and think IBM makes all of its System i decisions in a Big Blue vacuum, and that's just not the case. IBM uses a healthy dose of customer opinion and "requirements" to figure out how to deliver new technology and pricing programs . . . often filtered by User Groups such as COMMON.
Others, such as the somewhat exclusive LUG, no doubt have had roles to play. Of course, there's our international-based COMMON friends to remember as well System i enthusiasts live and work around the globe! What was I thinking?
Fortunately, we received a quick e-mail from our friends at COMMON Europe, which I'm happy to share here:
Congratulations for the beautiful article "COMMON's Advocay Pillar Supports IBM" by Chris Maxcer that emphasizes the importance of user groups. Being a long-standing COMMON hand, I felt proud reading it.This short message is not to undermine our sister organization's statements but just to keep the records straight. There are two COMMON Advisory Councils, one in Europe (CEAC) and another in America (CAAC). In fact, the current edition, the earlier was in the nineties, initiated in Europe, and the idea was carried over to North America. The collective efforts brought PHP as well as IP Telephony to the System i, and MySQL is the recent addition to that list.
Thanks and regards,
Ranga (Shrirang U.) Deshpande,
COMMON Europe BoD,
On behalf of Olga Miralles i Mulleras, President, COMMON Europe (on holidays for the moment)
Posted by cmaxcer on July 30, 2007 at 5:34 PM | Comments (0)
Although the open-source PHP and MySQL options on the System i can bring thousands of applications to the System i world, those applications may be far from free. It's an easy point to forget because so much of the marketing and hoopla surrounding open source focuses on the free solutions while many enhanced commercial options exist side-by-side or in different versions.
The i5/OS support for the open-source Sugar Enterprise customer-relationship-management solution announced this week by IBM and SugarCRM comes courtesy of Zend Technologies' PHP Zend Core for i5/OS and MySQL AB's IBM-led move to create a version of the MySQL database for the System i, which is also available from IBM.
Don't get me wrong, I believe this is great news. SugarCRM is one of the most popular and widely used customer-relationship-management solutions, and having the option to run it on the System i is fantastic.
If you think you're going to get terrific i5/OS integration for free, however, take a closer look.
The i5/OS support for SugarCRM announced this week by IBM and SugarCRM only points to the SugarCRM Enterprise version. SugarCRM offers the free and open-source Sugar Community Edition (also referred to as Sugar Open Source) via the SugarCRM Open-Source Project. The two commercial editions offered by SugarCRM are Sugar Professional and Sugar Enterprise.
Sugar Professional typically costs $275 per user per year while Sugar Enterprise comes in at $449 per user per year. The SugarCRM press release announcing compatibility with i5/OS, by the way, didn't note the commercial cost of Sugar Enterprise not entirely surprising because some solution providers don't note pricing information as a general practice. Then again, many do. Incidentally, while I'm a fan of all up-front pricing information, SugarCRM, as part of its logo, uses the tag line, "Commercial Open Source." So although the company isn't leading a marketing effort on competitive pricing, it isn't trying to hide anything, either.
Sugar Enterprise, of course, doesn't cost $449 per user per year just because i5/OS is in the picture. Companies looking for Oracle database support would also opt for the Enterprise version.
Because SugarCRM's solutions are built on the popular open-source LAMP stack, enterprising System i pros could probably figure out a way to get the free Sugar Community Edition running in a System i box via Linux partitions, but easily?
In any event, any commercial organization that is truly serious about customer-relationship-management software is usually also willing to pay for it especially when the solution has a direct connection to the company's ability to make sales. The fact that SugarCRM is based on open source brings other benefits to enterprises, too, like more accessible customization and a large base of potential IT pros with SugarCRM experience.
Plus, the worldwide support of the SugarCRM Open-Source Project puts thousands of developers on the virtual SugarCRM open-source development team, leading to new cutting-edge features that SugarCRM can roll into its Professional and Enterprise editions.
So, salt, sugar, or simply business as usual?
Posted by cmaxcer on July 26, 2007 at 8:30 AM | Comments (4)
IBM reported a great overall second quarter last week, recording a 19 percent leap in earnings on a 9 percent increase in revenue. System p, x, and z posted gains while the System i division's revenue dropped yet again, earning only a brief mention in the IBM 2Q 2007 Earnings Announcement webcast:
"System i declined, but we'll be bringing POWER6 technology to this platform later
this quarter," Mark Loughridge, IBM's senior vice president and chief financial
officer, noted.
AS/400-iSeries-System i revenue has typically been cyclical, which points back to the install base of loyal customers who consistently upgrade on a combination of lease and technology upgrade cycles. With the POWER6 to be announced this week, as Mark Shearer noted, the IBM System i world will be in a great position to see some fourth quarter gains.
The Vertical Industry Program (VIP) is off to a decent start, Shearer said last week, but he didn't share a lot of detail the massive reorganization news was his top priority, of course.
Oh, Yeah, That Reorganization
IBM's reorganization of the Systems and Technology Group (which means that in the i world IBM ends up with the Power Systems unit for enterprise-class computing and the Business Systems unit for small and medium-sized businesses) and the cross-platform focus those adjustments will bring may usher in some interesting changes to IBM's financial reporting.
Will IBM continue to break out System i and System p revenue? Or will it get lumped under some kind of new "POWER processor" category?
Either way, the future success of the System i . . . or future struggles . . . will likely be masked by the new business units.
Will It Matter?
IBM's reorganization, in addition to the financial breakout questions, may effectively jam a stick in the spokes of System i marketing and brand identity or maybe not.
With the changes, IBM will be serving its customers with the "what do you want and need?" approach, which throws into doubt any possible hopes that the company will attempt to lead with the System i. The System i world has been hoping that IBM would hold the System i out in front of its server lineup as a flagship system, and while that hope was never particularly strong, its thin cord has now been effectively sliced down to a thread.
Shearer noted that the reorganization may lead to customers seeing "i5/OS pop up in unexpected places." Would that be on a POWER-based blade sometime in the future? Or elsewhere?
Will VOIP on System i end up fitting into more small and medium businesses as IBM adjusts to a more holistic approach? Will IBM's new Business Systems unit lead on total cost of ownership, where System i-related solutions excel, or will it shift toward solutions that leave more room for follow-up services?
Will any of this be intentional . . . or will it just sort of happen? Will it be a butterfly simply gliding on a strong breeze or one flapping its wings and changing the weather a whole world away?
Posted by cmaxcer on July 23, 2007 at 9:12 AM | Comments (1)
In a set of massive organizational realignments, IBM is breaking up its Systems and Technology Group (STG) so that IBM can focus on the needs of its very large customers as well as the needs of its SMB customers in addition to going after a bigger share of the $32 billion SMB pie. Bill Zeitler, IBM's senior vice president and group executive for the IBM STG, announced this yesterday in an internal IBM memo.
Yesterday afternoon, IBM's System i General Manager Mark Shearer gave me a 25-minute briefing by phone, and I'm still trying to grasp all the details and ramifications. Basically, the IBM known by the System i world is moving and shaking in a way that may change the landscape forever. Here's the basics:
IBM is merging its System i and System p technology groups and also breaking them apart into two new groups one that focuses on very large organizations, and one that concentrates on SMBs.
"I have noticed first hand, even the language you use, the requirements, the approach to the marketplace are radically different between our large enterprise clients and our small and medium business clients, and I think with having the discreet segmented approach . . . we're going to be a lot more effective," Shearer said.
The enterprise group will be the "Power Systems" business unit, and it will focus on the 570 and 595. (Incidentally, we should see the first POWER6-based System i 570 announced next week, as well as a new granular "pay for what you use" approach to pricing for large customers. Shearer noted that IBM is moving at an extraordinary rate of speed on these changes.)
The Power Systems business unit will be led by Ross Mauri.
The new SMB business unit will be known as the Business Systems unit and will retain responsibility for the low-end System i products the i550, i525, i520, and i515. It will be led by Marc Dupaquier.
In addition to housing the System i, the Business Systems unit will bring other IBM technologies into the mix through a new integrated sales model in which IBM will approach customers on a total-solution basis rather than a separated, technology-segmented model.
Shearer said IBM will develop an IBM roadmap for SMB offerings, integrating Web 2.0 services with middleware, and will change its sales structure so that IBM reps are offering more focused solution messages.
"It just drives SMBs nuts when three different faces from IBM with three different proposals show up at their doors," Shearer said.
In addition, changes are afoot for IBM Business Partners. It sounds like they'll have to play by the new rules, too, selling total IBM packages rather than simply concentrating on System i.
"The majority of our Business Partners are many steps ahead of IBM on this becasue most of our Business Partners already sell multiple parts of the IBM product line. For example, most already sell the Unix solutions," Shearer noted. "In fact, less than 10 percent of the System i partners only sell System i. So our Partners really do embrace this model of solution selling rather than single-technology selling."
Mark Shearer Will Stick Around
"They just can't get rid of me," Shearer joked. He will continue to be involved in the new management plan and will lead the two new groups. His new title will be something like Vice President and Business Line Executive for Power Systems Products.
"I'll be driving the product strategy and the product plans for both the high and low-end POWER systems. So I'll have the hardware, the high-end, the blade, and modular, and I'll have all the software i5/OS, AIX, and Linux, and by looking at it holistically, I think we'll be able to bring to market some innovative new products. I think it will be great for the System i client base because they will see i5/OS pop up in unexpected places," he said.
Clients Who Use System i
"When I think of the System i business, I really stopped thinking about it as a single technology platform, and I think about it more as the clients who use the System i," Shearer explained. "When you look at it that way, it turns out that our System i clients spend three times as much money on Unix and Intel and external storage systems, and we don't help them simplify that yet. We don't help them manage that more effectively, and I think that by having more of a client orientation, the combination of the IBM businesses will be far more effective."
Posted by cmaxcer on July 19, 2007 at 3:08 AM | Comments (21)
OK, as NEWS Daily hits the streets, I'm getting additional reports, both on what Elaine Lennox said and didn't say, as well as what Bob Tipton, who also spoke at OCEAN, kind of said following Lennox. Tipton riffed a bit on the idea of i5/OS on other platforms, including Intel, which seemed to have added a bit of fuel to the speculation, though creating a fire may not have been the intention of either speaker.
In any event, Trevor Perry, who was also there, told me that a more likely interpretation of Lennox's words would be that i5/OS could run on a POWER6-based blade form factor, which could presumably slide into a BladeCenter. Perry also noted that Frank Soltis has made similar statements to this effect, but details remain elusive.
Perry, for his part, covers the conference and some of these issues in his "System i(ntel)?" blog post. Definitely check it out.
Posted by cmaxcer on July 18, 2007 at 11:32 AM | Comments (1)
Details are scarce right now, but IBM's System i Vice President of Marketing Elaine Lennox seems to have told attendees at the OCEAN Annual Technical Conference yesterday that IBM is planning to port i5/OS to run on other hardware.
To paraphrase, she said something that noted that IBM has been "homogenizing hardware" for some time now, and that continuing with that trend, i5/OS would likely run on BladeCenters at some point. BUT I don't have a direct quote, and even then, according to multiple sources, the "BladeCenters" may have been "blade servers", and while the latter doesn't make sense in context to IBM's technology, it's an illustration of how well people record details in off-the-cuff environments.
So, it is clear, though, that Lennox was very guarded with her terminology and didn't "pre-announce" anything. She certainly didn't offer any details, with the possible exception of noting that IBM would "announce" something in the near future.
IBM's PR team, for its part, wouldn't confirm or deny the rumors, scuttlebutt, and speculation, but there will be some sort of announcement soon. Until then, this is all we know.
* One Note: Sometimes when a big company wants to share really big news, it lets some bits and pieces dribble out, examines how people react, and then figures out the best way to spin the story. Happens in politics, too, it turns out. Either way, this is all I know right now.
Posted by cmaxcer on July 17, 2007 at 4:20 PM | Comments (8)
Wow. So when Vision Solutions and Lakeview merged, the HA/DR landscape tipped. IBM announced yesterday that it's acquiring DataMirror, and kaboom, the landscape is tipping again.
IBM will acquire all of the outstanding DataMirror common shares of the Canadian company at a price of C$27 in cash per share, which is nearly a 20 percent premium that adds up to C$170 million (that's $161 million in U.S. bucks).
"IBM's global reach and industry-leading integration solutions will rapidly expand the impact of DataMirror software," noted Nigel Stokes, DataMirror's chief executive officer and founder. "This transaction represents a validation of the hard work of the DataMirror team during the last 10 years and an opportunity for our customers to continue to leverage our unique solutions."
Spending $1 Billion for a Piece of $69 Billion
For IBM, the acquisition is designed to help IBM's cross-company $1 billion investment in its Information on Demand initiative. IBM's strategy is "to provide customers with the data they need when they need it to help them quickly respond to changing market demands, rapidly identify new business opportunities, and improve business results."
For example, IBM says that with DataMirror technology, a retailer can incorporate information from point-of-sale systems into a data warehouse in realtime and automatically trigger important business decisions and events, such as replenishing low stock based on current sales and inventory figures. Likewise, a telecommunications company's billing system information can be integrated into customer resource-management systems for a near realtime view of customers.
Clearly IBM is thinking of the DataMirror acquisition from a cross-platform perspective, so while DataMirror has been a big player in the System i world, the company also has solutions that cross Windows, Unix, and mainframes, and includes capabilities with Oracle, Microsoft, and Sybase databases.
IBM plans to integrate DataMirror with its Information Management Software unit, which is led by General Manager Ambuj Goyal. DataMirror's solutions will also be integrated with the IBM Information Server, which is IBM's information-integration platform designed to help companies use data in realtime across their organizations.
Overall, this is a burgeoning area of IT development, and IBM expects the generic "information-on-demand" market opportunity to grow to $69 billion by 2009.
Awesome First Quarter, Now This
DataMirror had a record-breaking first quarter for its fiscal 2008 year, reporting revenue increases of 22 percent over the same quarter in fiscal 2007, license revenue increases of 60 percent, and net income increases of a whopping 151 percent. For fiscal year 2008, DataMirror was projecting that its total annual revenue would reach $55 million.
DataMirror has approximately 220 employees and more than 2,200 customers including Debenhams, FedEx Ground, First American Bank, Priority Health, Tiffany & Co., and Union Pacific Railroad.
Of course, the acquisition is subject to shareholder and regulatory approvals and customary closing conditions. IBM says it plans to complete the acquisition in third quarter of this year.
Posted by cmaxcer on July 17, 2007 at 8:24 AM | Comments (0)
In last week's "Two Minutes with Stan Staszak on 515-525" post, Staszak, who is the director of System i/x products for Sirius, mentioned that IBM removed the 40-user max limit on the 515 models. It was an easily missed point, and only one reader, Claudio Cuzzi, noticed it at least, he was the only one who bothered to say something about it.
For those of you listening to our weekly podcast, I covered the change in a bit more detail on Friday, which I'll share now. Basically, this is both a big deal and not so much so at the same time. While it's possible to put an unlimited number of users on the 515, the number of companies who would even want to put large numbers on a 515 may be another matter altogether. The box itself is still restrictive toward larger organizations when it comes to expandability. It caps out at 16 gigabytes of memory, and customers are limited to eight disk drives.
Some IBM Business Partners may try to sell customers on a 515 just to make the sale rather than than size them correctly, for example, into a 525. This is bad customer service, definitely, but hardly limited to the System i world. The cynic in me, however, sees this as another way to lock a business into a System i investment, so this is only a bad deal when a company gets so frustrated that it wants to ditch the platform altogether.
Anyway, the 515 comes with 5 users built in, and to get to the magic "unlimited" user number, customers will have to purchase an additional 75 user seats. The program appears to be only available in the Americas now as of last week and IBM only mentioned the change to Business Partners as part of the IBM BP program.
I doubt IBM plans any formal announcement, but I'm working to set up an interview to learn more . . . for example, what kinds of customers or potential customers would want such a box? What workloads would make sense? (Don't hesitate to holler if you see some likely scenarios.) I'll post additional details as soon as I have them.
Posted by cmaxcer on July 16, 2007 at 10:13 AM | Comments (4)
Yesterday's iSociety.org chat on PHP and MySQL generated a lot of questions and excellent, concise answers from RPG and PHP System i experts Jon Paris and Mike Pavlak, with MySQL's Ethan O'Rafferty kicking in with release details. As the experts noted, PHP and MySQL are important to the System i world because they open the box up to a larger number of programmers, they bring lots of free or low-cost software to the i, there's plenty of educational material available, they're a good follow-on for the Net.Data contingent, they're relatively easy to learn, and 90 percent of PHP apps already use MySQL.
One chatter asked: How difficult is PHP to learn? How long will it take an RPGer to learn?
"The answer I often give is that I felt more at home with PHP in weeks than I did in years with Java," Jon Paris typed. "There are challenges for example, it is tough for an RPGer to get his head around the idea of dynamically typed variables."
To read the full transcript, check out http://isociety.org/Chat20070711.html.
Posted by cmaxcer on July 12, 2007 at 9:26 AM | Comments (1)
Along the lines of yesterday's Q&A, Kevin Fratzke, vice president of System i Solutions Practice for MSI Systems Integrators, is seeing similar interest in the 515 and 525.
"We are selling quite a few i515s and i525s to our existing customers, and we have sold a few to new customers," Fratzke says. "The changes in packaging and licensing to user-based have helped a lot in approaching the smaller customers that have gone dormant and are on older hardware."
His point about dormant customers is a good one and one that I hadn't considered before. The last time I heard much about IBM going after dormant customers was three or four years ago. In all the IBM-specific talk about the 515 and 525, however, none of the IBMers I've talked to have mentioned going after dormant customers as a strategy. Either IBM was pretty successful in 2004, or, more likely, the company is focused on driving new growth through the Vertical Industry Program (VIP).
Either way, there's obviously an opportunity for IBM Business Partners to get in front of customers who already have some affiliation with the i and bring them back onto modern solutions and presumably (re)become System i enthusiasts. Of course, these customers are still very small customers and may have a questionable growth curve you know, the idea that small companies become big companies . . . not always true, even if big companies like IBM, Oracle, and SAP are in love with the concept and spout it whenever they have an SMB strategy to share.
Pricing Is the Driver
With the full processor unleashed in the 515 and 525, which is more important to sales horsepower or price?
"The pricing model is driving most of the activity," Fratzke notes. "The horsepower doesn't hurt, but it's secondary when approaching dormant accounts they typically do not need performance it's more economics. With new customers both factors are more equal."
The Up and Down of Cost
Obviously, selling a lot of low-cost System i 515s and 525s is a good thing for expanding the use, market, and knowledge base of the System i. The downside is the cost and the profit for both IBM and Business Partners. It's tough to sell a commodity product that's fundamentally different from the other commodities on the market you need volume to make a profit, and volume is tough when you have to educate your buyers for nearly every new sale. There's no easy answer, and while Fratzke is seeing positive movement, it's not all glory and roses.
"Profitability is down due to the new pricing model on a per unit basis," he says. "IBM also has fewer protections in place for Business Partners who invest in i515 sales that can lower profits."
Net New Sales
Incidentally, while most of the 515-525 sales have been replacements in existing accounts for Sirius (as noted in yesterday's post), Sirius has made two sales into brand new accounts with no previous System i, iSeries, or AS/400 in place. If this were October, I'd be raining dogs all over this single digit number, but these boxes haven't been available that long. Baby steps, right?
Posted by cmaxcer on July 10, 2007 at 8:25 AM | Comments (7)
Stan Staszak is the director of System i/x products for Sirius, which is an IBM Premier Business Partner. Sirius is one of the largest and most successful IBM BP and value-added resellers when it comes to selling the System i, and I touch bases with Stan every three months or so to see what Sirius has been noticing in the System i world. Last week, I queried him on the 515 and 525. . . .
What kind of activity are you seeing around the 515 and 525 so far? Do any key things come to mind when you consider the 515 and 525 from a sales perspective?
"We have seen a lot of activity in the 515 and 525 models. Both models are a great fit for the SMB marketspace. The 525 has effectively replaced the 520 Enterprise Edition in most cases. The 525 CBU is also a very attractive offering for HA/DR.
In my opinion, the switch to concurrent user-based pricing has been well received by the user community. The fact that IBM has removed the 40-user max limit on the 515 models has me somewhat concerned, however. My fear is that some partners may try to shoehorn a customer's environment into that server to try to keep the overall solution price down to a minimum in competitive situations or because of budget constraints. Even though it is a powerful server from a processor perspective up to 7,100 CPW it still is very restrictive from an expandability perspective. It caps out at 16 gigabytes of main memory and doesn't support expansion towers . . . so customers are limited to a maximum of eight disk drives.
That being said, the 515 is still a great box for certain environments. We have found that in many cases it is less expensive for VOIP than the already attractively priced 520 IP Telephony Express Editions. You just need to know where and when it is a good fit."
What about IBM's VIP program? Is Sirius involved directly or tangentially in any way?
"As far as the VIP program goes, I think it is a terrific initiative, but it doesn't really apply to the channel partners. The best way to grow the System i brand is to build and maintain strong relationships with the ISV community. I'm hoping IBM modifies the program in the future to include Business Partners."
Posted by cmaxcer on July 9, 2007 at 8:31 AM | Comments (0)
So, you must have noticed all the videos we've been posting lately, thanks in a great part to the expertise of Bob Cozzi. We have iStudio videos featuring interviews from COMMON as well as iMonthly, which pre-loads on the NEWS & Analysis page. iMonthly covers hot topics each month while iStudio is more event-driven and publishes without a set schedule.
David Vasta commented on iStudio, "The System i needs more stuff like this to generate buzz and to provide different means of delivering the same honest message on how the best dang platform on earth is doing."
So David is a fan of the videos . . . anyone else care to chime in? Does a System i video fit your lunch schedule? Like the format? Have suggestions for new content? Let us know. . . .
Either way, we've posted the second batch of iStudio videos from COMMON, and they feature Duncan Kenzie and Elaine Lennox:
Enjoy!
Posted by cmaxcer on July 2, 2007 at 10:51 AM | Comments (1)

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