System iNetwork

January 2010

January 26, 2010 10:25 AM

Craig Johnson Dies in Car Accident in Iowa

We just learned that Craig Johnson, IBM's Power Systems software product manager for IBM i, PHP, and MySQL, died in a car crash due to snow and low visibility conditions on Iowa's highways.

We believe the crash occurred yesterday, but from existing news stories and accident reports, the timing and circumstances aren't yet clear. Some of Craig's colleagues, however, were able to confirm Craig's passing, though no details have yet been officially reported.*

Craig was an amazing professional, always willing to take the time with System iNEWS to help share the latest details about IBM i and the System i. Over the years, Craig wrote for us, and helped us shape content to deliver great value to our readers and IBM's i-focused customers.

Craig is truly irreplaceable.

Our hearts and minds are with his family.

We will follow up with more detail as we learn it. Here are two links from a local Iowa paper that cover the road conditions and recent crashes (Craig was not named):

• http://www.globegazette.com/articles/2010/01/26/news/latest/doc4b5e7e1d832bc164924460.txt?refreshed=1#vmix_media_id=9689277
  
• http://www.globegazette.com/articles/2010/01/26/news/latest/doc4b5f14f68174f354026273.txt
  #vmix_media_id=9712979

*UPDATE: The Rochester Post-Bulletin has a short news story that confirms the accident on Monday: Rochester man killed in 40-car pileup

Posted by cmaxcer on January 26, 2010 at 10:25 AM | Comments (19)

January 25, 2010 11:07 AM

Invasion of the Smarter Planet

Have you noticed all the IBM Smarter Planet television ads lately? Seems like I can't get through any football playoff game without noticing a couple. IBM has been working on its Smarter Planet strategy since late 2008, but it seems as if the company has been amping things up lately -- or maybe not. Perhaps we're just reaching a saturation point, you know, where dry ground finally soaks up enough water that it can't hold any more and all the rainfall starts pooling up.

In addition to all the TV ads -- check them out on IBM's IBMAdvertising page on YouTube -- IBM CEO Samuel Palmisano has written a "The Future of the City" article for Newsweek, and earlier this month he was at Chatham House in London Talking up the Decade of Smart.

So what's the Smarter Planet, exactly? Systems of systems that use new sensors and measuring devices to help humans and infrastructure systems make smarter decisions, whether that's energy usage, traffic direction, or sewer systems that can react to massive rainfall.

There's more, of course, and it's incredibly complicated and harder to get a handle on than IBM's old e-business campaigns. I'll be writing about it more in the future, and I expect to see some Smarter Planet connections at the COMMON conference in May, but if you're interested, I suggest you take a lunch break and watch a few ads on YouTube and peruse the suddenly huge Smarter Planet site on IBM.com.

It's interesting, with some real problems that IBM is attempting to tackle. For instance, every year Americans waste 4.2 billion hours in traffic, and every year, traffic congestion wastes 58 supertankers of fuel. Presumably these 58 supertankers represent global traffic congestion, but still. It's in the ad:

Posted by cmaxcer on January 25, 2010 at 11:07 AM | Comments (6)

January 20, 2010 10:49 AM

IBM Q4: Like a Big Train, IBM Keeps Chugging Along

IBM's fourth-quarter 2009 and full-year financial report to investors yesterday seemed to surprise few analysts, and yet overall, IBM seems to be chugging along better than many big tech companies. IBM's fourth-quarter net income was $4.8 billion compared with $4.4 billion in the fourth quarter of 2008, an increase of 9 percent. Total revenues for the quarter came in at $27.2 billion, up 1 percent (but down 5 percent when adjusting for currency), as compared to Q4 2008.

"In 2009, we invested in opportunities such as Smarter Planet solutions, cloud computing and advanced analytics. These new capabilities position IBM to grow as the economy recovers. The increased operational leverage we have established by creating a globally integrated enterprise will enable us to drive greater profits as revenue growth returns. We are confident about 2010 and our ability to achieve the high end of our long-term roadmap," noted Samuel J. Palmisano, IBM chairman, president, and CEO.

Hardware, etc

Revenues from the Systems and Technology segment totaled $5.2 billion for the quarter, down 4 percent (9 percent, adjusting for currency) from the fourth quarter of 2008, but IBM says this is an improvement in the year-to-year revenue growth rate compared with the third quarter of 2009.

Systems revenues decreased 5 percent (10 percent, adjusting for currency). Revenues from the System x servers increased 37 percent. Revenues from the converged System p products decreased 14 percent compared with the 2008 period. Revenues from System z mainframe server products decreased 27 percent compared with the year-ago period. Total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), decreased 19 percent. Revenues from System Storage increased 1 percent, and revenues from Retail Store Solutions decreased 5 percent. Revenues from Microelectronics OEM increased 2 percent.

"While our revenue performance bottomed in the second quarter of 2009, the rate of year-to-year decline has sequentially improved in each of the past two quarters. We had strong growth in System x and blades, and improved performance in microelectronics. We gained share in System p, System x, blades, and both disc and tape storage," reported Mark Loughridge, IBM senior vice president and CFO.

"Gross profit margins improved year to year in all brands and for Systems and Technology in total. This quarter marks the highest gross profit margin for this business since fourth quarter of 2007, driven by improvements in our System x server business and converged p. And bottom line, Systems and Technology pretax profit grew 15 percent year to year in the fourth quarter," he added.

Still, System z revenue declined 27 percent year to year, but later this year IBM will be releasing its next generation System z.

Converged System p revenue declined 14 percent year to year, but gained 4 points of market share, Loughridge said, adding, "This is the seventh consecutive quarter of market share gains. System p has gained share in 10 of the last 12 quarters. In the fourth quarter, our success with competitive UNIX displacements continued, with almost 200 competitive wins totaling nearly $200 million in the quarter. For the year, we had over 500 competitive wins, which generated sales of over $600 million. Later this quarter, we’ll introduce the next generation POWER systems, which will deliver two to three times the performance, in the same energy envelope. So quite an announcement for this product line."

As expected, Loughridge didn't mention the IBM i operating system.

The biggest surprise was IBM's System x performance -- revenue up 37 percent with a 3 percent share gain, with System x blades gaining 56 percent year to year. IBM credits an improved sales model and better product offerings for the gains.

Software and Services

At IBM, software and services are king. "In 2009, over 90 percent of our segment profit came from software, services and financing with software and services each contributing 42 percent of our segment PTI," Laughridge noted.

IBM's services segments delivered revenue of $14.6 billion, up 2 percent at actual rates, but down 5 percent at constant currency. For the full year, IBM's combined services businesses delivered $8.1 billion in pre-tax income, up 11 percent year to year.

"Overall, we feel encouraged about the business as we saw improving trends in revenue, margin and signings," Loughridge said.

For software, revenue of $6.6 billion was up 2 percent year to year, down 4 percent at constant currency, but a number of large deals didn't close in the fourth quarter, and consequently IBM expects stronger growth in the first quarter of 2010.

Posted by cmaxcer on January 20, 2010 at 10:49 AM | Comments (0)

January 13, 2010 9:42 AM

Forrester Says IT Downturn 'Unofficially Over'

After a dismal performance in 2009, Forrester Research is reporting that the technology sector will see a recovery in 2010 as businesses and governments in the U.S. and around the world begin spending again on information technology.

After declining 8.2 percent in 2009, U.S. IT spending will grow 6.6 percent in 2010 to $568 billion. Global IT spending, which dropped 8.9 percent last year, will rise 8.1 percent in 2010 to more than $1.6 trillion. Software and computer hardware will see the greatest growth, as Forrester forecasts a new multi-year cycle of technology investment growth and innovation defined by Smart Computing.

"The technology downturn of 2008 and 2009 is unofficially over," notes Andrew Bartels, Forrester Research vice president and principal analyst. "All the pieces are in place for a 2010 tech spending rebound. In the U.S., the tech recovery will be much stronger than the overall economic recovery, with technology spending growing at more than twice the rate of gross domestic product (GDP) this year."

With regard to sector growth, hardware and software will lead the charge. Measured in U.S. dollars, global purchases of computer equipment will be up 8.2 percent, communications equipment buying will rise by 7.6 percent, software spending will increase by 9.7 percent, purchases of IT consulting and systems integration services will grow by 6.8 percent, and IT outsourcing services will be 7.1 percent higher.

On a regional basis, Europe will be the strongest performing region. Measured in U.S. dollars, the strongest growth in 2010 will be in Western and Central Europe, where tech purchases will rise by 11.2 percent, boosted by the dollar's decline against the euro, Forrester reports. IT purchases in Canada will grow by 9.9 percent, Asia Pacific by 7.8 percent, and Latin America by 7.7 percent. The weakest market will be Eastern Europe, the Middle East, and Africa, rising by just 2.4 percent. When measured against local currency, however, the U.S. will actually post the strongest growth of all the regional tech markets.

"We are entering a new six- to seven-year cycle of IT growth and innovation that Forrester calls Smart Computing," said Bartels. "New technologies of awareness married to advanced business intelligence analytics make computing smart. Smart Computing rests on new foundation technologies such as service-oriented architecture, server and storage virtualization, cloud computing, and unified communications. 2010 marks the beginning of this next phase of technology advancement."

No Hard Numbers for i, But Still. . .

Meanwhile, in the IBM i space, over the last few months, I've heard from about half a dozen or so ISVs and resellers who've noted that 2009 was actually a pretty good year for them. Some upgrade cycles panned out on the hardware side, and customers seemed to be less inclined to risk messing with the System i, because, after all, it wasn't broken. Obviously, there's been ups and downs in different software segments, and we're talking about private companies that don't really share their whole revenue story, but still, some companies seem to have had a good year by selling to customers who were suddenly "forced" to re-see the value proposition in their i.

Posted by cmaxcer on January 13, 2010 at 9:42 AM | Comments (0)

January 11, 2010 11:15 AM

COMMON President Offers 2010 Meeting Update

In the latest COMMON.CONNECT digital edition newsletter, COMMON President Wayne Madden offers an upbeat take on COMMON's upcoming 50th anniversary meeting in Orlando in May.

Madden notes that the conference will feature 300 sessions plus 4 pre-conference workshops. There's 8 new, non-IBM speakers among 56, plus there's 61 brand-new sessions, including a "New Technology Overview" course of study that will cover integration, encryption, cloud computing, blades, Web 2.0, app modernization, web services, and frameworks.

The expo, by the way, will boast 80 exhibitors.

Madden also briefly addresses the speaker volunteer benefits brouhaha, noting, "I'm very happy to report that the spirit of volunteerism is very much alive and well within the organization. We are very pleased that almost 100% of our volunteers are continuing in their various positions within the organization. . . ."

For more on the event, check out http://www.common.org/conferences/2010/annual/index.html.

Posted by cmaxcer on January 11, 2010 at 11:15 AM | Comments (0)

January 4, 2010 10:28 AM

While 520 Rules, Blades Gaining Traction

IBM first introduced IBM i running on a blade on an IBM BladeCenter in January two years ago. While the blade option gained a lot of interest, it still faced hurdles over connectivity and storage for most SMB organizations. Now, with IBM continuing to enhance the blade options, and with more and more IBM i customers upgrading to IBM i 6.1, blades are gaining a bit more traction. Some of my value-added resellers contacts are seeing a few go out the door these days, but I also wanted to ask IBM what it's seeing.

Rick Bause, IBM's Power Systems PR manager for the IBM Systems & Technology Group, answers my questions:

CM: How would you describe customer interest in IBM i on blades these days?

RB: Interest in IBM BladeCenter deployments continue to grow within IBM i clients. The predominate environment we are seeing is that the BladeCenter is being used to deploy a new consolidated infrastructure with several BladeCenter HSxx blades running x86 applications and one or two Power processor-based blades running IBM i applications. The BladeCenter JS12 with two POWER6 processor cores is the most popular blade for running IBM i in these deployments.

CM: Are there any particular customer situations where you're seeing blades get adopted?

RB: Clients are seeing value with running IBM i within the same infrastructure as their consolidated x86 environment. We are also seeing some customers deploy IBM i on several blades for running applications like WebSphere to take advantage of the price/performance available with the BladeCenter solution.

CM: How about more traditional Power Systems . . . is there any particular model of Power System (likely intended to run IBM i) that is a core hit with customers these days?

RB: In general the most popular Power Systems server for running IBM i is the Power 520. With one, two, and four-core options, this model has the entry price plus the performance to more than satisfy the requirements of many IBM i clients.

Posted by cmaxcer on January 4, 2010 at 10:28 AM | Comments (2)