Borrowing a little from Hewlett-Packard and from its own mainframe division, IBM today unveiled a dramatic upgrade to its midrange UNIX server line that includes new pricing schemes and brings computing-on-demand to IBM customers in a number of ways.
The new eServer p690 system is built around IBM's 1.7-GHz POWER4+ processor -- the faster POWER4+ processor on the market -- and includes double the memory as the p690's previous incarnation as well as I/O enhancements and the doubling of LPAR support to the processor level, providing a 65 percent performance boost over its game-changing predecessor, according to IBM. These enhancements, say IBM officials, make the p690 a more powerful server than HP's Superdome at a lower price.
Similarly the new IBM eServer p670 features 1.5 GHz POWER4+ processors and the same enhancements as the p690 -- improved I/O performance and doubling of LPAR support to the processor level. 1.5 GHz.
These new servers will be available on May 30, 2003, with the p690 starting at $493,386 for a 8-way configuration and the p670 starting at $190,411. The new 1.5 and 1.7 Ghz processors will be available on the p655 beginning in late July 2003.
Finally, the cluster-optimized IBM eServer p655 is now offered with both the new 1.7 and 1.5 GHz POWER4+ processors and upgraded L3 cache, I/O and memory.
The product announcements continue IBM's assault on the midrange UNIX market. According to market-research firm IDC, IBM has nearly doubled its UNIX server worldwide revenue market share to 30.1 percent from 15.3 percent since the introduction of the eServer pSeries in October 2000. In that same period, both HP and Sun lost UNIX revenue marketshare.
"We have basically doubled market share in less than two years, thanks to a maniacal focus on performance and price," says Jim McGaughan, pSeries Server Launch Strategist. "We've made sure that the small 1-4-way systems shares the same advances that the big machines do. That approach has changed us from being also-rans to being tied for top of the heap.
"It's a real horse race, and I think we won the Kentucky Derby -- just like the other long shot did."
Brad Day, vice president at market-research firm Giga Information Group, says that IBM should show some startling performance enhancements when these servers are benchmarked.
"Basically, you'll see 64-way performance on 32-way platforms," he says.
Indeed, the pricing of the entire new midrange line may end up being the biggest story for current and potential customers. IBM will offer customers to turn CPU and disk capacity on and off based on need; in addition, customers will be entitled to free test drives of the expanded capacity, as well as pay for the expanded capacity on a hourly system.
"Our big enterprise customers have been asking for better ways to plan their budgets, and this seemed like a good way to honor those requests," McGaughan says.
Basically, the capacity on demand allows customers to activate processors when needed and turned off at other times. The capacity can be temporary or permanent and is offered on the p690, p670 and p650 series, according to McGaughan.
"For any company, data-processing dollars need to be spent on those microprocessors they will use," Day says. This sort of pricing model lends itself well to companies looking to consolidate their servers and get away from a one-server, one-app model.
The pricing is not divided equally over all the CPUs, he added. To take a hypothetical example, let's say your enterprise purchases a 16-way server, but want only 8 CPUs active. In this case, the base pricing wouldn't be based on you paying for 50 percent of the total cost of the CPUs, but rather 60 percent. To activate four more CPUs, you'd pay 20 percent of the total cost of the CPUs. You can activate the CPUs on an as-needed basis. They can also be based on per-day usage, similar to a prepaid phone card or a debit card. If you need to light up 8 additional processors for only two days, you'll buy a feature code for 60 days and then IBM will debit your usage (in this example, the equivalent of 16 CPU days). The other advantage to this sort of system: expanded capacity becomes an operating expense and not a capital expenditure.
"We do not do anything intrusive at all," McGaughan says. "We will send back information about the usage. When a customer reaches the end, we tell them their resource is expiring. When they next boot the machine, we will deallocate it."
Similarly, a memory on demand capability allows customers to install features with unused memory capacity that can be activated in 4GB increments.
"I would expect that half of our customers will take advantage of either one of these options at some time," McGaughan says. "They are very affordable."
And perhaps in the ultimate harbinger of things to come, IBM plans to price software like DB2 and Tivoli on demand as well, although those plans have not been finalized.
Day says that IBM's pricing plans could lead to how other firms price software -- as well as change the dynamics in the UNIX server space.
"IBM has the ability to be the first to offer virtual pricing on their own products -- Websphere, DB2, etc.," he says. "If it works, HP has to convince BEA and Oracle to join this pricing model. This will test alliances with one another."