Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Unix's Slow Death Still Gives Life To IBM (Strictly for the Techies Among You )
Forbes Magazine ^ | Chris Kraeuter

Posted on 06/10/2006 8:59:52 AM PDT by SirLinksalot

Unix's Slow Death Still Gives Life To IBM

Chris Kraeuter

It's hard to get attention for something as dull as Unix computers when Web companies snag all the headlines for advancements in digital media. But an important development is happening at IBM that bears watching.

The company, which will announce its third-quarter results Oct. 17, has been the prime beneficiary of a consolidation in the Unix market that has vexed rivals Sun Microsystems (nasdaq: SUNW - news - people ) and Hewlett-Packard (nyse: HPQ - news - people ).

IBM (nyse: IBM - news - people ) captured the top spot as the biggest seller of Unix systems in 2004 and has held the lead throughout this year--stemming from a multiyear effort to improve and invest in Unix products.

Sales of IBM's Unix systems, called the pSeries, grew 15% in the first quarter and 36% in the second quarter--far outpacing Sun and HP. The trend should continue in the fourth quarter--historically, industrywide Unix sales have spiked 25% during this period--and into 2006, when IBM introduces a new high-end chip called Power5+.

IBM, Sun and HP each account for 30% of the worldwide Unix spending, but IBM is seen as the company with the most momentum, since its Unix sales have grown for the past two years.

Yesterday, IBM shares closed up 75 cents on an upgrade by Citigroup (nyse: C - news - people ), which cited server market share gains against HP and Sun.

The company doesn't break out specific sales for its product lines, but IDC estimates IBM's pSeries sales at $5 billion last year, or 16% of its overall hardware revenue and 5% of all sales.

Much of IBM's momentum came at the expense of Sun, which has long been a vocal champion of Unix but has emphasized its lower-end Unix systems and Linux in past years. Sun will introduce new Sparc processors next year that may reverse this years-long trend.

As for HP, it continues to attack the Unix market via systems using Intel's (nasdaq: INTC - news - people ) Itanium processor. It's a market HP largely has to itself. It's the only major backer of Itanium, which it helped develop with Intel in the 1990s but is today largely considered a dud.

At one time, Unix systems ruled the computer world. Cheaper alternatives using Windows software and Intel chips weren't powerful or reliable enough to meet the demands of corporate data centers. But that has changed, and in the process a violent shakeout occurred, leaving IBM, HP and Sun as the biggest Unix providers.

Now, it's possible further consolidation will occur, leaving IBM will a bigger slice of the market.

The gains have come at the middle and higher end of the market, for systems costing anywhere from $25,000 to more than $500,000. The fastest growth has been in the low end of the market, but Unix systems retain an important position in information technology budgets.

The death of Unix has been predicted for years now, but some sectors of the market defy the odds. In the second quarter, mid- and high-end Unix systems grew at a rate three times that of the overall server market.

IDC analyst Jean Bozman expects strength through the end of 2005, as technology buyers look to flush their budgets. Bozman, a longtime Unix watcher, says Unix buyers are in a longer-term replacement cycle that could last through 2007. She anticipates that Windows server revenue will surpass Unix server revenue by 2009, but that Unix servers will coexist with Windows and Linux servers for the foreseeable future.

Merrill Lynch (nyse: MER - news - people ) analyst Richard Farmer also predicts more spending on Microsoft (nasdaq: MSFT - news - people ) and Linux at the expense of Unix, which could hurt weaker players like Sun while strengthening IBM's hand.

Unix accounted for the single biggest slice of the server market in the second quarter, garnering $4.3 billion, or 35% of the $12.2 billion spent on servers during the period.

"It's like Rodney Dangerfield," Bozman says. "Unix doesn't get any respect, but it's there and it's important."

Worldwide revenue in the second quarter for the most expensive Unix servers, which cost more than $500,000, grew by 19.2%, and midrange Unix servers costing between $25,000 and $500,000 grew by 15.6%, says IDC.

And this doesn't include the slew of follow-on costs for software, support and data storage that these expensive machines generate over their useful life.

"You can't run the world on blade servers," says Dan Olds of Gabriel Consulting, who foresees continued spending on Unix servers, thanks in part to an improved ability to manage many smaller applications and workloads simultaneously and remotely.

While the golden age of Unix is likely in the past, the need for increased computing power can't be denied or shuffled off entirely onto racks of low-end servers. But it's still a multibillion-dollar market with a deep profit pool.

The question is, Which company has the resources and the stamina to stay in and win it?


TOPICS: Computers/Internet
KEYWORDS: death; ibm; linux; unix

1 posted on 06/10/2006 8:59:54 AM PDT by SirLinksalot
[ Post Reply | Private Reply | View Replies]

To: ShadowAce

ping


2 posted on 06/10/2006 9:03:33 AM PDT by clyde asbury (Adagio sostenuto)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SirLinksalot
"You can't run the world on blade servers"

Why not?

3 posted on 06/10/2006 9:08:47 AM PDT by VeniVidiVici (My head hurts.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: VeniVidiVici

There doesn't seem to be a single standard that all vendors follow. If one vendor fits 48/96 blades in a 42U rack, another fits 60. The dimensions of the blade enclosures themselves are different, meaning you can't have a mixed vendor environment in a blade solution.

Ordinary rack servers on the other hand don't have this problem. You're not restricted to purchase racks from a select few vendors. You can buy various configurations at various price points. This gives you the flexibility of choosing what you need and from whoever you want.

The other challenge in blades is to get the application support for the same. As the highest number of CPUs per blade is still 4, you can't have a large enterprise application requiring more than 4 CPUs to run on the same. This problem could soon be taken care of with multi-core CPUs coming into the picture.

But with blade prices coming down, they're becoming a more feasible solution even for medium sized organizations. One problem that will always remain is that of server density. While it's good to have more computing power in the same space, it also puts more weight per square foot of floor space.


4 posted on 06/10/2006 9:23:16 AM PDT by SirLinksalot
[ Post Reply | Private Reply | To 3 | View Replies]

To: clyde asbury

I wondered whether you'd be here, indulging your passion ...


5 posted on 06/10/2006 9:30:51 AM PDT by Tax-chick (I am a daughter of God, a child of the King, a holy fire burning with His love.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SirLinksalot

Isn't there a way to carve virtual machines out of multiple blades? For instance, if I have 60 blades, can 30 be dedicated to one task and the other 30 to another?


6 posted on 06/10/2006 9:31:09 AM PDT by VeniVidiVici (My head hurts.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: SirLinksalot
The number of CPU's per blade will not address all of the "advantages" that "Mainframes" still and will continue to provide. The applications also depend significantly on available memory to support active users.

Other developments, such as distributed processing techniques used by todays supercomputers, are what is needed to finally put mainframes to rest, but seeing as I depend on those servers for a job at this time, I'm in no hurry to see it happen! :)
7 posted on 06/10/2006 9:37:52 AM PDT by Pox
[ Post Reply | Private Reply | To 4 | View Replies]

To: VeniVidiVici

Interestingly enough, Mainframes are now utilizing the virtual machine techniques, but I'm not sure that blades are capable of that at this time, however, I could be mistaken.


8 posted on 06/10/2006 9:39:08 AM PDT by Pox
[ Post Reply | Private Reply | To 6 | View Replies]

To: SirLinksalot
Netcraft confirms it. BSD is dying.

Only hardcore geeks will get that.
9 posted on 06/10/2006 10:25:25 AM PDT by Crazieman (The Democratic Party: Culture of Treason)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SirLinksalot

It's a pet peeve of mine that analysts say "Unix is dead. Look at all these Linux machines that are replacing Unix."

What do they think Linux is exactly?


10 posted on 06/11/2006 1:01:44 AM PDT by mhx
[ Post Reply | Private Reply | To 1 | View Replies]

To: rdb3; chance33_98; Calvinist_Dark_Lord; Bush2000; PenguinWry; GodGunsandGuts; CyberCowboy777; ...

11 posted on 06/13/2006 5:35:34 AM PDT by ShadowAce (Linux -- The Ultimate Windows Service Pack)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SirLinksalot
One problem that will always remain is that of server density. While it's good to have more computing power in the same space, it also puts more weight per square foot of floor space.

...And the fact that the heat they generate could warm a smallish city. 

12 posted on 06/13/2006 6:51:35 AM PDT by zeugma (I reject your reality and substitute my own in its place.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Pox
Other developments, such as distributed processing techniques used by todays supercomputers, are what is needed to finally put mainframes to rest, but seeing as I depend on those servers for a job at this time, I'm in no hurry to see it happen! :)

Seems like people have been predicting the demise of the mainframe since Ogg was first chiseling his printout in stone. I ain't holding my breath on it though. There are still applications where only a mainframe makes sense, especially tasks that have to move a lot of data, and can't be broken up easily into parallel processes. 

13 posted on 06/13/2006 6:54:31 AM PDT by zeugma (I reject your reality and substitute my own in its place.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: Pox
Mainframes are now utilizing the virtual machine techniques

Mainframes have been doing that since the 60s.

14 posted on 06/13/2006 8:22:40 AM PDT by antiRepublicrat
[ Post Reply | Private Reply | To 8 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson