by Timothy Prickett Morgan

The foundation of the next generation of IBM midrange servers, the so-called "Regatta" Power4-based machines that have been under development for the past five years, were announced last week by Big Blue through a Webcast and teleconference. These Regatta servers, which have from one to 16 of IBM's dual-processor Power4 cores running at either 1.1 GHz or 1.3 GHz, are in the process of being certified to run the OS/400 operating system.

The MidMarket Server division of IBM's Server Group, which controls the iSeries and AS/400 product line, is widely believed to be working on an OS/400 announcement for Regatta machines sometime in mid-2002, but has not publicly said anything too committal about its specific plans. But as has been the case with the 12-way "Raven" Apache servers, the 12-way "Blackbird" Northstar servers, the 24-way "Condor" Pulsar servers, and the 24-way I-Star and S-Star "Turbo Condor" servers, the differences between AIX and OS/400 server hardware technologies is, at least as far as the central electronics complexes were concerned with each of those generations of servers, pretty minor. Hence, the Regatta that has a pSeries 690 label slapped on it today will probably be sold as the iSeries Model 960, or something like, that next year.

Although IBM was expected to make a big splash with the Regattas, which are far and away the most powerful servers that the company has ever designed, including the mainframes that IBM and its competitors like to gauge themselves against, the company oddly did not pull out all of the stops. This is partly because IBM, as well as many journalists and analysts, are still in somewhat of a shock after the September 11 terrorist attacks in America. That's why IBM canceled the announcement it was going to make in San Diego and moved it out to the Web. Another reason that IBM's case for the Regattas lacked as much teeth as one might expect is that the machines will not be generally available until December 14 and, despite what IBMers tell me, will probably not be truly available until the first quarter of 2002. IBM had been planning for deliveries in volume in October, when the machines were originally scheduled to be announced. Moreover, IBM is apparently unsatisfied with the performance tuning on AIX 5L and Oracle databases running on the Regattas and has not released any significant benchmark results on the new machines. And, finally, this is the first major product announcement that IBM's own public relations team has put out by itself in a long time. IBM has for years relied on outside PR and marketing agencies to help it get its message out and build a little excitement. In the case of Regatta, IBM's long-standing campaign to undermine server sales at Unix rivals Sun Microsystems, Hewlett-Packard, and Compaq by leaking information about Regatta has had the effect of diminishing excitement on announcement day. I'll tell you more about Regatta after the following advertisement.

by Alex Woodie

The terrorist attacks of September 11 have caused many IT departments to rethink their disaster recovery plans and likely will lead to an increase in spending for business continuity products and services in 2002, industry insiders say.

"The landscape is changing quickly," said Curt Schwinck, an AS/400 specialist from San Diego who installs Lakeview Technology's high availability software. "I've got six deals in the hopper right now, deals that were signed prior to September 11. But they're looking at it much closer than they were before."

One of Schwinck's clients, a large toy manufacturer, has accelerated the $5 million installation of MIMIX replication software that will allow the company to instantly shift workloads among multiple AS/400s if one of them goes down. The installation was originally supposed to be completed in 2002, but now the company wants it done by December 2001.

"There's a heightened awareness of disaster recovery" as a result of the attack, said George Loechl, a spokesman for Oak Park, Illinois-based Lakeview. "The likelihood of that monumentally effecting business in 2002 is very strong," he said.

"We have absolutely seen more interest," said Yatish Mishra, president and chief technology officer of Raging Wire, a Sacramento, California, hosting firm that specializes in business continuity for large companies. "It absolutely has raised awareness." Companies pay Raging Wire between $10,000 and $500,000 per month to house and run their Unix or Windows servers, either backup or primary, in the company's state-of-the-art data center. They pay this monthly fee to protect them from paying the price for downtime, which ranges from hundreds of thousands of dollars per hour to tens of millions of dollars per hour, depending on the industry, Mishra said. But the margin between temporary downtime and unrecoverable damage is a razor-thin one, to be sure. A recent study at of the University of Minnesota at Rochester found that one out of five Fortune 500 business would go out of business if their systems or network were down for 48 hours or more.

How well are companies poised to deal with this? Several reports published before September 11 paint grim pictures of American companies' disaster-preparedness. Comdisco, an Illinois-based business continuity firm, found in 1997 that only 12 percent of all companies are prepared to deal with network or information systems disasters. Things improved somewhat by 2000, when a Comdisco study found that only 67 percent of companies did not have enough computer hardware in place at off-site locations to deal with the shutdown of the primary data center.

And when disaster does strike, history shows us that many companies don't fare well. When terrorists first struck the World Trade Center with a truck bomb in 1993, many companies with offices there never recovered. More than 40 tenants of the complex went out of business immediately when network connections were destroyed by the explosion, according to Raging Wire. And a year after that attack, more than 150 tenants called it quits, largely because the FBI had shut down the complex for two weeks to investigate the attacks. These numbers are in line with a Gartner Group estimate the day after the terrorist attacks that indicated that 40 percent of companies that experience a disaster will be out of businesses within five years.

So how well did the occupants of the World Trade Center cope with the horrible events of September 11? It may take some time before the final numbers are tallied, but we do know that some companies heeded the lessons of the past. The largest banks, brokerages, and insurance firms inhabiting the Twin Towers had invested in data replication technology that allowed them to instantaneously swap data-processing loads to off-site data centers when the servers went down in New York City, preventing the loss of any data or transactions. More than 100 tenants had contracts with Comdisco, SunGard Data Systems, and IBM Global Services that allowed them to restore their systems at a number of off-site data centers within a matter of hours or days. Depending on when they performed their last backup, many smaller companies undoubtedly lost a few days' worth of transactions, but probably managed to save their archived records, giving them a fighting chance to stay in business.

In the aftermath of the attack, many companies are likely to strengthen their disaster recovery plans. AS/400 and iSeries shops are well positioned for this renewed focus on business continuity for several reasons, says Schwinck. For one thing, AS/400 operators have historically been more involved in running their company's critical applications, and they've been doing it for longer periods of time than their Unix and Windows counterparts. Additionally, the OS/400 platforms advanced architecture makes it inherently more secure, reliable, and scaleable than out-of-the-box Unix and Windows systems. "The AS/400 and iSeries, by design, lend themselves well to doing this," he said.  

by Joe Hertvik

IBM is scheduled to announce two price changes to WebSphere Commerce Suite Version 5.1 on October 9. The WebSphere Commerce Suite V5.1 Pro Edition will increase in price, while the Start Edition will decrease in price. These price changes will be levied across all WebSphere Commerce Suite platforms except the iSeries. Here are the details.

This news first came out in an email to business partners last week. IBM was encouraging its partners to sell the Pro Edition to customers on or before October 8, so that the customers could escape the price increases (and so IBM could get a nice sales bump at the start of the new quarter). In the email, IBM said that the per-processor and per-store prices for the Pro V5.1 Edition for Windows 2000, AIX, Solaris, Linux, and zSeries versions of the application would increase from $45,000 per processor and $8,000 per store to $52,000 per processor and $9,000 per store. That would amount to an increase of 15.5 and 12.5 percent, respectively, per processor and per storefront.

For WebSphere Commerce Suite V5.1 Start, the pricing is a little different. IBM is decreasing the price of the Start Edition from $9,000 to $5,000 per processor, and the Start Edition store price would remain the same, at $500 per store. This is a nice decrease of a little over 45 percent per processor.

Note that there could be a few changes in pricing in tomorrow's announcement, and that these prices are for new installs only.

The iSeries WCS V5.1 is not affected by this announcement. This is because iSeries WebSphere Commerce Suite V5.1 Pro (Start is not available on the iSeries) is priced according to processor group, not according to the number of individual processors and stores used, as IBM does with the other platforms. So IBM is not increasing the price of iSeries WCS V5.1 Pro. However, if I were to speculate on information I'm picking up from various IBM sources, it's highly likely that when IBM releases the new WebSphere Commerce Business Edition software for the iSeries, in the first quarter 2002, product pricing will be adjusted to match the pricing standards on the other platforms. This means that IBM will probably move to processor and store-based pricing for its iSeries WebSphere Commerce line, and the first iSeries product to be sold under that pricing scheme will be WebSphere Commerce Business. WebSphere Commerce Business will be released for the Windows platform on November 30, and it is projected to be available on other platforms in first quarter of 2002. It is also possible that WebSphere Commerce Business for iSeries will be available in limited distribution in December 2001, and the new pricing structure may be in place by then.

The other interesting thing about IBM's email was the company's justification for increasing the price. IBM wrote to its Business Partners that "upon closely analyzing the market, the WebSphere Commerce Marketing team has determined that customers are willing to pay more for value and industry-leading functionality of WebSphere Commerce Suite V5.1 Start and Pro." In other words, IBM may be increasing the pricing on Pro because it can. During a time of recession and war--when companies are locking down their IT budgets and price cuts could reasonably be expected from vendors--IBM is going against the flow by increasing its WebSphere Commerce Suite prices and profit margin. And it may believe that customers will accept this increase, but I don't know too many customers who would be willing to pay more for WebSphere Commerce. Do you?

For iSeries customers, WebSphere Commerce Suite V5.1 prices will remain at their current rate--for now. However, when IBM releases the next release of WebSphere Commerce Suite for the iSeries, prices could increase and that could happen as soon as December.

For those of you who are interested in purchasing non-iSeries installations of WebSphere Commerce Suite V5.1 Pro, call IBM or its reseller (if that is where you buy your software) and complain loudly. Threaten to go to other e-commerce suites, like BEA Systems' WebLogic Commerce Server or Art Technology Group's Enterprise Commerce Suite, just to get IBM's or its resellers' attention. If you're interested in purchasing WebSphere Commerce Suite V5.1 Start for a non-iSeries platform, your ship has come in. IBM will be decreasing the price starting tomorrow, and that will help your budget.

by Timothy Prickett Morgan

IBM last week announced low-rate equipment financing and payment deferral plans for companies acquiring and financing its iSeries OS/400 platforms and pSeries Unix platforms. In the wake of the terrorist attacks on September 11, all of the major IT players are doing what they can to help those directly affected by the attacks and to encourage all the other millions of companies in America who were not directly affected by the attacks to go back to business and spend money buying computers.

IBM's new low-rate financing, which was announced on October 1, went into effect as the Federal Reserve Bank dropped the interbank funds rate to a meager 2.5 percent, the lowest that rate has been in several decades. IBM's low-rate financing for iSeries and pSeries servers is now as low as 5.1 percent. While this is pretty low, some companies that sell expensive equipment are doing better. A number of car manufacturers, stymied by the sudden drop in demand, are providing interest-free financing just so they can move their cars off the showroom floors.

As is usually the case, the low 5.1 percent financing rate is only available for those with the best credit ratings; companies, particularly new companies or small companies that have never acquired IBM midrange servers before, will find it difficult to attain those low 5.1 percent financing rates, much less negotiate for an even lower rate, like some of the Global 2000 companies can do. If IBM wants to drive more business and expand its customer base, it should offer free financing to somewhat risky fledgling companies that might otherwise buy Intel-based servers running Microsoft's Windows 2000 operating systems. Intel-based servers are perceived to be so inexpensive, at least at the front end, when such companies are only looking at the initial sticker price. (I've got some recent experience in this way of thinking myself, having just been forced to start my own business.)

Obviously, those companies that can get that low rate should take it. Similarly, companies acquiring iSeries or pSeries servers should take the 90-day payment deferrals that IBM is offering exclusively to iSeries and pSeries buyers as part of this deal, because it is probably a good idea to hoard some cash right now. IBM is offering either the low-rate financing or the 90-day deferral on some of its products, but not both in combination. The financing and deferral is available on machines shipped between October 1 and December 31; machinery has to be installed by January 31, 2002, as part of the deal. The low rate and deferral can be applied to transactions that have an aggregate value of between $50,000 and $1 million. This deal is available in the United States, Canada, and selected Latin American countries, either directly through IBM or its resellers.

In a separate announcement, IBM last week altered an existing iSeries promotion. The iSeries 400 Solutions Promotion offers customers who acquire an iSeries server rebates of between 5 and 15 percent off the invoice amount in a transaction. One of the stipulations of the deal was that companies had to buy new OS/400 applications and that these applications had to eat up at least half of the processing capacity of the acquired server, based on IBM's Commercial Processing Workload (CPW) ratings. IBM and software providers, obviously eager to sell anything they can, have removed this latter requirement about taking part in the rebate plan. The solutions promotion gives larger rebates for companies that acquire their new iSeries machinery and applications software before September 30 with an invoice date of no later October 12; the deal gives smaller rebates to companies that buy before December 31 and get invoiced by January 10, 2002. Odds are, if the economy continues to weaken, IBM will extend this deal into the first or second quarter of 2002, although the rebates could be set at any level at that time. The rebates could be set higher if the economy is much worse, or no better if it the economy remains more or less flat.

by Timothy Prickett Morgan

DataMirror, one of the three high availability vendors offering a broad set of system clustering and application mirroring applications for the OS/400 platform, last week announced a special competitive upgrade promotion that will be in effect from October 2 through December 31. The competitive upgrade promotion is the first in a number of promotions that DataMirror expects to launch in the fourth quarter of this year to boost business.

The competitive upgrade promotion that DataMirror is offering applies to its iCluster and High Availability Suite programs for OS/400. Companies that are currently using competing products from Vision Solutions (Vision Suite) or Lakeview Technology (MIMIX) can get a discount of 50 percent off the cost of acquiring either iCluster or High Availability Suite if they buy the software before December 31.

DataMirror, which gets most of its revenues from sales of data transformation middleware, and not from its HA software for the OS/400 platform, has to be aggressive in trying to take business away from Lakeview Technology and Vision Solutions, which dominate that part of the HA business. Presumably, after customers have gone through the arduous and expensive task of implementing HA products, they are reluctant to jump to a new vendor. Hence, the necessity to give a large discount on software fees.

But DataMirror, as well as every other large and small HA vendor, knows that the real action in this market is going to be new customers who, after the attacks on September 11, have seen the need for HA solutions, particularly off-site data archiving and remote-system mirroring. To that end, DataMirror is offering a 50 percent discount on both iCluster and High Availability Suite to customers in the iSeries and AS/400 market who do not have an HA solution installed. This discount will be in effect until December 31 as well.