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Disk Array Sales Taper Off in Q4 2004

For the first time in a long time, sales of internal disk arrays embedded inside servers has buoyed the overall market for disk arrays, say the analysts at IDC. While disk capacity purchases are growing at a very fast clip, the price/performance pressure among makers of disk arrays is intense, and it is quite remarkable that there is any revenue growth at all. In the fourth quarter, worldwide disk array sales were up 1.8 percent to $5.8 billion, but sales of external disk arrays only grew by a scant 1 percent to reach $3.8 billion. The only reason that there was any growth at all is because a significant boost in server sales with embedded disk arrays helped push sales. Even still, embedded array sales were not spectacular, with sales of just under $2 billion, up 4 percent compared to this time last year. The disk array market remains one of the toughest markets in IT, and IDC said that sales in the final quarter of 2004 were weaker than expected.

For the full year, the aggregate disk array market was up 3.2 percent to $20.9 billion. Hewlett-Packard had the top spot in revenue rankings, with $4.9 billion in sales, even though its sales slipped by 5.6 percent. (HP's entry and midrange disk array business has been problematic since the Compaq merger, and its products were looking a little long in the tooth until they were refreshed in mid-year.) IBM, which has been pumping out various storage subsystems based on its Power5 family of servers throughout the second half of 2004, was able to boost its sales by 1.3 percent to $4.3 billion. However, in the external disk array market, where these Power5 products are sold, IBM's sales in 2004 declined by 4.3 percent--almost as bad as HP's own 6.3 percent decline in external array sales. IBM has its own issues, so don't think it is just HP. EMC and Dell partnered a year and a half ago to sell entry and midrange disk arrays, and that partnership has worked well--for now, at least. EMC boosted its revenue by 18.4 percent in the worldwide disk array market to just under $3 billion, and Dell saw 17.3 percent growth to hit just over $1.5 billion in 2004. Hitachi, which has Sun Microsystems and HP as its resellers for high-end arrays, was the number five disk array storage vendor in 2004, with $1.3 billion in sales and a fraction of a percent of growth. Sun slipped behind Hitachi after seeing a 4.7 percent decline in sales in 2004; it sold some $1.2 billion in disk arrays last year.

The network-attached storage (NAS) market (which includes Ethernet-based as well as iSCSI-based external arrays) accounted for $2.4 billion in sales in the fourth quarter of 2004, growing 11.6 percent. This is a hotly-contested market, with EMC, HP, IBM, and Network Appliance, the creator of the NAS idea, fighting for market share.

IBM to Pump $300 Million Into SMB Services, Consulting for Partners

Last week at its annual PartnerWorld event, IBM said that it would be investing $300 million to help its business partner channel sell services and consulting to small and medium business (SMB) customers.

"Analysts are saying SMB services are one of the hottest growth areas in the industry, and at the same time it is a highly competitive and localized marketplace," said Jim Corgel, general manager of small and mid-sized business at IBM's Global Services unit in announcing the partner investment. "IBM is making a significant investment to expand its SMB technology and consulting services focus and collaborate with Business Partners around the world to create solutions that help SMBs improve their business performance." He said that IDC reckons that SMB customers will spend $360 billion on information technology in 2005.

To assist the largely regional system integrators who serve the SMB market, IBM is creating dedicated teams for each region to help partners figure out how to sell more services to SMB customers. Partners will also be allowed to resell various Express Managed Services created by IBM, which cover application management, business transformation outsourcing and other exotic services that small businesses do not typically think they can afford. IBM has been testing this concept with some partners in the United States and Europe and has found enough success to roll it out as a product that all partners can participate in selling. Partners will also be allowed to sell IBM's hosting and strategic outsourcing services.

Jack Henry Acquires Tangent Analytics

Midrange financial application software vendor Jack Henry & Associates said last week that it had acquired Tangent Analytics, a specialist in Web-based business analytic software that JHA just announced it had partnered with to deliver integrated banking software and data analytics back in December 2004. The terms of the acquisition were not released, and JHA said that the deal would not have a material impact on revenues or earnings in the near term.

Tangent was founded in 1999 and is located in Winston-Salem, North Carolina, and its BI-Navigator framework and related Intelligence Warehouse product is essentially a data warehouse-driven executive information system that was being used by JHA to create a dashboard for bank managers so they could better run their banks.

About a month ago, Monett, Missouri-based JHA reported the best quarter in its 29-year history, with sales of $136 million, up 21 percent, and net income of $17.7 million, up 22 percent.

COMMON Picks New Interim Director from Within Its Ranks

The outgoing executive director of the COMMON iSeries user group, Lynne Schwartz, has recently announced that Ralph Gervasi, who is the group's current membership manager, is being tapped to be the interim executive director of the organization. Gervasi, who has been involved with COMMON for the past four years, will take the reins of the organization when Schwartz departs on March 31, she said in an email to COMMON members.

Gervasi has 15 years of experience in association management, Schwartz said, in a variety of different fields. It is also worth noting that he has a bachelor's of science degree in information technology from DeVry University and a bachelor's of arts in business administration from Dominican University, so the concepts and issues that COMMON members are dealing with in their professional lives are something he will be familiar with.

TeamQuest Supports IBM Chiphopper Tools for Linux on eServer

TeamQuest, the Clear Water, Iowa, maker of performance management and capacity planning software, said last week that it was one of the ISVs who had participated in IBM's development and testing of its "Chiphopper" tools for making it easier to create a single set of Linux application code to run across the various architectures in its eServer product lines. TeamQuest has been supporting IBM's OS/400, Unix, and mainframe servers with its performance tools for some time, so extending those tools to Linux on the same platforms as well as on the xSeries X86-based servers running Linux is just a logical extension.

VeriFone Completes GO Software Acquisition

VeriFone, a San Jose-based supplier of electronic payment software and solutions, announced last week it had completed its acquisition of the GO Software electronic payment software from Tectonic Network, a provider of software for OS/400 and other platforms based in Kennesaw, Georgia, that most of us knew as Return On Investment Corporation before the company recently changed its name. When ROI sold off the GO Software unit to VeriFone, the other division in ROI was called Tectonic and it has expertise in construction software and services related to the construction industry. GO Software sold two primary software packages, PC Charge and RiTA Server, the latter of which is a Java-based program that runs on OS/400 and just about any other platform. Go Software had an installed base of 150,000 customers, which is a staggering number. Financial details of the acquisition were not announced.

Slackware Project Delivers Slack/390 Linux; How About Slack/400?

Some of the key people behind the Slackware variant of the Linux operating system have announced a version of Slackware for IBM's System/390 and zSeries mainframes. Slack/390, as the port of the popular Slackware for X86 Linux variant is called, is the culmination of the four years of work to move the highly respected (in Linux circles) Slackware Linux to the mainframe. Slackware joins Debian in offering a free version of Linux for mainframes and Red Hat and Novell, which charge an arm and a leg for their Linux implementations on those venerable IBM servers. Red Hat and Novell also charge big bucks for their iSeries and i5 implementations of their Linux, which begs the question: How about Slack/400?

The Slackware Project bothered with a mainframe port because plenty of people want to put Linux in a logical partition or in a z/VM partition on their mainframes to play around, but they don't want to use evaluation versions from Red Hat or Novell and they don't want to pay a lot of money to these companies even after they decide to buy. Sine Nomine Associates, a systems and network engineering company based in Ashburn, Virginia, that lent the Slack/390 project some time on its Multiprise 3000 mainframe to help it create the Slack variant for mainframes, is offering commercial-grade technical support for the Slack/390 edition. The company already offers support for the Debian, Red Hat, and Novell Linuxes for the IBM mainframe line, and it is likely that it would be interested in helping a port to the iSeries if someone sponsored the project.

Mike Kershaw, of Marist College (near IBM's mainframe stomping grounds in Poughkeepsie, New York) and Mark Post, an infrastructure specialist at Electronic Data Systems, are responsible for creating the Slack/390 port from the X86 version, which was created by Patrick Volkerding in 1993 and is still maintained by him. Kershaw is buried in work these days, and Post has taken over as main developer and maintainer of Slack/390. The Slack Project's X86 and 390 ports are both based on the Linux 2.4.26 kernel, and run in 32-bit mode on X86 systems and 31-bit mode on the mainframes. The 64-bit Linux 2.6 kernel is still in beta support, but some intrepid iSeries bitwiddlers could get involved now and probably create a Slack/400 port in fairly short order based on the Slack/390 team's experience. The iSeries base needs an alternative to Red Hat and Novell, which are pretty costly for companies that just want to play or do infrastructure workloads on Linux partitions.