The Four Hundred

IBM last week announced that at the end of May it had shipped 1,000 pSeries Regatta servers, a milestone for shipments, which demonstrates that the pSeries 670 midrange and pSeries 690 enterprise servers are being accepted by the Unix customer base in a manner similar to past IBM Unix server generations. More importantly for iSeries customers, the pSeries Regatta shipment numbers suggest that IBM can meet demand for Regattas, which are being sold under the iSeries Model 890 moniker.

The pSeries 690 Regatta machines were announced in October 2001 and started shipping in mid-December of that year. The pSeries 670 servers were announced at the end of April and started shipping almost immediately. IBM is including both types of machine in the shipment numbers, and there is no way to ascertain how many shipments were for pSeries 690 or pSeries 670 frames. The pSeries 690 "Regatta-H" machines offer 16- and 32-way symmetric multiprocessing configurations for commercial data processing and eight- and 16-way configurations for high-performance computing applications; these machines use a mix of Power4 processors running at 1.1 GHz and 1.3 GHz. The pSeries 670 servers support four-, eight-, and 16-way configurations using 1.1 GHz Power4 processors.

What I do know, from watching the supercomputing and Unix server markets for the last decade, is that IBM has been taking the high-performance computing market by storm and had booked lots of big Regatta cluster deals for government and private research institutions well in advance of the announcement of the Regattas last year. The high-performance computing market could have accounted for as many as 400 of those Regattas, particularly because the Oracle 9i database, which drives a large percentage of commercial Unix server sales, has only been available since the end of May, running on the AIX 5L 5.1 operating system. It's my guess that IBM is seeing very enthusiastic adoption of the pSeries 670 and 690 servers among the high-performance computing community, but over time this market will represent a more traditional 20 to 25 percent of total Regatta server shipments. The lion's share of IBM's Unix server shipments has always been for supporting enterprise applications, but a slice of Regatta sales is also being dedicated to server consolidation of print, file, and Web server workloads.

The good news, as far as high-end iSeries customers are concerned, is that the Regatta shipments are consistent with past IBM enterprise Unix server shipments, and this suggests IBM has got its supply of machines in balance with demand. This was not the case 18 months ago, as we all remember, when IBM could not build copper-based processors for its RS/6000-pSeries and AS/400-iSeries lines fast enough to meet demand. IBM's current estimated shipment scheduler says it can ship pSeries 690 servers out of its Poughkeepsie, New York, factories within about two weeks after they are ordered. The pSeries 670 servers, which come out of the same factories, take about four weeks to ship. The iSeries Model 890 servers are being built at IBM's Rochester, Minnesota, facilities and are expected be generally available on August 30, along with OS/400 V5R2. Current iSeries Model 270 and 8XX servers can be shipped within a week of order placement, out of the Rochester factories. It takes about two weeks to deliver a pSeries 680 server, which has the same chassis and electronics complex used in the iSeries Model 840.

On the storage front, IBM is quite happy to have shipped 10,000 of its Shark enterprise storage arrays, which can be attached to OS/400, mainframe, Unix, and Windows servers. The Sharks were announced in the summer of 1999, and by this time last year, IBM had sold, by my estimate, about 6,000 of the Sharks. IBM has kicked its sales pitch up another notch and cranked out another 4,000 sales in the past 12 months, which is a very good run rate for these very large and expensive storage servers. IBM has made a lot of its market share gains at mainframe shops in the past 18 months, mainly because, in early 2001, it started delivering disk replication software that had been available on EMC's Symmetrix enterprise disk arrays for two years before that. IBM says that 74 companies in the worldwide Fortune 100 ranking have acquired Shark arrays.

IBM appears to have caught up with EMC, in terms of unit shipments of enterprise storage arrays, but it has a long way to go to catch up with EMC when it comes to installed base and revenue market share. IBM has around 13 percent of the $15 billion stand-alone RAID disk array market (which includes Sharks and other lower-end IBM disk arrays), compared with EMC's 25 percent of the revenue pie (including Symmetrix and Clariion arrays). EMC has shipped an estimated 45,000 Symmetrix arrays in the past decade, and a large number of these machines are still installed and doing productive work.

Perhaps most significantly for AS/400 and iSeries shops, EMC commands about 20 percent of the revenue share of the disk array sales among the largest AS/400 and iSeries shops. These are customers who tend to have mixed server platforms and who want a storage array that reflects those needs. It is unclear what the market penetration of the Shark arrays are at the largest OS/400 shops, but IBM has probably sold quite a few machines into these accounts as well.