A Chat with Ross Mauri, Power Systems GM

Published: November 2, 2009

by Timothy Prickett Morgan

As part of IBM's Dynamic Infrastructure announcement blast on October 20 that we told you about in last week's issues of The Four Hundred and Four Hundred Stuff, and which we continue to chew through in this week's newsletter, Ross Mauri, general manager of the Power Systems division, put out a short statement on the IBM i site that encapsulated the upcoming i 7.1 release and the future Power7-based servers.

It is something of an annual ritual for the general manager to re-up the commitment for the AS/400, iSeries, System i, and Power Systems i platform. Since the System i platform was formally merged into the System p line in April 2008 (a process that began in the mid-1990s and first started with the launch of the "Northstar" PowerPC servers in 1997, which had the same hardware with AS/400 and RS/6000 brands), keeping the i shops from getting jumpy is important. The progeny of the AS/400 no longer has its own division, its own sales and marketing team, its own techies, and its own financials, so those of us on the outside of IBM have no idea how well or poorly the platform is doing.

You can read Mauri's October 20 statement here, which basically says that the current i 6.1.1 release and the future i 7.1 release (yes, I am going to start calling it that because I will lose my mind saying "future i 6.2 or perhaps i 7.1 release" every time I try to talk about it) will have certain features and that Power7 iron will be run the i platform.

I don't think anyone doubted that--IBM is not insane, even if it can be short-sighted when it comes to weighing the needs of AS/400 shops and its own quarterly stock buying habits--but it is nice to be reassured all the same.

Mauri was at IBM's Information on Demand extravaganza in Las Vegas last week, but took some time to do a short question and answer interview over email with me as I tried to get a little more color on how the i part of the Power Systems business is doing. Mauri is not really allowed to say much, of course, because of selective disclosure rules governing public companies like Big Blue. We do what we can both as journalists and general managers, I suppose.

Timothy Prickett Morgan: So, what can you tell me about what boxes are moving? IBM has said that Power 520 machines are 95 percent of the shipments. Is this still the case? I assume that the Power 570 is still the revenue workhorse, but maybe the Power 550 and Power 595 are splitting it with the Power 570 these days?

Ross Mauri: The first point I'd like to note is that 100 percent of our shipments for IBM i in the third quarter were on Power6. That tells you that we have made a very successful transition to our converged product line, with no changes required for i applications. That should give great confidence to anyone looking to move up to Power6.

While we don't report revenue or volumes details of individual products, I can say that nearly 90 percent of our shipments for IBM i so far this year have been on the Power 520. That number has grown as we delivered four-core support for IBM i in the Power 520--a move that you supported in your newsletter.

We are also seeing additional IBM i sales on our new JS23 and JS43 blades. The 520 and blade sales reflect the dual nature of the IBM i market: a large, small and mid-sized customer community, and a strong but select group of IBM i users in large enterprises. In those large enterprises, customers generally run IBM i in the data center on systems that are optimized with virtualization. They value the additional system resiliency features of the Power 570 and 595, which continue to be their products of choice.

TPM: What do Power Systems i sales look like in the United States and Europe compared to India and China? I have an awful lot of readers in India these days, most likely due more to the application modernization work IT companies are doing in India than the Indian AS/400 installed base. But I am curious what is selling where when it comes to the i platform.

RM: It is difficult to generalize across worldwide markets, since market conditions and solutions vary widely by country. For example, Italy has traditionally been a market dominated by small companies that typically run the Power 520 servers with IBM i, while the United Kingdom has many larger enterprises that use Power 570 or 595 servers.

IBM has recently changed its sales and marketing organizations to better optimize for major markets, like North America, Western Europe, and Japan, versus growth markets like Eastern Europe, Latin America, India and China. One of the reasons we made that change was that in 2008, the major markets accounted for 82 percent of IBM's revenue, but only 5 percent of our revenue growth, whereas growth markets accounted for 18 percent of our revenue, but 10 percent of our growth.

Regarding IBM i shipments, we of course have a strong install base in major markets, and they represent approximately 80 percent of our i business in 2009. But, we have also been successful in growth markets like Latin America, Eastern Europe, and the ASEAN countries. While China is a growth market strongly dominated by Unix, we do have a strong IBM i presence there in the banking and financial services segments.

TPM: Are shipments and revenues for the i machines meeting current expectations?

RM: We don't report results separately for IBM i, but I can say that it is a vital and strategic element of our Power Systems business. That's why we are making substantial investments in IBM i, as you saw with the preview of our next release coming next year.

TPM: IBM's chief financial officer, Mark Loughridge, has said the Power7 launch will roll out over the course of 2010 with high-end, midrange, and entry systems coming out (not necessarily in that order, but I got the feeling it will be kinda in that order). Is that in fact the general shape of the Power7 rollout? And if so, will the next release of the i OS come out at the same time on these Power7 boxes as AIX and Linux do? Or will the OSes be staged as well as the iron?

RM: It's too early to give you the details of the Power7 rollout beyond what Mark Loughridge has already said, but I can tell you that we plan to feature the new release of IBM i at COMMON in Orlando in May.

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