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ShaoLin Updates Linux High Availability Software

ShaoLin Microsystems, a high availability software maker that specializes in the Linux platform, this week announced it has enhanced its InfiniCluster and Volume Replicator software. InfiniCluster allows a large number of Linux server nodes to share workloads and to provide active-active failover support for those nodes in the network. ShaoLin says many parallel clustering solutions in the Linux and Unix market are limited to 16-node or 32-node scalability, but says its InfiniCluster solution can scale much further than this. ShaoLin can do this because it has hacked the Linux kernel and added what it calls the General Parallel Cluster Infrastructure (GPCI) to Linux, which has layers of fault detection for Linux and the applications that ride on top of it and which provides the heartbeat synchronization that allows nodes to share work and takeover for each other in the event of an impending crash. InfiniCluster is one step above ShaoLin's HA Cluster 1.0 product, which is limited to two-node clustering. ShaoLin has cut the price of HA Cluster 1.0 to $1,995 from $3,990, but has not provided pricing on InfiniCluster.

ShaoLin also said it has a new release of its Volume Replicator software for Linux, which replicates data from one Linux server to another one over any IP network. The updated Volume Replicator software can integrate with InfiniCluster, and it can support one-to-one, one-to-many, and many-to-many replications across the nodes in a cluster. ShaoLin has similarly not provided pricing information on the latest release of Volume Replicator.

IBM Brings SUSE Linux Into Innovation Centers for Partners

IBM and Novell last week announced an expanded partnership arrangement bringing Novell's SUSE Linux operating systems and their related development tools to servers within IBM's various "innovation centers" to help independent software vendors code applications tuned specifically for SUSE Linux. The IBM-Novell deal follows a similar arrangement that Big Blue made with rival Linux distro Red Hat back in early December 2004.

The IBM-Novell arrangement, like the Red Hat deal, did not involve any money exchanging hands between the two, says Roy Aho, director for technical services and support for ISV and developer relations at IBM. Novell's SUSE Linux will be installed on X86, mainframe, and Power servers at nine centers spread around North America, Europe, and Asia. IBM has over 25 big innovation centers around the world, plus a number of smaller satellite offices within different regions, all designed to allow ISV partners to come in and port their code to IBM hardware running different operating system platforms. IBM and Novell will be rolling out SUSE Linux Enterprise Servers at centers in: San Mateo, California; Waltham, Massachusetts; Chicago, Illinois; Hursley, England; Paris, France; Stuttgart, Germany; Bangalore, India; Shanghai, China; and Sydney, Australia. The SUSE products can be installed on all of IBM's eServer platforms. Partners also get help from IBM and Novell Linux server experts as they do their application ports. Novell is also offering its Linux certification process through the centers. ISVs also get their own copies of SUSE Linux Enterprise Server 9 to play with as part of the deal, which is worth a few grand.

Red Hat Hires New Marketing Chief

Commercial Linux distributor Red Hat continues to build its marketing team, and has hired Timothy Yeaton to be its senior vice president of marketing.

Yeaton was formerly president and CEO of data integration software maker Avaki. He came to that job after holding the position of senior vice president and general manager of server products at Macromedia (he came from the Allaire side of the business). Yeaton is not a newbie to the Linux market. He was vice president and general manager of Unix and Linux systems at Compaq prior to its acquisition by Hewlett-Packard. Compaq, you will remember, was the first major server and workstation vendor that took Linux seriously, and Yeaton was one of the reasons why this was the case.

HP to Attack SMB Market with New Blade Packaging

The great thing about blade servers is that they can pack a lot of computing power in a small space; but this also means the amount of electrical power they draw and the amount of heat they generate is also great. The blade servers from market leaders IBM and Hewlett-Packard draw three-phase, 240-volt power, in fact. Needing to have this special wiring for a blade server limits the usefulness of blades, particularly among small and medium sized businesses that do not have what we might call a traditional data center. While neither IBM nor HP has gotten a 120-volt blade server chassis out the door that can support Xeon-based processors (HP used to sell a Pentium blade server that did, but it was not enthusiastically purchased by customers, so HP has relegated it to a remote PC solution), HP is trying to get one step closer.

This week, HP said that in May it will begin shipping a special external power adapter that can power up a single BladeSystem chassis even though it plugs into single-phase, 220-volt power. This power adapter will fit in a 1U rack form factor and will be sold as a bundled solution to SMB customers are part of HP's "Smart Office" initiative. HP says about half of its blade servers are sold into medium sized businesses, but that it wants to push the technology down into smaller organizations. To that end, says Vince Gayman, vice president of small and midsize product solutions at HP, the company will host a series of road shows in major cities worldwide to introduce customers to blade servers. As part of a "Blades for Business" program, the company will also be rolling out soft bundles of blades, storage, and implementation services to make it easier for SMB customers to pick blades over traditional rack or tower servers. The idea is to have a target price in the range of $20,000 for a complete hardware setup. HP and its partners believe they can sell this into the SMB base. The idea, says Gayman, is to lower the crossover point where using blades is preferable. Currently that point is from 6 to 8 servers; Gayman's target is the 4 to 5 server level.

Merrill Lynch Says Server Market Could Slow in 2005 and 2006

Milunovich reckons the uptick in server sales and shipments, which has been remarkable in the past four quarters, is really just an "echo" of the Y2K and dot-com buildouts. He believes server revenue growth could shift from the 6 percent growth the industry booked in 2004 (according to figures from IDC) down to zero in the 2005 to 2006 timeframe. And in terms of server shipment growth, Milunovich thinks it could shift from the 20 percent growth we saw at the end of 2004 to the low teens--and do so despite the growing use of Wintel and Lintel iron by companies large and small around the world. He also expects Windows growth on servers will all but stop by the end of 2007 and Linux growth will cool as well, dropping from 44 percent growth in 2004 to about 15 percent growth by 2008. Significantly, by 2008, Linux will be the only server platform showing revenue growth, according to Merrill Lynch's models, which are based on IDC and proprietary data.

IBM Buys Other Half of Informix with Ascential Acquisition

Four years ago, in April 2001 to be precise, IBM bought the relational database business from the former Informix for $1 billion in cash and boosted its market share in the database market in one fell swoop. Four years later, IBM is paying $1.1 billion in cash to buy the other part of Informix, which is known as Ascential Software and which sells data transformation and integration software.

Back in 2001, $1 billion in cash was a lot to spend for the Informix database business, which posted sales of around $800 million at what was probably around breakeven in 2000. The $1.1 billion price that IBM is paying for Ascential is still pretty high, considering the company generated $272 million in sales in 2005 and only made a profit of $6 million. In the prior year, Ascential lost $13 million on $186 million in sales, and in 2002, its first full year out of the database business, the company sold $113 million in data transformation and management software and related services, but it lost $106 million. But because Ascential got to keep the original $1 billion IBM paid for the Informix database products, even with those losses, Ascential had $481 million in the bank as cash and short-term investments. With its sales growing about 20 percent year-on-year, Ascential was probably looking at perhaps having sales of around $325 million in 2005, but probably with modest profits because even though Ascential is an 800-pound gorilla in this area of the database and data warehousing tools market, there are other players, such as Informatica and others, that are chasing the money. All of these factors were more or less already in the Ascential stock price, and IBM only ended up paying about a 15 percent premium over the market capitalization of Ascential prior to when the deal was announced, and when you factor in that load of cash, IBM's reckoning of what Ascential was worth before the deal was announced was in the neighborhood of $440 million, with a premium of $176 million (that's the 15 percent over the original market cap) on top of that.

The two main jobs that the tools of these vendors do is to cleanse production data of errors and redundancies and then load it from the production databases into data warehouses. Ascential, thanks to the original $1 billion in cash from IBM in the Informix database deal, went from a respected player to a feared player with deep pockets in the data transformation, data extraction and loading, and data cleansing areas.

Informatica, which has been jousting with Ascential for the top spot in this market for years, is putting the best face forward on the IBM-Ascential deal. "A vendor-specific data integration offering may be favored by those customers needing to standardize on a single software provider, but will not address the requirements for open, best-of-breed software from the broader marketplace," the company said in a statement, adding that it was committed to its relationship with IBM and tightly integrating Big Blue's DB2 database with its PowerExchange tools. As Informatica, Ascential, and IBM well know, by acquiring Ascential, IBM has anointed Informatica as the largest pure-play data integration/cleansing player in the market. How much value this has in the long run remains to be seen. Especially once someone decides to do open source variations of these programs and upset the whole apple cart.

It is not difficult to see that any major database player--for example, Oracle and Microsoft--would be interested in snatching up Informatica now that IBM has bought Ascential. And you can expect the talk on Wall Street over the next few weeks to be about who is going to shell out the $700 million to $1 billion (that's my guess) that will be needed to acquire Informatica, which has a market cap of around $680 million as we go to press and which had $241 million in cash and equivalents in the bank as 2004 drew to a close. Microsoft has the money, but may not be interested, and Oracle may be interested, but has just blown a lot of money on PeopleSoft and is in the middle of a bidding war with SAP over the acquisition of retail ERP software specialist Retek.

Fiorina Misses Out on World Bank Gig

Last week, American president George Bush surprised many in the IT and international political communities when he named Paul Wolfowitz, the U.S. Deputy Secretary of Defense who was one of the architects of American policy in Iraq, to head the World Bank. Former Hewlett-Packard chairman and CEO, Carly Fiorina, had been rumored to be in the running for the president position at the World Bank, but her appointment, considering she was ousted rather unceremoniously from HP a few months ago, would have its own problems. For the past several decades, the United States has picked the head of the World Bank, which finances big Third World projects using First World investments (primarily from the G7 countries) and European countries have nominated the head of the International Monetary Fund, which provides emergency relief for countries experiencing financial disasters. Europe has reacted somewhat coolly to Bush's nomination of Wolfowitz, so Fiorina might get another shot at the top World Bank job. Then again, it may go to someone else. Louis Gerstner, who is the former head of IBM and who is currently chairman of The Carlyle Group, comes immediately to mind.