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Red Hat's Sales Continue Their Steady Rise

Commercial Linux distributor Red Hat reported its financial results for the first quarter of fiscal 2005 just after we went to press before the July 4th holiday break, and the company was able to book $60.8 million in sales in the quarter, an increase of 46 percent compared to the same quarter in the same quarter in fiscal 2004. Sales of enterprise software subscriptions (mostly for its server products) for the quarter were up 63 percent to 48.7 million. Net income did not grow so much, with only $12.6 million (7 cents a share) dropping to the bottom line. In the first quarter of last year, Red Hat booked $11.6 million in profits. That is only a 5 percent boost in profits against sales growth that is nine times larger. But, don't worry. Red Hat has $157.9 million in deferred revenue booked, more than double the amount this time last year, and it has $951.5 million in cash and equivalents in the bank. There are worse places to be.

Red Hat said that it had sold over 190,000 new and renewal subscriptions to its Linux and related products in the quarter, and had brought in 15,000 new customers as well. The company also boosted the percentage of its sales through its channel (which is dominated by the key server makers) to 60 percent in the quarter, and increase in four points since the fourth quarter of fiscal 2004.

Due to currency issues, Red Hat slightly revised its projections for fiscal 2005, and says it expects sales of between $265 million and $275 million, down by $5 million compared to an earlier projection. Red Hat kept its earnings projections to between 28 cents and 32 cents a share, which suggests there will be $5 million worth of belt tightening in the next nine months.

IBM Launches Dual-Core PowerPC 970MP Chip

In a move that will be widely characterized as maybe not too little but certainly too late, IBM announced the dual-core PowerPC 970MP processor at a Power.org forum in Tokyo last Friday. The new 64-bit chip is a dual-core implementation of the current single-core PowerPC 970FX processor, which was also enhanced.

The "Antares" PowerPC 970MP is apparently a true dual-core implementation of the PowerPC, not two "Altair" PowerPC 970FX processors jammed together in a single chip package and sharing a single socket with some SMP electronics tossed in to make them share the CPU bus. The Antares chip will scale from 1.4 GHz to 2.5 GHz, and depending on the overhead of using the dual-core chip inside one socket, should deliver just under twice the performance for equivalent clock speed compared to single-core PowerPC 970FX chips (also known as G5 processors by Apple Computer). The reason that the performance will double is that each core in the Antares chip has a dedicated 1 MB L2 cache, compared to the 512 KB L2 caches in the Altair 970FX chips. Neither the 970MP nor the 970FX support L3 caches. The original "GigaProcessor Ultra Lite" PowerPC 970, the 970FX, and the 970MP all have 32 KB of L1 data cache and 64 KB of L1 instruction cache per core.

In addition to the dual-core Antares chip, IBM also announced kickers to the 970FX chips that offer lower power consumption and heat dissipation compared to the existing chips. The 970FX chips span up to 2.7 GHz clock speeds, but they generate too much heat to be used in a laptop--which is one of the reasons that Apple is dumping PowerPC in favor of X64 chips from Intel Corp. A new 1.4 GHz 970FX chip has an operating power of only 13 watts under normal workloads, according to IBM, and a 1.6 GHz version of the rev on the 970FX consumes only 16 watts.

Apple will presumably get these new PowerPC 970FX and 970MP processors and drop them into its Power Mac desktop and Xserve server lines as soon as possible. IBM did not mention the "A" word at the Power.org forum meeting in Japan, and nor did it say when it would make the chips available in its own JS20 BladeCenter blade servers, which run Linux and AIX. Why IBM doesn't have its own AIX and Linux workstations based on these PowerPC 970 chips is a bit of a mystery. But then again, so are many things that IT vendors do and choose not to do.

AMD Readies Socket 939 Opteron, Debuts Top-End Athlon 64

In a move that shows Advanced Micro Devices is paying attention and will try every technical trick in the book to make its Athlon and Opteron processors desirable in a chip market dominated by rival Intel, AMD will in the third quarter deliver a 64-bit, dual-core Opteron 100 Series processor that supports unbuffered memory and that plugs into the socket 939 slots that its Athlon processors currently plug into.

So what, right? Well, this is a very interesting development for a few different reasons. For the first time, an Opteron processor will be able to use unbuffered main memory; all Opterons require buffered (or registered) main memory, which increases the reliability of the systems but which has the effect of decreasing the memory bandwidth on the chips. With buffered main memory, registers are added to the main memory module that allow it to be reliably moved around the memory subsystem without soft errors (due to random electronic noise) messing up the data. This buffering increases reliability, which is good for a server that supports many users and for applications that get cranky about memory errors. Because of all the extra electronics, buffered main memory is more expensive, which is why PCs don't tend to use it and why the Athlon is a socket 939 chip.

The socket 940-based Opterons don't just have an extra pin; they plug into more complex motherboards that are usually designed to support multiple processors that make use of cache coherency between processors to create SMP or NUMA systems. AMD didn't just clip a wire to turn an Opteron into an Athlon 64. The Athlon chip is missing a lot of other electronics and plugs into cheaper motherboards. The Opteron processor also has a much more rigorous testing and qualification regimen, according to John Fowler, general manager of Sun Microsystems' Network Systems Group. Sun's new "Marrakesh" Ultra 20 workstation is the first product based on the forthcoming socket 939 Opteron processor (see "Sun Gets First Dibs on New Opterons for Entry Workstation" from our sister newsletter, The Unix Guardian, for more on that).

AMD apparently plans to ship both single-core and dual-core versions of the Opteron 100 Series chips in the socket 939 pinout, and company sources say that it is absolutely intentional that these socket 939 chips were created to make inexpensive workstations and servers. Not just workstations. None of the server vendors has figured out that if you want to beat Dell in the single-processor server racket, which it pretty much owns, you are going to have to deliver something compelling and cheap--like a dual-core, socket 939 Opteron that beats the pants off of a Celeron- or Pentium-based entry server.

Every time I have brought up the question with Hewlett-Packard, Sun, IBM, and others, I have been told that there is no market for this, that the entry server customer is too conservative to take a risk on Opterons, no matter how many pins they have. Horse hockey. Anyone pushing a dual-core, socket 939 Opteron server with up to 4 GB of main memory and a decent amount of I/O slots can beat Dell. The bang for the buck will be absolutely compelling, and so will the smoothness running a dual-core chip compared to a single-core chip. And if there is a memory error, believe me, customers will almost certainly blame Windows or Linux, the latter being used only in a minority of entry servers among SMBs and the former being the platform of choice by a heavy margin for SMBs.

Dell Adds McData Switches to Blade Servers

Server maker Dell said last week that it is offering McData's 4314 Fibre Channel switches for its PowerEdge 1855 blade servers. Dell is already peddling Brocade Communications Systems' Silkworm 3014 Fibre Channel switches, as well as Cisco Systems' Topspin InfiniBand switches in its blade enclosures.

The InfiniBand gear can be used to lash blade servers in a single chassis or across multiple chassis together as well as for connecting blades to external storage. InfiniBand was supposed to be the third-generation of I/O technology for servers, but it has mostly attained market traction as a means of connecting modest servers together for HPC or database clusters. InfiniBand was supposed to make Fibre Channel unnecessary, but that has not exactly happened. Fibre Channel is still widely used as the backbone of connectivity between servers and the storage area networks on which servers (whether they are clusters to standalone boxes) store data and through which they often share data. The PowerEdge 1855 chassis has room for two Fibre Channel switches, and both the existing Brocade box and the new McData box plug into the same spots. The Brocade switch Dell is peddling has 10 links to the blade servers and four uplinks to outside gear that can run at 1 Gb/sec or 2 Gb/sec in either full-fabric mode for peak performance and scalability or Value Line 2 mode, which is limited to scaling to two switches in a fabric and which costs less. The McData FC switch has 10 internal ports and four uplinks as well, but does not have a VL2 mode. The PowerEdge 1855s support various 1 Gigabit Ethernet switches as well for connectivity between blades and peripherals. Dell is selling a single McData 4314 switch for $8,999, including four transceivers.

IBM and Hewlett-Packard offer McData and Brocade Fibre Channel switches and Cisco Ethernet switches in their blade servers as well. The McData devices are tweaked versions of switches made by QLogic.

Acer Readies Dual-Core, Two-Socket Opteron Tower Server

Taiwanese computer maker Acer has been gradually ramping up its use of Opteron and Athlon64 processors from Advanced Micro Devices, and starting in July, the company plans to ship a two-socket Opteron-based server. Acer will be pushing the Altos G5350 server into the European market first, and that machine will be its first Opteron-based server.

The Altos line currently includes rack and tower-based servers based on Intel processors. Acer uses the 64-bit Pentium 4 processors in single-socket G310 tower and R310 rack servers, dual 64-bit Xeon processors in its G520 and G710 tower and R510, R700, and R710 rack servers, and four relatively ancient 32-bit Xeon "Foster" processors in the four-way G900 machine, which has been effectively replaced by the two-way R710 in terms of performance. But the R710 is a rack-mounted machine, not the kind of tower server that small and medium businesses buy. However, the new tower-based G5350 server, which only has two Opteron sockets, will support dual-core as well as single-core Opteron 200 series processors, which means it can deliver the same number of processor cores as the tower G900 server, but do so in a much smaller tower. The G900, like the R710 two-way Xeon DP rack server, can support up to 24 GB of main memory. The future G5350 will top out at a slightly less capacious 16 GB, which is still probably enough main memory for a server that spans from one to four cores. The machine will be based on AMD's 8000 series chipset, and have two PCI slots and four PCI-X slots and will support Serial ATA and Ultra320 SCSI disk drives. Acer did not say what pricing would be like on the box, but claims that this will be the first two-slot, four-core server based on the Opterons available in Europe.

Traditionally, Acer supports Microsoft's Windows 2000 and Windows Server 2003 operating systems as well as Red Hat's Linux, SCO Group's OpenServer and UnixWare, and Novell's NetWare. With the G5350, however, the Novell has already certified the machine to run SUSE Linux Enterprise Server 9. And because Acer is using the Opteron processor as well as standard RAID cards and other peripherals, Acer could go as far as to certify Sun Microsystems Inc's Solaris 10 platform on the box as well. Officially, Microsoft Windows Server X64 Enterprise Edition, Red Hat Linux Enterprise AS 4, SUSE Linux Enterprise Server 9, and NetWare 6.5 will be supported.

Acer has just launched a line of laptops co-branded with car maker Ferarri based on the Athlon 64 processors, which are trimmed-down versions of the Opteron server chip; it has also launched a media PC under the Aspire brand that is based on the Athlon 64s.

Java Coders Like Open Source Software

Other survey results, which were compiled by Evans Data, show Microsoft's .NET has established a slight lead over Java in the overall development space, but that situation reverses in the enterprise space, with 60 percent of the development taking place in Java compared to 56 percent in .NET.

Enterprise Management Software Market Grows 11.4 Percent to $6.2 Billion

The enterprise management software market, where the customers are a Who's Who of corporate high rollers, turned in a winning parlay ticket of double digit growth in 2004, according to an accounting of license revenue figures recently completed by Gartner. The analyst firm concluded the market grew 11.4 percent to $6.2 billion.

The top vendor in this field--for the fourth consecutive year--was IBM, which registered 7.5 percent growth and reached $2 billion in revenue. Gartner also ranked IBM as the leader across enterprise management market categories including availability and performance management, configuration management, database management, job scheduling, and network management, plus a general category that includes print management. IBM covers this market with its Tivoli software suite of products.