But Wait, There's More

IDC Says Linux Server Sales to Hit $9.1 Billion in 2008

According to forecasts by IDC, between 2003 and 2008, the Linux server market will grow at a compound annual growth rate of 22.8 percent to reach total sales of $9.1 billion in 2008. IDC reckons that Linux servers will account for 25.7 percent of worldwide shipments by 2008, up from 15.6 percent of shipments in 2003. Two-way servers are the core Linux server, accounting for 74 percent of shipments in 2004. By the way, in the current quarter, Linux server shipments are up 40 percent since this time last year, according to IDC, and that growth rate has been accelerating for the past three years. However, the price of entry servers is falling so fast that revenues cannot keep pace. The CAGR for Linux servers, says IDC, is six times that of the server market as a whole, which is expected to have a CAGR of 3.8 percent from 2003 to 2008.

This year, Linux has taken off on blade servers, where it is installed on about half of the blades sold. Linux was installed on about 20 percent of rack-mounted machines and 11 percent of tower servers in 2004, says IDC.

Novell Ditches Openexchange Server, Supports Netline

If you have been wondering what Novell was going to do with the Openexchange Server messaging and groupware software for Linux that the company got through its acquisition of SuSE, you don't have to wonder any more. Novell is going to stop developing and selling the software. That's the bad news (sort of, but not really). The good news is that neither SuSE or Novell actually created the software, and that the original creator of the program, which rides on top of SuSE Linux Enterprise Server 8, plans to offer a commercial version of the same software, which Novell will resell and support.

As we previously reported this summer, German software developer Netline Internet Service has taken its Open-Xchange Server open source and plans to support it as a layer on top of any commercial Linux, not as a set of programs tightly embedded into a SuSE release. (As a SuSE Linux Openexchange Server shop, we can tell you that this has been annoying at times for SLOX to be a separate product from SLES, particularly concerning patches for the software and tech support in general through Novell.)

Sources at Netline tell us that the commercial version of Open-Xchange Server will be ready sometime in March as both an open source and a commercial distribution. Novell and Netline will both sell the software. Novell customers will be able to run it atop SuSE Enterprise Linux Server 9 and get level one and two support through Novell, which will rely on Netline for level three support. Netline will undoubtedly ink similar deals with other Linux players, and is probably looking at Red Hat, Turbolinux, Mandrakesoft, and Red Flag.

PolyServe Signs Up IBM to Resell Clustering Software

Linux and Windows cluster software specialist PolyServe has announced that IBM has partnered with it so it can resell its Matrix Server clustering software. Under the agreement, IBM will be able to sell Matrix Server, which is a shared data clustering program, on its xSeries and BladeCenter servers, which support both Linux and Windows. Customers who buy IBM's Support Line tech support will also be able to get PolyServe tech support through IBM under the deal.

Matrix Server allows up to 16 servers or blades to access a shared SAN infrastructure to support either infrastructure or clustered database workloads. The file system underlying Matrix Server has a symmetric cluster file system that allows all nodes in the cluster to read and write data to the SANs without bumping heads.

HP Says It Considered Break Up Several Times

Hewlett-Packard hosted its Wall Street analyst meeting in Palo Alto, California, on Tuesday. During a question and answer session, HP's chairman and CEO, Carly Fiorina, and CFO, Bob Wayman, said that on three occasions since the merger with Compaq, in May 2002, the company has contemplated breaking up the company in a number of different ways. The idea was shot down every time by the company's board of directors.

The fact that people keep asking HP about a break up is something that any big company with complex and somewhat unrelated product lines faces. In the late 1980s and early 1990s, IBM suffered the same litany of questions and free advice about breaking itself up when its mainframe business went on the rocks as the IT landscape changed with the advent of Unix servers and client/server applications. IBM's managers and board decided that the company was more valuable as a whole--regardless of the short term gains that might have been made from spinning out then-profitable units and separating them from less-profitable divisions. HP is facing the same choices and criticisms as it tries to balance its consumer and corporate businesses. HP has a very profitable printing business, thanks mostly to ink and toner refills, and it hardly makes money on its various IT units.

What Wall Street just can't seem to countenance with HP, as it could not with IBM a decade ago, is any suggestion that a company exists for something other than wringing out profits and driving up the stock price. HP is right by staying whole, in the moral sense as well as the economic sense. HP is more valuable--and in ways that are not so quantifiable--as a single entity, addressing the gamut of IT needs. Do you spin out research because it doesn't make money? Take a look in the mirror, Wall Street.

AMD to Put Power Management in Server Chips

The future of IT is about using computers more efficiently, which is why Advanced Micro Devices is going to be adding its PowerNow power optimization technology to the server variants of its future Opteron processors. AMD says that PowerNow with Optimized Power Management features will be added to the Opteron line in the first half of 2005. These features were originally used in the laptop versions of AMD's Athlon processors, which have had power management capabilities for more than four years, and it turns out that Opteron chips currently in production using 130 nanometer and 90 nanometer processes include it. However, system BIOSes and operating systems (Windows, Linux, and Solaris) need to be tweaked to take advantage of it.

With PowerNow, as servers run with a diminished workload, the system automatically cuts down on the voltage across the processor and runs it at a slower clock speed, too. This dramatically cuts down on the amount of electricity the chip uses, the heat it generates, and the amount of cooling that is necessary to keep a computer running properly. This saves money on electricity twice over and also allows servers to run more quietly, because fans can run slower, too. Intel is well aware of the problem and is working to add its similar SpeedStep technology to its Xeon and Itanium processors.

Earlier this year, AMD launched special low-heat Opteron variants, for which it is charging a premium, which attests to the market value of more efficient computing. A regular Opteron runs 2 GHz at 1.5 volts and dissipating 89 watts of heat. But AMD sorts through the bins to find chips that can deliver the same clock speed with lower voltage, and delivers a 1.3 volt, 55 watt variant (Opteron HE) and a 1.13 volt, 30 watt variant (Opteron EE), which both run at 2 GHz and deliver exactly the same performance. This is a big improvement in energy conservation, but it is static. PowerNow is dynamic and will allow all Opterons to scale themselves down as workloads change. The combination of an Opteron EE chip with PowerNow is going to be a very popular chip in dense computing clusters, if AMD can make them both work together.

Server Maker Bull Bailed Out by French Government Again

As French server maker Bull (which resells IBM's Power line of AIX and Linux servers, as well as its own Itanium-based Windows, Linux, and GCOS proprietary servers) was announcing that it had named Didier Lamouche as chairman of the board, the company also said that Bull has been able to get its third and final cash infusion from the French government as part of a bailout plan three years ago. Bull, which has had a tough time staying profitable in the intensely competitive server market, has been able to restructure its debt and get a cash infusion. If Bull can repay the 450 million euros it got as a loan back in November 2002, the French government will be allowed by the European Commission (which frowns on governments propping up indigenous companies so that they can compete in the broader market) to give Bull a new "restructuring aid" of 517 million euros. That's a net gain of 67 million euros, which is about $90 million at current exchange rates. Bull is expected to cut about 7,800 people from its payroll as part of the restructuring. This restructuring gives Lamouche, who used to run IBM's worldwide chip manufacturing operations, some breathing space as he takes over as Bull's chairman and CEO on February 1.

META Group: IT Salaries Will Be Up 10% to 15% Through 2007

Being a human resources manager or an IT manager is rarely an easy job. In bad economic times, you have to lay off people and deal with tight budgets, and in the good times you have to cope with fast-rising salaries and employee turnover. The analysts at IT consultancy META Group say that they expect IT salaries to increase by 10 to 15 percent in the next three years, and will represent approximately 55 percent of the typical IT budget by 2007.

META says the economy is going to pick up in the next year, and that IT shops will be hard-pressed to keep their best talent from seeking "greener pastures" where they can get better pay and new challenges. META suggests that now is the time to add performance-based compensation packages, as well as implement employee morale, recruitment, and retention programs (including key things like flex time and telecommuting options). Application developers, security specialists, and network administrators are the hardest IT employees to hold on to, according to META.