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Solaris 10 Shipments Take Off Like a Rocket

Sun Microsystems's president and chief operating officer, Jonathan Schwartz, is projecting that the company will surpass 1 million downloads of the production version of the new Solaris 10 operating system sometime in the third week of March.

Sun is getting ready to roll out an open source version of Solaris 10 called OpenSolaris, and is in the meantime giving away a production-quality, binary set of Solaris 10 for machines with fewer than four processors. (The company has been vague about what it charges for Solaris 10 binaries on larger machines.)

Schwartz said, in a blog he posted a few weeks ago, that Solaris 10 would go "platinum" (to borrow terminology from the record industry), and he also gave a interesting breakdown of downloads by platform type. On February 19, Solaris 10 users had downloaded 191,107 copies of Solaris 10 for Sparc-based machines and 348,155 copies for X86 iron. A total of 539,262 downloads were recorded as of February 19, and Schwartz says this download rate was blowing away Sun's estimates and straining its download site and the mirrors it has set up. Just eight days earlier, users had downloaded 420,895 copies of the commercial Solaris 10 software from Sun and its mirror sites. So Solaris 10 went "gold" sometime around February 16. The current Solaris download rate works out to just under 15,000 downloads a day, with about one-third for Sparc iron and two-thirds for X86 iron. Solaris 10 should go "double platinum" around the end of May. It is hard to guess when Solaris downloads will go "diamond," which means 10 million downloads, but that could happen by the end of 2006 if the current rate holds.

While a lot of these downloads are for tire-kicking, customers can put the downloaded software into production for free; tech support is not free, but it is relatively inexpensive--from $120 to $360 per processor per year, depending on the level of support customers want. The downloads do not measure the size of the Solaris 10 installed base, of course, which is very hard to guess. The number of machines in production using Solaris 10 will reach an unknown steady state even as downloads continue, and that installed Solaris 10 base could eventually be in the hundreds of thousands or possibly up to a few million. The Linux server market, for all of its noise, consists of about 2 million actual servers in production, according to estimates made by Novell.

IBM Chops pSeries 670 and 690 Prices

IBM has some old pSeries 670 and pSeries 690 iron in the barn, and it is slashing prices on components for these servers to move it through its channel and into customers' data centers.

IBM has announced two promotions for these servers. The first gives customers who buy upgrades for their pSeries 690 servers (that is the 32-way "Regatta-H" box) from the 1.3 GHz Power4 or 1.7 GHz Power4+ processors to the faster 1.9 GHz Power4+ Turbo processors a 65 percent discount. The deal applies specifically to feature 5241, an eight-core Power4+ complex that has a list price of $800,000 and feature 7431, which is an eight-core module with only four cores activated that costs $228,000. This promotion expires June 22.

In addition to the discounts on those top-end Power4+ chips for the pSeries 690, IBM is also offering a 65 percent discount on activations of Power4, Power4+, and Power4+ Turbo processors in existing pSeries 670 (16-way) and pSeries 690 machines. Customers have to activate cores in increments of four, and they also have to activate 8 GB or 16 GB of main memory on those systems at the same time. This is a lot of dough, but IBM is giving what is probably the most generous discounts in its history on these features. This deal expires on June 24.

SCO Restates Financials from 2004

Facing the prospect of a delisting from the NASDAQ National Market stock exchange, Unix software vendor The SCO Group has explained why it has delayed the posting of its financial results for fiscal 2004 ended last October, which is what got it in hot water with NASDAQ in the first place.

As we previously reported, SCO has appealed to the NASDAQ for an extension that will allow its shares to remain on the exchange. In a statement February 17, SCO said it was taking time to go over its stock compensation plans that were put in place in 2000 before making its final 10-K filing for the year. On March 3, SCO said it would get a March 17 hearing with NASDAQ , and it would explain that SCO and its auditors, KPMG, discovered that some tricky elements of its finances were booked incorrectly in past quarters. To begin with, in the first, second, and third fiscal quarters of 2004, SCO says it booked stock compensation of $272,000, $231,000, and $557,000 without registering those sales properly with state and federal authorities; this stock compensation will have to be reclassified and its books rejiggered so it can rebook the stock sale properly. Another $233,000 of stock compensation that was recorded in the second quarter was actually incurred in the first quarter. And finally, some accrued dividends worth just under $2.5 million that were related to its buyout of investor Baystar Capital have to be reclassified; these dividends were never paid and in some convoluted way that only accountants can understand are recorded as equity.

Centercode Brings Microsoft's Windows ASP to Java's ASP and Unix

Centercode, a provider of management software for controlling the beta testing of applications, has announced it is porting its Connect Web-based management tools to the Solaris 10 platform. The joint effort will also see the Connect server, which can manage applications written to Microsoft's Active Server Pages (ASP) format to be deployed within Sun's Java Server System middleware stack on Solaris, HP-UX, Linux, and Windows. (The HP-UX and Windows support for JES is coming soon.) This ASP facility is offered through the Java System Web Server's own ASP tools, and Centercode's Connect software will make use of it to help organizations beta test their programs on a variety of platforms.

Disk Array Sales Taper Off in Q4 2004

For the first time in a long time, sales of internal disk arrays embedded inside servers has buoyed the overall market for disk arrays, say the analysts at IDC. While disk capacity purchases are growing at a very fast clip, the price/performance pressure among makers of disk arrays is intense, and it is quite remarkable that there is any revenue growth at all. In the fourth quarter, worldwide disk array sales were up 1.8 percent to $5.8 billion, but sales of external disk arrays only grew by a scant 1 percent to reach $3.8 billion. The only reason that there was any growth at all is because a significant boost in server sales with embedded disk arrays helped push sales. Even still, embedded array sales were not spectacular, with sales of just under $2 billion, up 4 percent compared to this time last year. The disk array market remains one of the toughest markets in IT, and IDC said that sales in the final quarter of 2004 were weaker than expected.

For the full year, the aggregate disk array market was up 3.2 percent to $20.9 billion. Hewlett-Packard had the top spot in revenue rankings, with $4.9 billion in sales, even though its sales slipped by 5.6 percent. (HP's entry and midrange disk array business has been problematic since the Compaq merger, and its products were looking a little long in the tooth until they were refreshed in mid-year.) IBM, which has been pumping out various storage subsystems based on its Power5 family of servers throughout the second half of 2004, was able to boost its sales by 1.3 percent to $4.3 billion. However, in the external disk array market, where these Power5 products are sold, IBM's sales in 2004 declined by 4.3 percent--almost as bad as HP's own 6.3 percent decline in external array sales. IBM has its own issues, so don't think it is just HP. EMC and Dell partnered a year and a half ago to sell entry and midrange disk arrays, and that partnership has worked well--for now, at least. EMC boosted its revenue by 18.4 percent in the worldwide disk array market to just under $3 billion, and Dell saw 17.3 percent growth to hit just over $1.5 billion in 2004. Hitachi, which has Sun Microsystems and HP as its resellers for high-end arrays, was the number five disk array storage vendor in 2004, with $1.3 billion in sales and a fraction of a percent of growth. Sun slipped behind Hitachi after seeing a 4.7 percent decline in sales in 2004; it sold some $1.2 billion in disk arrays last year.

The network-attached storage (NAS) market (which includes Ethernet-based as well as iSCSI-based external arrays) accounted for $2.4 billion in sales in the fourth quarter of 2004, growing 11.6 percent. This is a hotly contested market, with EMC, HP, IBM, and Network Appliance, the creator of the NAS idea, fighting for market share.

IBM to Pump $300 Million Into SMB Services, Consulting for Partners

Last week at its annual PartnerWorld event, IBM said that it would be investing $300 million to help its business partner channel sell services and consulting to small and medium business (SMB) customers.

"Analysts are saying SMB services are one of the hottest growth areas in the industry, and at the same time it is a highly competitive and localized marketplace," said Jim Corgel, general manager of small and mid-sized business at IBM's Global Services unit in announcing the partner investment. "IBM is making a significant investment to expand its SMB technology and consulting services focus and collaborate with Business Partners around the world to create solutions that help SMBs improve their business performance." He said that IDC reckons that SMB customers will spend $360 billion on information technology in 2005.

To assist the largely regional system integrators who serve the SMB market, IBM is creating dedicated teams for each region to help partners figure out how to sell more services to SMB customers. Partners will also be allowed to resell various Express Managed Services created by IBM, which cover application management, business transformation outsourcing and other exotic services that small businesses do not typically think they can afford. IBM has been testing this concept with some partners in the United States and Europe and has found enough success to roll it out as a product that all partners can participate in selling. Partners will also be allowed to sell IBM's hosting and strategic outsourcing services.