But Wait, There's More

HP, Toshiba Partner for HP-UX Servers in Japan

Rumors were circulating at press time that Hewlett-Packard and Toshiba are partnering to push Unix servers in the Japanese market. But there's more to the deal than these initial accounts tell.

An HP source confirmed that Toshiba will indeed be reselling HP's Unix servers. The source was unsure if the deal includes PA-RISC servers but said that it definitely includes the Itanium-based Integrity servers running HP-UX. The source was also unsure if running Linux or Windows on these Integrity servers would be allowed (although there will be nothing technically to stop customers who buy joint HP-Toshiba Integrity servers from using these environments on their machines). According to the rumors, the deal does not include selling HP's ProLiant servers.

However, if you know that the deal was not inked with Toshiba, but rather with its Toshiba Solutions division, and find the announcement in Japanese on its site (no easy thing) and run it through a translation program, you'll discover that Toshiba Solutions, which sells servers and applications to big manufacturers, distributors, and retailers in Japan, has been an HP partner for OpenView system management software and has been selling ProLiant servers to customers since 2001. Moreover, you will see that Toshiba is not only going to be reselling both HP 9000 and Integrity servers but also that it has received the specifications for HP-UX that will enable it to better tune the software it sells for HP-UX servers. HP and Toshiba will also be jointly developing the resulting Unix boxes and plan to sell storage, software, and other system components together. Specifically, Toshiba and HP will port Toshiba's DNCWARE ClusterPerfect clustering software to HP-UX and will create drivers to connect Toshiba's ArrayFort disk arrays to HP-UX servers as well.

Toshiba is no newcomer to the Unix market. Back in 1995, Toshiba inked a deal to resell Solaris servers in Japan as well as to use Java technologies in its consumer products. In 1998, when Sun first tried to pump up Solaris on X86, Toshiba was one of the early and enthusiastic licensees and put it on its Magnia X86 servers (within a few years, support for Solaris was dropped). Toshiba has also resold Unix-based, fault-tolerant computers from Stratus Technologies throughout the 1990s, and is currently a member of the fault tolerant server consortium that Stratus recently established. According to statistics compiled by IDC, HP has a 35 percent market share in the Unix market in Japan, and both companies believe that the expanded HP-Toshiba partnership can push HP's share of that $2 billion market to 50 percent within a year or so. That's a pretty big leap.

Survey Sees Increase in Unix Spending

Perhaps there are some signs of life in the Unix market. Because Sun Microsystems can't just rely on what its own customers and sales force tell it about conditions out there in the market, the company commissioned Momentum Research Group to survey a representative group of U.S. companies in order to get a sense of what their spending plans were for the coming year.

One interesting spot in the survey of 301 IT managers was the expectation that RISC servers (as distinct from X86 servers) would see a boost in 2005. The managers surveyed said that 64-bit servers, meaning all of the RISC/Unix boxes, plus a smattering of Itanium machines, would account for 27 percent of the server budget in 2005, up from 22 percent this time last year. Executives polled said that 32-bit X86 servers would account for about 33 percent of the server budget in 2005, down from 40 percent in 2004, and hybrid 32-bit/64-bit machines (based on the Xeon-EMT64 and Opteron chips) would increase to 27 percent of the budget, up from 21 percent in 2004. Those polled by Momentum said that mainframes and other proprietary systems would account for 14 percent of the 2005 budget, down 4 points from spending levels in 2004. Sun is obviously pleased that spending related to RISC/Unix and 64-bit X86 servers is on the rise, because this vindicates the moves it has made in the past year. But other vendors will be chasing those slices of the server budget pie, too, so whether Sun can capitalize on the opportunity depends on how Sun executes.

If you average the responses across all 301 managers polled, the companies expect to spend about 29 percent of their 2005 hardware budget on expanding their data centers in 2005, 28 percent on upgrading their systems, and 23 percent on hardware service and support. The momentum data was skewed a bit toward financial and professional services and somewhat larger firms, so take this data with a grain of salt. The U.S. economy is dominated by small and midsized companies (particularly manufacturers and distributors), but 82 percent of those polled by Momentum had 1,000 or more employees, and 50 percent were in the services sector (including government organizations).

OfficeMax Sticks with Solaris Sparc Servers for SAP ERP

Sun Microsystems let out a sigh of relief last week because office products distributor OfficeMax has decided to stick with the Solaris platform as the core of its data center. OfficeMax sells office supplies and furniture and has a network of Sun Fire 25000 and 1280 servers, which have been upgraded to dual-core UltraSparc-IV processors and StorEdge 9960 disk arrays hosting the SAP installation that runs on this iron and runs its 950 stores and 50 distribution centers in the United States and also hosts its online store.

OfficeMax has worked with Sun in its iForce Competency Center for SAP Solutions to tweak its implementation of SAP to help it run more smoothly, and it plans to work with Sun to use grid and virtualization technologies, collectively called N1, to make its SAP implementation more flexible in the future.

SCM Software Maker Catalyst to Support AIX-WebSphere Combo

Supply chain management software maker Catalyst International said this week that it would be porting its CatalystCommand WMS to work on IBM's Power-based AIX servers. In addition to porting to AIX, the company will make its supply chain software (which is used by large companies such as Home Depot, OfficeMax, Panasonic, and Reebok) work on top of IBM's DB2 database and WebSphere middleware (including the WebSphere application server and the WebSphere-MQ message queuing software), Catalyst said.

PeopleSoft Relents, Agrees to Oracle Acquisition

After a bitter 18-month battle, PeopleSoft's board of directors agreed this week to sell the company to Oracle for $26.50 per share, or $10.3 billion. The merger agreement has been approved by the boards of directors of both companies and should close by early January. As part of the deal, the two companies will cease all legal actions against each other, including a Delaware court trial to determine the legality of PeopleSoft's anti-takeover poison pill, as well as a case that PeopleSoft was bringing against Oracle for allegedly damaging its business. It's still not clear what will become of PeopleSoft's employees and customers. As part of the deal, Oracle will obtain 12,750 PeopleSoft customers, about half of which PeopleSoft obtained in its acquisition of J.D. Edwards in the summer of 2003. At one point, Oracle had plans to fire about half of PeopleSoft's roughly 12,000 employees, but it has since softened that stance, according to reports.

George "Skip" Battle, chairman of PeopleSoft's transaction committee, said the company believes Oracle's revised offer of $26.50 provides good value for PeopleSoft stockholders. "PeopleSoft is a strong and vibrant company," he says. "This has been a long, emotional struggle, and our employees have consistently performed well under the most challenging of circumstances." The agreed-upon price of $26.50 per share represents a 10 percent premium over PeopleSoft's closing price on Friday, and a 75 percent premium over PeopleSoft's market value before Oracle first launched the takeover battle, in 2003. Oracle, which also announced its quarterly financial results today, said the merger should add about 1 cent per share to its bottom line starting in the fourth quarter of its fiscal year, and 2 cents per quarter in fiscal 2006. For its third quarter ending November 30, the company earned $815 million, or 16 cents per share, a 32 percent increase from the same period last year.

LTO Roadmap Extended Two More Generations, but Transfer Speed Increases Scaled Back

The Linear Tape-Open (LTO) format is alive and well, as the LTO Program yesterday tacked two new generations onto the end of its LTO Ultrium roadmap. The roadmap calls for the doubling of tape capacity, and a near doubling of data transfer speeds, every generation. In the first three LTO generations, tape capacity and transfer speeds doubled every year, and the LTO-3 tape drives, which are just starting to come to market, offer 400 GB native capacity (800 GB at 2:1 compression) and 80-MB-per-second data transfer speeds (160 MB-per-second compressed). By the sixth generation, LTO will offer 3.2 TB of native capacity and 270 GB-per-second native data transfer speeds. The group says that compression rates will stay at 2:1. The LTO Program also scaled back its anticipated native data transfer speeds for the future of its LTO drives. Instead of an anticipated 160 GB-per-second native data transfer speed, the group said LTO-4 drives will instead offer a 120 GB-per-second native data transfer speed, which represents a 50 percent improvement, as opposed to the 100 percent improvement LTO has made in each generation up to LTO 3. The new LTO roadmap shows that top data transfer speeds will increase by 50 percent for each successive generation.

Gartner Says Utility Computing Will Cost IT Jobs

According to a new report from IT researcher Gartner, the advent of utility-style computing, with its automation of provisioning and systems management, will mean that heads will start to roll at external service providers as well as the internal IT organizations of corporations. This will not be welcome news to the system administrators and network operators who already work in stress-laden IT organizations that have been looking to reduce their IT administrative costs over the past four years.

The Gartner report, released this week in the United Kingdom, concludes that, over the next two to 10 years, data center employees will be increasingly replaced by the machines they love, bringing an ironic full circle to the automation that started with record-keeping and billing at the dawn of the Computer Age decades ago.

"The trend towards offshore services has monopolized attention in terms of job losses," said Gianluca Tramacere, an analyst in Gartner's IT services and sourcing group, in a statement accompanying the report. "There is less awareness that increasing reliance on highly automated infrastructures will significantly reduce the need for manual procedures and direct involvement of the workforce. IT automation can mean greater flexibility and cost efficiency for businesses. However, it makes it harder for IT personnel to defend their jobs as this evolution, accelerated by the global economy and the competitive marketplace, is seen as an inevitable consequence of IT progress."

The challenge for IT personnel, according to Gartner, will be for administrators and system managers to learn skills that are in demand, and that goes for those who work in the corporate data center as well as those in the giant services companies that run other companies' data centers. There is no escaping the automation of the computers. And Gartner's advice to IT personnel? Learn all you can about your company's business processes and become an expert in that. To a Unix or mainframe operator, this advice may seem somewhat bizarre, and the reality is that a company will not necessarily need as many business process experts as it needs system analysts and administrators. There will probably be a lot more people playing musical chairs in the data center than there are chairs to sit on.

The jobs issue is further complicated as companies start dreaming, thanks to the application service provider, utility, and subscription pricing models, which companies like IBM, Sun Microsystems, and Hewlett-Packard keep talking up. If companies rent rather than own their infrastructure, with the advanced networking and decent management tools available today it doesn't much matter where those machines are located or who babysits them. If you subscribe to your servers, which are a relatively small portion of your budget, why would you not subscribe to your system administrator, which is a big portion of your budget? Sharing people and spreading costs among many different companies is what we all do for installation and break-fix maintenance support today. This just takes it all one step further.

"ESPs, including IBM and HP, are investing heavily in new technologies that will allow the automated delivery of IT services," said Tramacere. "Examples of technologies that are emerging include 'self-healing' hardware, rapid development tools and software components, and tools that automatically manage systems and services. In the future, strengthened by the economies of scale, technical enhancements, and adaptable pricing, organizations will be able to access IT utility infrastructure services more competitively, with a reduced reliance on internal resources. Ultimately, organizations will be driven to access utility infrastructure services more frequently and to reduce the size of their internal IT operations."