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  • What 2007 and Beyond Might Have in Store for the System i

    December 18, 2006 Timothy Prickett Morgan

    Human beings are forward-looking animals, which is probably why we have our eyes in the front of our heads. (Well, actually, we have our eyes in the front of our heads so we can see in 3-D, and the effect is that we are turned into forward-looking creatures.) In any event, as the year winds down and we all approach the holiday season, it is a natural time to extend our view to a more panoramic vista. And so, with this special edition of our flagship AS/400, iSeries, and System i5 newsletter, that is what we intend to do.

    Before getting into the i5/OS platform specifics, though, it is probably a good idea to take a look at what some experts have to say about the IT ecosystem in general and what its prospects are for the year. As we reported in last week’s edition of The Four Hundred, the analysts at Forrester Research are predicting that IT spending will grow in 2007, but that spending growth will slow compared to that of 2006. Specifically, Forrester is expecting a slowdown in IT spending in both geographies in 2007, with the European market cooling a little to $586 billion in sales, up 3.7 percent, compared to $742 billion in the United States, up only 2.9 percent. That compares to a 5.8 percent increase in 2006 in the United States and a 5.1 percent increase in Europe.

    If you want a second opinion, the prognosis will be much the same over at Gartner, at least among large enterprises in the United States. Gartner released a statement late last week that said the company’s analysts have found after checks that big companies are expecting to only increasing their IT spending in 2007 by 2.8 percent. Only six months ago, these same executives were forecasting that their 2007 spending would rise by 6 percent. What gives?

    “A number of factors have combined to force enterprises to lower their IT spending forecasts from the first half of 2006,” explained Jed Rubin, director of Gartner Consulting. “Looking back at the distribution of spending in 2006, enterprises spent more to support core business operations. This includes spending to support increasingly complex infrastructure and applications requirements, rising energy costs, regulatory requirements and other non-discretionary spending to keep the business running. This increased ‘run the business’ spending has consumed budget resources that were originally earmarked for more strategic and transformational investment. IT leaders are now planning to optimize their spending in these areas in the year to come.”

    These same companies expect to lower their basic infrastructure budgets–the ones that simply run the business, not transform it or add new applications–by 5 percent in 2007. The data was based on 807 companies that commit more than $1 billion in IT budgets; specifically, the budgets at those companies added up to $130 billion in spending, which is a big chunk of the IT spending in the United States. (The top 1,000 companies in the States probably account for a quarter of total IT spending, if you can believe it.)

    Not to be outdone in the stylish buzzword department, the analysts at IDC put out their prognostication statement for 2007, and were predicting something called “hyperdisruption,” which is what happens with my kids at my house on Sunday morning if I am trying to get a moment’s peace reading the newspaper.

    IDC is, however, predicting that overall worldwide IT spending will grow by 6.6 percent in 2007, which is a lot more than either Forrester or Gartner are saying it will. I like the way that number sounds better, but it is really anybody’s guess as to what will really happen. As for the hyperdisruption idea, IDC says that IT vendors are adopting new business models and selling new technologies, and that means we are in for a lot of changes.

    “While overall IT market growth will appear almost boringly moderate, its impact will be the opposite,” says Frank Gens, senior vice president of research at IDC. “As IT market leaders step up their relentless hunt for growth, we’ll see many disruptive shifts, with the importance of small business becoming very big, secondary economies becoming primary, software offerings becoming services, services offerings becoming software, channel-oriented players going more direct, direct players developing radically new channel strategies, and less distinction between business and consumer players and technologies.”

    IDC is also predicting that more vendors will try to move down into the small and medium business space, and that services and software will start to fuse in the Software as a Service business model, or SaaS. (Next year, we are probably just going to start saying SaaS and stop spelling it out; ditto for SOA, or service oriented architecture.) IDC is also predicting something that VMware has been aching for: the establishment of virtualization hypervisors as a standard way to deploy servers, and a virtual machine as a means of deploying application software that is pre-packaged, pre-installed, and pre-tuned.

    Now, for the System i Platform

    Making these predictions above is really not so hard. You do some surveys, you look at past predictions and how they correlate, and you look at macroeconomic factors that might affect each country and industry and microeconomic factors that will affect specific industries and companies. To be sure, such modeling is complex, and I am glad that I don’t have to do it.

    Calling the future of the System i5 platform is not so easy, but I have some things that I think might happen in 2007 or beyond. I am not sure when some of these things might happen, and I admit that they are mere hunches. But I trust my hunches. Especially if all of you can bug IBM to make them true–at least the good ones. Here goes:

    • User-capped System i5 pricing across the entire product line; no holds barred, no governors on any workload; compete, compete, compete. I have been over this at length in the past two weeks, and I have shown how this business model can bring the entire AS/400, iSeries, and System i5 base back into doing business with IBM–making the i5/OS ecosystem stronger. Will IBM do this? Will the company just sit around and wait for Power6 servers and put out a valuable but same-old-strategy i5/OS V5R5 release out in 2007 or maybe even 2008? I sure hope not, for all of our sakes.
    • I have heard rumors about something called the System i5 515, which I cannot track down any further. I think it might have been the user-capped System i5 520 Solution Edition that IBM announced already in October. But, maybe IBM has a general-purpose user-capped machine in the works. Or a low-cost entry machine. While I would welcome such a box, I think this is not sufficient to reinvigorate the System i5 line. There are problems across the entire i5 line, not just at the low-end.
    • I don’t think this will happen in 2007 or 2008, and I don’t think it will happen with the Power6 chip. But I think that the convergence of the IBM Systems will continue a-pace and that IBM will eventually create a Power chip that plugs into an Opteron socket. Advanced Micro Devices would love this, obviously. There is some precedent for this already, since supercomputer maker Cray has just launched a version of its multithreaded supercomputer chip, the “ThreadStorm” MTA2 chip, that plugs into the same Opteron 940-pin sockets as the Rev E Opterons. That means the MTA2 chips plug into the exact same “Red Storm” XT4 supercomputers that Cray has already spent a lot of dough to create. Imagine, if you will, not worrying about what chip plugged into what socket, if Power could speak HyperTransport and customers could mix and match Power7 and Opteron Rev G processors in the same box? Now, you need not worry that Windows has not been ported to Power. What you do need to worry about is that you have a hypervisor that spans Power and X64 architectures. And, of course, the open source Xen hypervisor will be able to do that. I also expect that Sun will see the wisdom of putting the future Sparc chips into Opteron sockets and use HyperTransport interconnect. And if Intel gets its Common System Interconnect variant of HyperTransport to market–which was supposed to unify the Itanium and the Xeon architectures in 2007, but which has been delayed–then IBM may be able to support Power and Xeon chips in the same boards as well. That is a tough call. No matter what, having common motherboards means that Power-based servers can use higher-volume boards, and IBM is finally done with convergence–particularly, if mainframe processors plug into the same Opteron ports. This is not the “Project ECLipz” convergence of iSeries, pSeries, and zSeries that was rumored for years–it is an even better idea.
    • This last prediction is not one I am comfortable making. But, I think it will happen. Earlier this year, an IBM source told me that the company had begun making Power-based servers in China for the Asia/Pacific market. Two years ago, IBM outsourced manufacturing of all but the highest-end System x servers to Sanmina-SCI, and this year, even the high-end “Summit” and “Hurricane” boxes were outsourced to the company. I do not think it is long before IBM stops manufacturing its entry and midrange Power-based servers. This will be particularly true if IBM moves to a common socket architecture for the Systems Group. I don’t know what that means for the Rochester and Poughkeepsie labs where IBM designs and makes its servers. But I think that significant downsizing could be in the works in these facilities in the coming years. The pressure will be on Big Blue to cut costs to stay on the price/performance curve. And even the user-based pricing models I suggest will necessitate a high-volume, lower-cost manufacturing operation than IBM has. IBM exited the PC business because it could not be a volume manufacturer. This was stupid. It should have simply designed machines and let others do the making and shipping. Hopefully, IBM won’t be so foolish with its servers.

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    Tags: Tags: mtfh_rc, Volume 15, Number 50 -- December 18, 2006

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    Admin Alert: More Information on Fixed Storage and WRKSYSACT IBM’s System i Priorities for 2007

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TFH Volume: 15 Issue: 50

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    Table of Contents

    • In Memorium: Christian Scott Ward
    • Let’s Be Frank
    • What 2007 and Beyond Might Have in Store for the System i
    • As I See It: Predictions and Poetry
    • Mad Dog 21/21: Greetings Season
    • In Memorium: Christian Scott Ward
    • Let’s Be Frank
    • What 2007 and Beyond Might Have in Store for the System i
    • As I See It: Predictions and Poetry
    • Mad Dog 21/21: Greetings Season

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