Intel’s AppUp Is A Cloudy Clone of IBM’s Smart Cube

June 6, 2011 Timothy Prickett Morgan

Just before The Four Hundred went on hiatus for the Memorial Day weekend, I took a briefing with the folks at Intel‘s Data Center Group about a new product/service called the AppUp Small Business Service on Hybrid Cloud that will probably give you that sense of déjà vu as I had.

It borrows many of the concepts from the original AS/400 launch a zillion years ago and, more recently, from the Smart Cube appliances that IBM has stopped talking about.

The genius of the AS/400–there are many very smart ideas in the system–was that the box launched with thousands of applications, ready to go, and had both IBM and independent software vendors offering remote technical support for the boxes. This is the kind of hand-holding that small and medium businesses not only want, but actually need. IBM started talking about the “Blue Business” server appliances and application marketplace in early 2008, and debuted them in India–not the United States or Europe–as the Smart Cube appliances and Smart Market. In 2009, the Smart Cubes made their debut in the U.S. and then launched in Italy, which has a vibrant SMB base that still likes AS/400s, er, Power Systems servers running IBM i.

IBM has pretty much stopped talking about the Smart Cubes, but the idea was good (as were the Plug ‘n Go baby AS/400s when my hair was not so white). The idea was simple: Take a server and turn it into an appliance with a consistent framework that all ISVs used to install and support their applications. IBM and the ISVs built systems to remotely support the boxes, and then layered other services like backup and recovery on top of the boxes. It has many of the benefits of virtualized cloud computing, but the boxes running the apps are out at the SMB sites rather than back in some data center.

Bridget Karlin, who is general manager of the Intel Hybrid Cloud, says that there are something on the order of 22 million SMBs worldwide and they spend $61 billion a year on software. They want IT systems on their premises, not in the cloud, because they are paranoid about data security and losing access to their applications. But they want all of the benefits of pay-as-you-go software licensing and also having someone else manage the whole shebang as cloud vendors do. Here’s the quandary:

To try to bridge the gap between cloud providers and SMBs, Intel has created the Hybrid Cloud that brings together service providers who would run clouds, server makers who still want to sell boxes to SMBs, and ISVs who want to peddle their wares to broker access to applications, cloudy-style with pay per use prices. The idea is to enfranchise all the traditional layers of the IT sector–hardware, software, and services providers–and let them all get some skin in the SMB game.

One big problem for the ISVs who serve SMB customers is that they do not have the resources to set up a system for tracking and charging for software that is sold under subscription (monthly, quarterly, whatever) instead of a perpetual license with an annual support contract. Intel built the Hybrid Cloud, which runs in the data center, to remove this barrier and help ISVs get cloudy without having to actually move their applications to the cloud. The Hybrid Cloud software has server usage, monitoring, and resource management tools as well as a Web portal that lets SMBs browse and shop for software, which they can download onto the AppUp server appliance. The applications run locally on these servers and the data stays on these servers:

The setup also cleverly puts Intel at the center of the business transactions as the trusted broker between the parties, collecting money from service providers and distributing it to server and software application makers, as you can see:

“Everybody benefits under this model,” explains Karlin. And especially Intel, which doesn’t want people to buy servers based on chips from Advanced Micro Devices and which certainly doesn’t want SMBs to move to clouds and forego buying servers. If 22 million SMBs move to the cloud over the next couple of years, that would wipe out a very large portion of Intel’s low-end Xeon processor sales. Even if Intel was able to sell cloud makers fatter and more expensive CPUs, just the sheer fact that SMBs are generally using their machines inefficiently and a cloud is inherently more efficient because it interweaves workloads across companies would mean that in the aggregate, less computing capacity would be bought.

Intel is supplying a single-socket whitebox server using Xeon 3400 processors as the initial AppUp server appliance; Lenovo is also kicking out a rebadged IBM System x machine called a ThinkServer 200v. There will eventually be two-socket variants of the appliances, presumably using future “Sandy Bridge” Xeon E5 processors that come out later this year, but maybe not, maybe they will use the current Xeon 5600s. (After all, the first appliances are not based on the new Sandy Bridge Xeon E3-1200 processors, which are shipping and which have advantages over the Xeon 3400s.) Intel says that Acer and NEC have signed up to build AppUp appliances. No word on what IBM, Hewlett-Packard, Dell, or Fujitsu plan to do.

The server makers are offering their machines with a three-year lease, which will be administered through the AppUp service providers front-ending the service. So SMBs have to make a pretty long-term commitment to the box they buy, much as we do a smartphone or a tablet computer with a specific data service.

The applications themselves are packaged up in virtual machine containers, with the initial apps riding on top of the XenServer hypervisor from Citrix Systems. Sources at Intel tell me that the plan is to be hypervisor agnostic, and that means you can expect Red Hat‘s KVM soon since it is open source and, like Xen, allows Intel to modify kernel mode drivers for the Hybrid Cloud manager to hook in. Microsoft‘s Hyper-V and VMware‘s ESXi hypervisor will come as these two behemoths see the AppUp service take off and open up their APIs to let the Hybrid Cloud do what it does.

If IBM has dropped the Smart Cube appliance, maybe we can talk Intel into letting the Hybrid Cloud manage Power Systems-IBM i servers and put RPG-based applications into its catalog?

Yeah. Probably not. But it was a thought.

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