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  • Mad Dog 21/21: The Fake, The Take, But In The End Jake

    December 3, 2018 Hesh Wiener

    IBM, at times, looks like a pair of fraternal twins. One is based on long-established activities with roots in two proprietary system architectures: mainframe and Power. This part of IBM also includes the large legacy services segments. The other twin embodies IBM’s hopes and dreams — it is what the company calls strategic imperatives — it includes most software, artificial intelligence technologies such as Watson, cloud computing, and more. This year, the strategic twin became as big as the legacy twin, and, with the Red Hat acquisition, it is expected to become permanently larger.

    Properly managed and effectively marketed, the two parts of IBM should help each other, making the sum stronger and larger than the simple addition of two groups of business activities. But there are cases in which the two parts of IBM compete. This competition can confuse interested parties, pitting one type of viable computing strategy against another by making claims that may weaken rather than strengthen IBM.

    For example, IBM sales personnel may on the one hand try to promote the acquisition or upgrading of servers while other IBM representatives might suggest a no-hardware cloud strategy to yield results. The conflict between the two alternatives might get the customer curious about additional alternatives such as hardware from another vendor or a cloud services solution provided by one of IBM’s rivals.

    Birth Of The Twins: Esau arrived first with Jacob holding onto his heel.

    This isn’t entirely new. IBM has always offered multiple choices to customers in the form of different system architectures, different services groups, different software solutions, and different financing plans. IBM often resellers the platforms of other companies, and it will always finance competitors’ equipment, too. But during IBM’s golden age, the outcome would almost always be a deal between the user and IBM, one that would be well supported once put in place and one that would bring Big Blue additional revenue. Today that might not be the case, particularly if the customer’s choice involves cloud services and other strategic initiative options that are not only offered by IBM but also proffered by one of the well-regarded cloud providers such as Amazon, Google, Microsoft, or Oracle. The result could be an increase in computing by users but not an increase in business with IBM and instead lead to the opening of a door though which a longstanding customer relationship might escape.

    Thus the conflict between computing alternatives offered by IBM can become a rivalry that pits one of the IBM twins against the other with some outcomes leading to a loss of account control by Big Blue. IBM’s managers must try to avoid this, or to keep control of every situation that arises as customers face a choice between the legacy IBM and the emerging one. IBM is finding this quite challenging. For most of the past several years, the conflict between old and new led to a decline in IBM’s revenue. However, during three of the last four quarters IBM’s intake returned to growth. Observers optimistic about IBM believe the company has begun to get a fresh grip on things, while skeptics say the upturn was simply the result of a very attractive mainframe product cycle that will soon ebb and might not be easy to repeat.

    Esau Sells Jacob His Birthright: The elder twin weakened or lost his right to claim Isaac’s position for a hot meal . . . but he may have thought his act meaningless.

    The nature of the cultural conflict between the two halves of IBM is not merely classical; it is absolutely biblical.

    In Genesis, the patriarch Isaac and his wife Rebecca produced fraternal twins, Esau and Jacob. Esau was born first; Jacob is said to have emerged holding Esau by the heel. The timing of the births made Esau Isaac’s primary heir. That traditional rule of inheritance was fine with of Isaac, who loved Esau, but Rebecca favored Jacob and wanted him to be the primary heir. As the twins grew up, their differences became more significant. Esau was an athletic redhead, a hunter and outdoorsman, hairy, muscular and fierce. Jacob, gentle in manner and appearance, was more of a homebody with a meditative character.

    In their youth the difference led to separate roles for each of the twins. Esau hunted, notably bringing back venison that Isaac loved. Jacob stuck more closely to the family property, cooking meals including, notably, pottage. One day when Esau returned form hunting quite famished and asked for some food, Jacob offered Esau a hot meal but only in exchange for his birthright. Esau, not taking Jacob very seriously, and additionally thinking tradition rather than any of his words would govern the birthright, accepted the offer and the meal.

    Isaac eventually came to feel his powers were fading as had his vision. Consequently, he decided the time was ripe for him to formally pass his position to his elder son Esau. He called for Esau to come and receive his blessing and with it his birthright. At the time, Esau was out hunting, hoping to bring back some fresh venison for Isaac. But Jacob was, as usual, around the house. Rebecca persuaded Jacob to pretend he was Esau and fool Isaac into giving him the special blessing. To fool Isaac, Esau covered his arms with goat skin, thus imitating the hairy appearance of Esau. Isaac was in part deceived, saying that the young man who came to him as Esau felt right but sounded more like Jacob. Nevertheless, Isaac blessed Jacob according to ritual, giving him the birthright.

    Isaac Blesses Jacob: The patriarch was a bit unsure just whom he was blessing with a birthright, but stuck to his action even when he learned of Jacob’s ruse.

    Later, when Esau came home, he found out what had happened and was angered. The result was a schism that would last for much of the brothers’ adult lives. Rebecca persuaded Jacob to leave Isaac’s household and go to her brother, Laban. There, Jacob met and fell in love with Rachel, Laban’s younger daughter. Laban agreed to the marriage of these cousins on condition Jacob worked in Laban’s estate for seven years. When Jacob fulfilled this obligation, a wedding was arranged. But when the ceremony was completed Jacob discovered the veiled bride he had married was not Rachel but her older sister Leah. In the end Jacob was allowed to take Rachel as his second wife in return for a promise of another seven years of servitude.

    Jacob And Rachel: Their love at first sight endured a lifetime of challenges.

    Eventually this arrangement proved uncomfortable for Jacob and his family, and they left. Jacob decided to return to his former home and try to reconcile his relationship with Esau. This was risky, because when Jacob first tricked Isaac, Esau vowed to hill him, but not do so as long as Isaac lived. Now, with Isaac gone, Jacob was at risk. Still, Jacob felt he could apologize and try to make up for his past behavior and in the end restore his brotherly relationship with Esau. One the way back to Canaan there was a time when Jacob was alone. He encountered a stranger. They ended up battling, wresting an entire night, at the end of which the stranger revealed himself as divine and imparted a new name. Henceforth, Jacob could go by the name Israel. By that time Jacob had a dozen sons by his wives (and more by two concubines). Each of these sons would seed an extended family, a whole tribe, and these people became known as the 12 tribes of Israel.

    While IBM right now seems to be experiencing a conflict between its twin missions, legacy operations on one hand and strategic imperatives on the other, in the fullness of time IBM’s leaders may be able to harmonize the twin halves of their empire and produce a better unified enterprise.

    IBM’s operating segments are huge. During the first nine months of 2018, IBM reported revenue from Systems, which includes servers, server operating systems, storage devices and some other legacy activities, had brought in nearly $6 billion. A robust fourth quarter could bring the year’s total to something like $9 billion. IBM’s Global Business Services is part of the legacy twin, at $12.7 billion for nine months, more than double the intake of systems. IBM’s legacy services also includes a large portion of the company’s other services segment, Technology Services and Cloud Platforms with total intake for nine months of $26 billion. IBM’s classifies the cloud part of this services segment as a strategic imperative. It is probably best to wait for year-end reports before deciding how much Cloud Services is legacy, how much strategic.

    It is likely that IBM will reclassify its collection of services activities to better account for the impact of Red Hat. The result could be a single legacy services segment and a distinct cloud services segment, but for now that is just an analyst’s speculation. IBM’s software and AI activities fall into the Cognitive Solutions segment, which reported more than $15 billion in revenue for the first nine months of 2018. The last reporting segment is Financing, a legacy operation that supports sales to IBM’s resellers and end users; its nine-month intake was a bit more than $2.4 billion.

    With reported revenue for nine months in the vicinity of $58 billion and a year that will likely bring in considerably more than $80 billion, IBM is big enough and robust enough to comprise a pair of fraternal twin companies. But, as each portion of the company achieves organic growth as well as growth through acquisition, each half of Big Blue would be healthier as part of a cooperative and to the extent possible coordinated team than as a body fighting its twin with energy that would be better used to defeat external competitors. Customers, employees and investors worried about the fate of the legacy portion of IBM as the strategic twin grown every more prominent might want to take comfort from the fate of Esau. He never got that birthright back, not even part of it, but prospered anyway, and sired children who fostered the Edomite nation. Thus, late in life when Esau wished to be magnanimous in relation to his ambitious brother Jacob, he could well afford to be the hardened brother with the softer heart.

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    Tags: Tags: Amazon, Google, IBM i, Mad Dog 21/21, Microsoft, Oracle, Red Hat

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    Do the Math When Looking at IBM i Hosting for Cost Savings

    COVID-19 has accelerated certain business trends that were already gaining strength prior to the start of the pandemic. E-commerce, telehealth, and video conferencing are some of the most obvious examples. One example that may not be as obvious to the general public but has a profound impact on business is the shift in strategy of IBM i infrastructure from traditional, on-premises environments to some form of remote configuration. These remote configurations and all of their variations are broadly referred to in the community as IBM i hosting.

    “Hosting” in this context can mean different things to different people, and in general, hosting refers to one of two scenarios. In the first scenario, hosting can refer to a client owned machine that is housed in a co-location facility (commonly called a co-lo for short) where the data center provides traditional system administrator services, relieving the client of administrative and operational responsibilities. In the second scenario, hosting can refer to an MSP owned machine in which partition resources are provided to the client in an on-demand capacity. This scenario allows the client to completely outsource all aspects of Power Systems hardware and the IBM i operating system and database.

    The scenario that is best for each business depends on a number of factors and is largely up for debate. In most cases, pursuing hosting purely as a cost saving strategy is a dead end. Furthermore, when you consider all of the costs associated with maintaining and IBM i environment, it is typically not a cost-effective option for the small to midsize market. The most cost-effective approach for these organizations is often a combination of a client owned and maintained system (either on-prem or in a co-lo) with cloud backup and disaster-recovery-as-a-service. Only in some cases of larger enterprise companies can a hosting strategy start to become a potentially cost-effective option.

    However, cost savings is just one part of the story. As IBM i expertise becomes scarce and IT resources run tight, the only option for some firms may be to pursue hosting in some capacity. Whatever the driving force for pursing hosting may be, the key point is that it is not just simply an option for running your workload in a different location. There are many details to consider and it is to the best interest of the client to work with an experienced MSP in weighing the benefits and drawbacks of each option. As COVID-19 rolls on, time will tell if IBM i hosting strategies will follow the other strong business trends of the pandemic.

    When we say do the math in the title above, it literally means that you need to do the math for your particular scenario. It is not about us doing the math for you, making a case for either staying on premises or for moving to the cloud. There is not one answer, but just different levels of cost to be reckoned which yield different answers. Most IBM i shops have fairly static workloads, at least measured against the larger mix of stuff on the public clouds of the world. How do you measure the value of controlling your own IT fate? That will only be fully recognized at the moment when it is sorely missed the most.

    CONTINUE READING ARTICLE

    Please visit ucgtechnologies.com/IBM-POWER9-systems for more information.

    800.211.8798 | info@ucgtechnologies.com

    Article featured in IT Jungle on April 5, 2021

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    Some Insight Into The IBM i On Power Systems Base Guru: Right-Size Your PHP

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TFH Volume: 28 Issue: 80

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Table of Contents

  • Goosing Big Iron Power Systems With Power9 Migrations
  • What Is The State Of Your IBM i Modernization?
  • Guru: Right-Size Your PHP
  • Mad Dog 21/21: The Fake, The Take, But In The End Jake
  • Some Insight Into The IBM i On Power Systems Base

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