The Big Iron Customers That The Power E1080 Is Aimed At
September 27, 2021 Timothy Prickett Morgan
One of the central tenets of our philosophy here at The Four Hundred is: Anything that makes Power Systems stronger helps IBM i last longer.
For as long as we have been watching the AS/400 and IBM i market, big iron has driven a lot of revenue for machines based on IBM’s proprietary CISC processors and then PowerPC and Power RISC processors. And the big iron machines drove even more of the profits from these products. Big iron is, therefore, important. But just how much money are we talking about?
A lot more than you probably think, as it turns out.
As part of its presentations to resellers and business partners who will, in theory, be selling and supporting the “Denali” Power E1080 server announced a few weeks ago, IBM talked about the market for fat NUMA servers and how it is expected to grow in the coming years. Take a look:
Due in part to the IBM Power9 and System z15 servers being at the tail end of their upgrade cycle and to the Superdome Flex machines from Hewlett Packard Enterprise also being at the end of their “Cascade Lake” and “Cooper Lake” upgrade cycles, it is not much of a surprise that sales of machines with four or more sockets is expected to decline this year, to what looks like around $14 billion. That is against an overall server market including one-socket and two-socket machines, which by far dominate the server shipments in any year, that should account by around $84 billion. So that means big NUMA machines with four or more sockets will account for about 17 percent of revenues even though they will be a miniscule portion of the 12 million machines sold worldwide. For all of the talk about distributed computing architectures based on scale-out architectures using commodity servers, there is still plenty of value in big NUMA iron, and these sales levels reflect this.
There are many more big iron AIX machines, and a growing base of Linux on Power machines, compared to big iron IBM i machines. As far as we know, there are hundreds of IBM i customers in the world that employ multi-chassis systems based on Power7 and higher processors and many thousands that run AIX, and a smattering of Linux that is driven by big SAP software stacks using the HANA in-memory database. IBM told business partners that it has over 10,000 customers in total using Power Systems iron with four sockets or more based on Power7, Power7+, and Power8 iron, who are the big targets for the 16-socket Power E1080 and the follow-on four-socket Power E1050 coming in the second quarter of 2022. If you add in four-socket or larger Power9 customers, we think the pool is more like 14,000 customers. Again, the majority of these are big AIX shops running ERP stacks, some based on regular relational databases from Oracle and IBM, some running SAP HANA.
This NUMA market has really come down to HPE, with machines based on Intel chipsets up to eight sockets and based on Silicon Graphics NUMAlink chipsets for machines with 16, 32, and potentially 64 sockets. It is hard to say how much share IBM has, but what we can tell you is that IBM wants to use the Power E1080 to help it gain 50 percent share of the high-end server market (machines that have a base price of $250,000 or higher) and 10 percent of the midrange market (where machines cost $25,000 to $250,00). There will be some midrange Power E1080 configurations, but the Power E1050 will drive that midrange attack.
The question we have is why IBM is not being more aggressive in the four-socket space, where most of the revenues are and which represents a gateway to larger machines. Hopefully, by the time the Power E1050 comes to market, IBM will get more aggressive – and will allow IBM i to run on it as well, unlike the Power8-based Power E850 and the Power9-based Power E950. The IBM i platform was not allowed on these machines, to our chagrin.