Things should be looking up for IBM in the enterprise server market, where the company’s System z and POWER7 systems play. The market has been in the doldrums throughout the recession, experiencing actual sales declines. But that appears about to change.
According to IDC’s latest worldwide server market report factory revenue in the worldwide server market increased 4.7% year over year to $10.4 billion in the first quarter of 2010 (1Q10). This is the first quarter of year-over-year revenue growth in seven quarters, as server market demand continued to improve around the world. Server unit shipments increased 23.3% year-over-year in 1Q10. It represents the fastest year-over-year quarterly server shipment growth in more than five years, IDC adds.
Driving that growth is the x86-based volume segment of the market, where a slew of vendors competes to sell low cost commodity servers. That’s not where the System z and high end POWER7 systems play. They play in the value segment, and IDC likes the future prospects there too.
As its report noted, IDC expects the recovery to extend to UNIX and mainframe platforms in the second half of 2010 as the technology refresh extends from volume- to value-oriented systems, which IDC characterizes as having longer planning horizons. The IDC researchers add: “It’s also important to note that we are in the middle of one of the sharpest periods of market inflection in a decade, and we expect significant shifts in technology usage and market shares to occur as the recovery continues.”
IBM has been saying for a year that a new System z is coming before the end of 2010. This is part of the technology refresh IDC is talking about. In April IBM refreshed its POWER Systems with set of servers based on the new multi-core POWER7 processor. At that time IBM claimed POWER7 delivers 4.5x to 7.5x performance per core vs. Sun SPARC and HP Itanium systems across major benchmarks, such as TPC-C.
The new System z will represent IBM’s second major enterprise server refresh this year. IBM has been describing it as a hybrid z, implying that it will operate across IBM POWER Systems and x86 blade systems as well as z/OS. Maureen O’Gara, writing in Client Server News in early July, offered more details about the upcoming machine. My sources tell me she’s not too far off. The day IBM announces the new machine, you’ll find my initial take on it here at DancingDinosaur. Stay tuned.
Regardless of the exact details of the new mainframe, IDC certainly got it right about one thing: the enterprise server market if not the entire IT industry “finds itself in the middle of one of the sharpest periods of market inflection in a decade, and we expect significant shifts in technology usage.”
The shift in technology usage clearly revolves around the rapid virtualization of IT, the growth of cloud computing, and private clouds for large enterprises. In these areas, the mainframe has built in advantages, and a new mainframe, especially a hybrid mainframe, will only enhance those advantages.
For example, a System z10 can consolidate hundreds of Linux instances and thousands of virtual desktops. Mainframe data center managers scoff at the notion of private clouds as something new. They argue that a modern mainframe data center set up to handle web services and SOA already, in effect, is a private cloud.
So, if the technology future is virtualized systems end-to-end and clouds, private or public, IBM, with its new POWER7 systems and whatever the new mainframe turns out to be exactly, seems to have it covered.