Server Wars: zEnterprise vs. Oracle and HP

In the server market, especially the enterprise server market, IBM’s only serious rivals are HP and Oracle, and the latest Gartner tally shows IBM with z and Power clearly pulling ahead. According to Gartner, IBM was the 2011 market leader in the worldwide server market based on revenue, ending the year with $4.7 billion in revenue in the last quarter of 2011 for a total share of 33.7%.

Among enterprise-class RISC servers the results were problematic, except for IBM. Noted Gartner: Overall, RISC and Itanium UNIX revenue decreased 3.9% in the fourth quarter of 2011, although this top-level figure does not tell the whole story. HP had weak results in this segment, but IBM is benefiting from the difficulties of other vendors and consolidating its lead. IBM grew RISC/Itanium UNIX revenue by 21.4% and ended the fourth quarter with a 48.4% share of revenue in this segment.

The bad decisions HP has made, especially announcements to kill WebOS and its tablet devices and its decision to get out of the PC business, have finally hit home.  The company’s 1Q2012 financials were dismal.  Revenue was down 7% while earning per share dropped 32%.

Compared to the HP results, IBM had a good quarter, announcing fourth-quarter 2011 diluted earnings of $4.62 per share, compared with diluted earnings of $4.18 per share in the fourth quarter of 2010, an increase of 11%. Fourth-quarter net income was $5.5 billion compared with $5.3 billion in the fourth quarter of 2010, an increase of 4%. Operating (non-GAAP) net income was $5.6 billion compared with $5.4 billion in the fourth quarter of 2010, an increase of 5%.

All this despite a weak quarter for IBM’s hardware group, which reported revenues of $5.8 billion for the quarter, down 8% from the year before. The group’s pre-tax income was $790 million, a decrease of 33% due mainly to unexpectedly weak mainframe sales following a streak of record setting mainframe quarterly gains. Gartner attributes this “largely due to cyclical weakness in its System z product line.” If that’s the case, Gartner must be expecting a new rev of the zEnterprise in 18 months. Let’s hope.

Based on anecdotal evidence from discussions with data center managers, DancingDinosaur is expecting System z sales to pick up before that. Some managers have reported delaying upgrades of their existing z until the economy more clearly rebounds. Others have been sniffing around the zBX, curious to kick the tires of hybrid computing. All they need is a good business case and maybe an incentive. DancingDinosaur would like to see a discounted zBX offer with a little more punch than a couple of free blades, maybe bundled into a Solution Edition package.

In the meantime, IBM continues to compete with HP and Oracle/Sun for high end server sales. That puts the z196 against Oracle’s SPARC SuperCluster T4-4. Oracle describes it as the world’s fastest general purpose engineered system that delivers high performance, availability, scalability and security across a wide range of enterprise applications, including database, middleware, and Oracle and custom applications. The SuperCluster T4-4, according to Oracle, provides a completely optimized package of servers, storage and software that integrates with Oracle Exadata Storage Servers and Oracle Exalogic Elastic Cloud while utilizing the Oracle ZFS Storage Appliance, InfiniBand I/O fabric, and Oracle Solaris 11. Sound nice except IBM has been optimizing the System z for multiple workloads for years.

HP offers the Integrity Superdome 2. It is built around a modular, blade design, a fault-tolerant Crossbar fabric, and 64-socket scalability that handles 256 cores (more in a future release.) It promises a low entry price (unspecified—so unable to compare with the $75k z114), but its processors run significantly slower than zEnterprise processors.

Actually, it looks like HP is betting its server future on a new line, the HP ProLiant Generation 8 (Gen8). These servers represent an effort to redefine data center economics by automating every aspect of the server life cycle and spawned a new systems architecture, the HP ProActive Insight architecture, which will span the entire HP Converged Infrastructure. The servers will include integrated lifecycle automation that HP estimates can save 30 days of admin time each year per admin; dynamic workload acceleration, which can boost performance 7x; and automated energy optimization, which HP promises will nearly double compute-per-watt capacity, thereby saving an estimated $7 million in energy costs in a typical data center over three years This clearly is where HP expects to compete—against commodity x86-based machines.

DancingDinosaur sees this kind of competition as only good for enterprises that depend on IT.

Tags: , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: