Copyright 2006 by Rules |
Technology News
T3 Liberty
Platform Solutions firmware and software, HP Itanium hardware
So far, T3 hasn't gone public with its plans, but it has circulated a promotional flyer in which the IBM Business Partner describes itself as "the other mainframe company." Officially, neither T3 nor Platform Solutions seems to be talking about their relationship, which is just as well. T3 bills the machine as a PCM offering built on HP Itanium hardware, which is one way to look at things, while Platform Solutions says its position is that whatever it makes using its code is a PSI machine, regardless of whose hardware is inside the box. A third interpretation may emerge if a deal between EDS and Fujitsu goes ahead. As we understand it, EDS wants to offer Platform Solutions' software and firmware running on Fujitsu Itanium servers as the equipment in its services deals.
To make matters more complicated, T3 seems to be saying it will not only offer the product in its American home market, but also in the EU from offices in the UK, Germany, and Italy. The machine is built to run on 200-240 volts and 50-60 Hz current, so it can work more or less anywhere.
For now, T3 is not talking about MIPS, but the photo it offers suggests a machine with modest power, a box that may overlap its Flex-ES line on the low end and small IBM mainframes on the high end. Our guess is that the four-way Itanium server pictured in the promotional material will yield something like 200 MIPS while running in mainframe mufti. Platform Solutions wants to sell small boxes as well as larger machines directly, providing servers that may range from under 100 MIPS to 2,000 MIPS and possibly higher.
But it all remains kind of iffy. PSI is still perfecting its 64-bit mainframe functionality and has only put boxes that provide 31-bit addressing into field tests. IBM is saying nothing about whether it will let PSI users license its software under general commercial terms, as it did in the case of other plug-compatible vendors. And, with the exception of L. L. Bean, none of the end users who have been testing PSI systems wants to talk about the machine or the deals with IBM under which software has been licensed.
LIKE KATRINA: THE GROUND FLOOR SINKS OUT OF SIGHT
On September 27, IBM said it was going to stop selling software under what it calls the ESL (Entry Systems Licence) plan at the turn of the year. ESL is a scheme under which users can pay one-time charges for a long list of IBM systems software and middleware if their platform runs at no more than 8 MIPS. It is only offered on a handful of platforms, including the 3006 Integrated Server and low end emulated mainframes running Flex-ES.
An 8 MIPS mainframe may sound puny, but for dozens of users who still have small 2003 systems, and for users with larber mainframes who are trying to downsize, an 8 MIPS box is a valid platform. During the IBM 370 era, the largest machine IBM made, a model 168, ran at less than a third this speed, and it did a lot of bookkeeping. None of the 303X line ran this fast, either. IBM didn't get past 8 MIPS until it built the 308X line.
When ESL is gone, the cheapest software deal IBM offers will be the special GOLC pricing that is associated with emulated mainframes. The least powerful machine for which IBM offers this deal, which prices software at around a third the rate charged for a 60 MIPS Multiprise 3000, runs at roughly 20 MIPS using Flex-ES emulation code on an Intel-based server. Even that option might not last long for new users. IBM's decision on ESL could be the first of a number of annual reviews that eliminate software deals aimed at the slowest (and oldest) mainframes still in use.
Because IBM's smallest mainframe users can still get ELS deals until January 1, and there might be a small flurry of migrations as users with 8 MIPS workloads try to locate suitable equipment while the getting is good.
Because IBM's smallest mainframe users can still get ELS deals until January 1, and there might be a small flurry of migrations as users with 8 MIPS workloads try to locate suitable equipment while the getting is good.
COMMON MEMORY AT $25 TO $30 PER GIGABYTE
Memory stick prices are very attractive, making it easy to equip PCs and servers with ample capacity to support the latest softoware. The popular 533 MHz DDR2 modules seem to be retailing for $25 to $30 per gigabyte. Dual channel technology is priced at the high end of this range, while single channel sticks are somewhat cheaper. Modules rated at higher speeds, such as 800 MHz, cost a few bucks more. Laptop memory is considerably more expensive, with SO DIMM sticks running $60 to $70 per gigabyte.
Our bellwether memory dealer, McDonald and Associates, in Omaha, has been selling parts at these levels in small quantities and appears to be willing to talk about price to customers who are looking for sticks by the dozen.
The more sophisticated types of error correcting memory used in midrange servers can cost more than standard PC memory but still can be a lot cheaper on the open market than when it is purchased from a server vendor. Customers usually don't shop the third-party market for memory when a server is very new but instead look for bargains when they are trying to stretch the life of an older server by another year or two. More often than not, a little bit of shopping can yield a lot of savings.
IBM DELIVERS 20 PERCENT PROFIT JUMP ON 5 PERCENT REVENUE RISE
IBM reported another impressive quarter against a background of worldwide economic turmoil and great uncertainty about the state of the information technology industry. Big Blue said its net profit was $2.8 billion, a 20 percent increase, on revenue of $25.3 billion, an increase of 5 percent compared to last year's third quarter. Earnings per share hit $2.05, up 22 percent, as the company persisted with its stock buyback program.
IBM attributed its success to services and software. In hardware, it's bright spot was at the high end, where z mainframes and big Power boxes did well. Storage and financing were sluggish.
Revenue from z10 mainframe line jumped 25 percent from last year's results, in part because IBM was able to reduce average prices per unit of processing power quite considerably by flogging less costly specialty engines and, most probably, by cutting the cost per MIPS of general purpose engines at key accounts. The result was a 49 percent gain in MIPS shipments compared to last year's third quarter. Power boxes, now called "converged System p" to reflect the movement of former i products to the p hardware platform, were up 9 percent. Legacy i sales pretty much died off, falling 82 percent, while X86 server sales slid 18 percent.
Sales of other hardware was a problem for IBM. Storage was off 3 percent, essentially going nowhere compared to last year. But point-of-sales revenue nosedived 24 percent and IBM's once-vaunted custom chip fabrication business tanked with revenue falling 27 percent. All told, systems and technology revenue was off 10 percent.
Software revenue, up nearly 15 percent, was a bright spot, and so were its two services groups, both up more than 12 percent in revenue.
IBM said it was not ready to alter forecasts made earlier in the year despite economic problems that have shaken stock markets and governments the world over, and which threaten to bring a recession to main street around the globe.
Despite its presentation of powerful favorable evidence, IBM did not get an immediate verdict of innocence from an investing public that is quite fearful and deeply skeptical. If the stock market's recent lows turn out to be a bottom, then investors may have missed a chance to buy Big Blue shares at a bargain price. But if the pattern in equity prices resembles that of the early 1930s, which some gloomy analysts suggest could be the case, IBM shares, cheap today, could well be cheaper tomorrow.
IBM THIRD QUARTER 2008 PERFORMANCE BY SEGMENT
REVENUE
CATEGORY
EXTERNAL
REVENUE
INTERNAL
REVENUE
TOTAL
REVENUE
PRE-TAX
INCOME
PRE-TAX
MARGIN
Systems & Technology
4,431
223
4,654
283
6.1
Percent change
-9.5
-5.6
-9.4
-21.7
Global Technology Services
9,864
384
10,248
1,189
11.6
Percent change
8.5
-5.8
7.9
15.6
Global Business Services
4,900
259
5,160
724
14.0
Percent change
6.8
-6.0
6.1
38.9
Software
5,249
655
5,904
1,527
25.9
Percent change
11.8
14.8
12.1
19.0
Global Financing
633
456
1,090
349
32.0
Percent change
1.7
31.3
12.3
3.2
Total for All Segments
25,077
1,978
27,055
4,072
15.1
Percent change
5.0
7.6
5.1
15.3
Eliminations/other
224
-1,978
-1,753
-177
Total
25,302
0
25,302
3,895
15.4
Percent change
4.9
4.9
18.7
The Eliminations/other line reflects an adjustment for activities that involve sales among IBM divisions that later yield sales to customers.
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