I attended a briefing last week in London with Rod Adkins, SVP IBM Systems and Technology Group, and Robert LeBlanc, who runs IBM’s middleware business. The subject at hand was the new POWER7 chip.
If you’re not a hardcore IBM server customer you’ve possibly never heard of POWER. It runs IBM’s mainframes, Unix boxes and the i (otherwise known as the most successful midrange platform and channel play in IBM history- the warhorse i like to still call the AS/400)
If you’re a hardcore gamer though you likely use POWER every day: Big Blue provides the silicon for XBox 360, Playstation3 and Nintendo Gamecube.
The question for POWER though is whether IBM can drive volume success with the chip in the mainstream IT market, which means database workloads. To win IBM needs to beat Oracle, which currently dominates the market sweet spot for mid to high end online transaction processing (OLTP) and decision support systems (DSS), a position it massively buttressed by expanding its application portfolio with numerous acquisitions. IBM DB2 has failed to take share from Oracle in the midrange Linux and Unix markets. That is IBM’s problem in a nutshell.
IBM maintains its high end market share leadership with DB2, CICS and IMS, but in IT volume is usually the charm. If IBM is right that Big Data and next generation analytics will be a bigger market than ERP it could be in a chance of some volume success. Clearly Big Data is a market, and systems inflexion point. Running smart grids, improving healthcare, instrumenting and monitoring a Smarter Planet.
But to win with POWER IBM will need to POWER the cloud, not just servers. The cloud will underpin Big Data, alongside the wave of 8 way Nehalem boards from Intel. That is – there is a double transition at work.
A few words on Fashion, a Lesson from History
Anyone that thought Oracle wasn’t serious about the Cloud because Larry Ellison dissed it just doesn’t know Oracle. I have been watching Oracle for 15 years now, so I have a number of Larry Ellison fashion t-shirts. Indeed Ellison is the Yves Saint Laurent of the tech world- never missing a trend. He talks it like Chanel, as if one little black dress would get you through life, but he sure knows how to play to industry hemlines.
I remember Ellison panning the notion of Grid Computing when everyone else started hyping it up. Same language – “its just fashion”. Then Oracle went ahead and called its next database Oracle 11g.
While IBM was architecting systems for customers that scaled to thousands of processors, Oracle, quite simply owned grid with that one little g. You see – not many people needed real grid computing. But they wanted 2 and 4 way clusters running Oracle RAC. And the g meant they could feel like they were doing that grid thing.
A couple of seasons before Ellison had dismissed the Internet, and then rolled out the Oracle 9i database. “i” is for Internet. See a pattern emerging? Oracle was always going to make a play for cloud marketing dominance, whether or not this was a tech “revolution” or not.
IBM needs to be careful not to confuse technical ambition, and the needs of a tiny percentage of the market, with the cloud C-spot.
POWERing the Cloud
What do Oracle and IBM both agree on? There is nothing new in IT. Ellison is even saying that with its acquisition of Sun his firm ready to deliver a promise like IBM System 360 mainframe.
But if IBM really wants to play in the Cloud sweetspot or C-spot its going to need to win more Web workloads. IBM should therefore worry less about SuSE and more about Ubuntu. What runs the Cloud? Ubuntu. What is the fastest growing OS for MySQL? Ubuntu. That’s the growth play. And Ubuntu can beat Solaris in volume – something no other IBM OS can claim. Hadoop on Ubuntu on POWER – that’s a Big Data play.
Virtualisation is somewhat of a wild card here, but unless we start to see Linux, Windows, and Solaris running as guests on IBM POWER-based servers, IBM’s play will be limited. VMware is currently better positioned here.
Finally, I just want to talk some interesting installed base dynamics, namely that more IBM middleware runs on Solaris than any other OS. That’s right – Oracle servers and customers run the most IBM middleware. Like BEA (now Oracle), IBM knows hows to make money from Java. But the account management issues get more and more interesting. Oracle already supports many PeopleSoft customers running on Mainframe DB2 so all this is nothing new, but it should be remembered the next time someone from Oracle starts talking about cleaning and simplifying their stack.
In IBM’s favour will be intensifying competition between Oracle, Dell, and HP. In Oracle’s favour- account control.
I maintain that IBM blundered in not acquiring Sun, but now the bed is made. If IBM is to really hurt Oracle it must focus on volume, not the needs of a few global companies. It needs to nail the c-spot.
[update: please see the comments below for clarification on POWER family vs POWER chip. Thanks to Derek and Gordon Haff for reminding me not to let a good line obscure the bits. Also – I need to follow up with some comments on the other leg of IBM’s POWER systems strategy – appliances)
disclosure: Canonical, Dell and IBM are clients.