Merrill Lynch Cases IT Spending, Server Buying Patterns

Published: June 5, 2006

by Timothy Prickett Morgan

The analysts at brokerage house Merrill Lynch have been taking the pulse of data center managers to get a sense of how things are going out there in IT Land. A couple times a year, Merrill Lynch polls 75 chief information officers in the United States and 25 in Europe to pick their brains on various issues. According to those polled, IT spending among these large enterprises is expected to rise by an average of 5.2 percent in 2006 and by an average of 4.8 in 2007.

Last November, these same people were polled, and they expected spending to increase by an average of 2.7 percent this year. Clearly, there is a little more optimism out there. Merrill Lynch analyst Richard Farmer said in a report released last week that he expects actual IT spending to increase by 7 to 8 percent in 2006, since the small and medium business market is under represented in the polling data.

Across all geographies, spending on laptops was expected to increase by nearly 5 percent, and spending on RISC/Unix servers was expected to go up by nearly 2 percent. Mainframe spending, however, is expected to decline by 1.5 percent among those polled by Merrill Lynch, and spending on X64 servers is only expected to rise by 1.1 percent. On the storage front, spending on network attached storage averaged a 6.3 percent rise in the poll, while storage area network spending is predicted to rise by 5.2 percent in 2006. CIOs say that, on average, spending on application software will grow by 5.6 percent, business intelligence software will grow by 4.8 percent, database software will grow by 4.2 percent, and middleware by 3.3 percent.

Merrill Lynch did not ask specifically about IBM's proprietary servers, but those polled said they expected, on average, that 6 percent of their server budget would be spent on AIX servers, 11 percent on Solaris servers, 19 percent on HP-UX servers, 9 percent on Linux servers, and 55 percent on Windows servers. Some 75 percent of those polled said they believed that Solaris was a better operating system than Linux, but almost all of the companies who said this also said they would not change their spending plans in favor of Solaris. That would be a big bummer for Sun Microsystems. These same CIOs said that they expected to boost their spending on Hewlett-Packard iron in all of the key markets: Windows, Linux, and HP-UX.

While 28 percent of those polled said that power consumption was important to them when it came to servers, 23 percent of those polled said that price/performance was more important and 72 percent said power consumption was not an important enough issue to change their spending plans when it came to servers. About 90 percent of those polled said that power efficiency alone would not overcome "vendor stickiness," and only 7 percent said that power was the main issue.

I have heard a lot of talk with CIOs lately about how power efficiency and virtualization (which drives up server utilization and therefore makes servers yet more power efficient) do not engender server consolidation so much as an expansion in computing capacity. While this is true over the short term, since CIOs can then add lots more computing power to an existing data center without resorting to water-cooling and other exotic measures, over the long haul power will become a central issue. At some point, adding one more server forces a company to build a new data center. At the Red Hat Summit last week, John Williams, director of server and workstation product planning at AMD, jokingly called this the $10 million server, because that is about what an enterprise-class data center costs these days. Once companies squeeze efficiencies out of their existing data centers, provided their workloads are growing like crazy, at some point, power issues force construction. And CEOs and presidents are going to try to put that off as long as possible. That's why I think it is wise to be proactive about virtualization and power issues now; you will get to look like a hero later.

http://www.itjungle.com/tfh/tfh060506-story03.html

HP Scales Down NonStop Servers to Chase New Customers

Published: June 6, 2006

by Timothy Prickett Morgan

Having made the jump from MIPS R Series processors to Itanium chips from Intel in its NonStop line of fault tolerant servers last summer after years of coding, Hewlett-Packard has quickly repackaged its entry rx Series servers and added some NonStop functionality to create a smaller NonStop server line with better bang for the buck in an effort to expand its customers base for these exotic Unix machines.

When the NonStop NS 16000 servers were announced in June, they were about a year behind schedule. The NonStop server platform consists of a special Unix variant and a homegrown clustered database management system that made Tandem famous decades ago as the only real highly available alternative to IBM mainframes. Tandem, which was founded by ex-HPers, was acquired by Compaq in 1996, which was in turn bought by HP in 2001, bringing the Tandem line back home and giving HP a fairly large and sophisticated installed base of customers in financial services, government, and healthcare who had chosen fault tolerant architectures over other kinds of clustered Unix or proprietary solutions. The problem with the Tandem machines, of course, is that they were based on the relatively feeble MIPS RISC processors, which used to be top-notch a decade ago, but which started falling behind other architectures around that time. Moreover, as Unix servers became wickedly popular in the early 1990s and then absolutely mainstream by the late 1990s, application vendors supported Solaris, HP-UX, and AIX, but viewed the much more costly--at least in terms of initial sticker price--Tandem NonStop as a niche platform.

This has limited its appeal in the market to customers who absolutely must have seven 9s of availability--that means the server is up and running 99.99999 percent of the time, which equates to a mere three seconds of downtime a year--for their applications. Think ATM networks, stock exchanges, mobile phone networks, large hospital networks and you'll get the right idea of who buys NonStop servers.

The NS 16000 servers that HP announced last June and began shipping last August cram 16 single-core, 1.6 GHz "Madison" Itanium processors into a single node, and the machine has enough ServerNet interconnection fabric between the nodes, which run the NonStop Unix kernel and the NonStop database, to scale to 4,096 processors in a single system image. (ServerNet is the grand daddy of the InfiniBand interconnect, by the way.) Two months ago, HP quietly announced the NS 14000, a trimmed down version of the machine that uses a slightly slower 1.4 GHz Madison processor and also trims back on the I/O capability to provide a slightly lower price point.

But, HP thinks that it can chase a lower price point by creating a system based more on stock Integrity servers and missing some of the ServerNet electronics and triple redundancy that push availability from five 9s to seven 9s a year. That's about five minutes of downtime a year for five 9s availability. That extra 177 seconds of uptime comes at a pretty high price, thanks in part to the sophisticated triple redundancy, "voter logic" that the ServerNet infrastructure in the NS 16000 and NS 14000 NonStops machines has.

That's what the NS 1000 is all about, explains Craig Wagner, director of solutions and marketing for the NonStop Enterprise Division at HP. The NS 1000 line is built from HP's existing rx2620 Integrity servers, which are two-socket machines that the company normally sells running HP-UX, Windows, Linux, and OpenVMS. The NS 1000 is built using 1.3 GHz Madison processors, and the NonStop's ServerNet interconnect scales only to four nodes, or a total of eight processor sockets. This limits the ultimate scalability of the NS 1000 to 2,048 total processors in a single system image, which, if you think about it, is not much of a limit, especially when you consider that the largest RISC/Unix boxes only scale to 64 or 128 processor cores in a single system image. The NS 1000 can have 8 GB of main memory per processor socket, and Wagner says that when the future dual-core "Montecito" chips are ready from Intel, these will plug right into the Itanium-based NonStop line; so will the future four-core "Tukwila" Itaniums, whenever Intel gets them out the door.

A base NS 1000 with two processors installed, including the NonStop operating system and the NonStop SQL database plus ServerNet links and outbound Gigabit Ethernet networking costs $170,000, says Wagner. That's a lot cheaper than the base NS 16000 node with two processors, which costs $400,000. While this might sound like a lot of money to charge for a two-socket server, when you are talking about high availability in the Unix or mainframe markets, it certainly does not come free, since more mainstream clustered databases require customers to double up on server capacity and do failovers from one machine to another--for instance, using HP-UX servers and HP's MC ServiceGuard clustering software and Veritas clustered file systems from Symantec. With the Tandem approach, you simply have an extra node in the database cluster for redundancy, you do all processing in parallel, and if one node fails, the cluster heals around the failure and keeps going.

Why this fault tolerant approach is not the dominant Unix architecture today just shows how stupid the IT business can be.

Still, if fault tolerant processing cannot be dominant in the market, it surely can be more appealing to existing and new customers. Wagner says that it has been peddling a high-end patient care system to hospitals in conjunction with General Electric for years, but the pricing on the prior NonStop machines meant that the solution was only affordable for hospitals with 500 beds or more. With the NS 1000s, Wagner says that it can make compelling economic arguments to hospitals with as few as 150 beds. What holds true for hospitals holds equally true for smaller telecom, financial services, and governments that need uptime, but do not need seven 9s of it. "There are places in the world where ATMs and point of sale networks are now coming to the market," explains Wagner, "but customers in these emerging markets are extremely price sensitive."

Perhaps most significantly, the NS 1000s give HP something to peddle against its old adversary: Big Blue. Wagner says that somewhere between 75 and 80 percent of the NonStop deals that HP does have NonStop gear being peddled against IBM mainframes. "Mainframes can make a high availability claim reasonably and rationally," says Wagner. "But with the NS 1000s, we can deliver fault tolerance in the same price range of regular clustered Unix servers." He believes that even with the new System z9 Business Class announcements from May, where IBM delivered a smaller z9 mainframe with substantially lower prices, HP can still out-compete IBM for dollars in data centers in established customers in North America and Europe and in fast-growing, emerging markets in Asia and Eastern Europe. Moreover, with about one out of five of its deals displacing a clustered Unix platform, HP is also hoping that it can take a bit out of the Unix businesses of Sun Microsystems and IBM.

HP has been pretty bullish about Itanium in recent months, and the NonStop business is probably the fastest-growing Itanium platform in the world right now; it certainly has that title within HP. In the span of nine months, Itanium-based NonStop machines now comprise 25 percent of NonStop sales. "This is the fastest adoption rate of any new processor that we have ever seen with the NonStops," says Wagner. With the Itanium-based machines yielding a factor of three price/performance improvement compared to the MIPS-based NonStop servers, moving to these new NonStop nodes is a no-brainer. But, then again, customers who have working clusters are loathe to touch them, too. And because customers can mix and match old and new nodes in a NonStop cluster, customers can take their time upgrading.

Which is another thing that is great about the NonStop architecture.

http://www.itjungle.com/breaking/bn060606-story01.html

  http://www.cio.com/archive/040106/edit.html