IBM Hardware and Financing Fire-hose Blasts; HP Offers ROI Help

 

IBM Corp. unleashed a series of hardware and financing announcements last week. In a number of news blasts IBM announced a new x86 servers based on the latest Intel Corp. processors, new System p servers based on IBM's Power6+ chips, and $2 billion in financing to accelerate smart infrastructure initiatives. Meanwhile, Hewlett Packard Co. announced new data center transformation services designed to help enterprises understand the return on investment (ROI) that can be achieved through consolidation and virtualization.

Focal Points:

• IBM announced two-socket System x3400 M2 and x3500 M2 tower servers and two-socket System x3550 M2 and x3650 M2 rack servers. The rack servers have greater than 92 percent efficiency power supplies and utilize IBM's Active Energy Manager to monitor and manage power consumption. IBM claims the servers deliver up to a 60 percent reduction in power when idle and up to 25 percent reduction when fully utilized versus the previous generation.  The System x3950 is the reference architecture for VMware Inc.'s vSphere scalability and is the only platform that supports all of the new scalability features of vSphere 4.0, according to IBM officials. For the mid-tier market IBM and SAP AG have pre-built a pre-installed stack, called SAP Business All-in-One Fast Start, that integrates SAP's Business All-in-One software and best practices with IBM's System x3850 M2 or BladeCenter S servers and Novell Inc.'s SuSE Linux Enterprise. This optimized offering speeds application deployment to less than 10 days and provides a low total cost of ownership (TCO).
• IBM also unveiled enhanced Power 520 and 550 servers that utilize the latest Power6+ processors. The 520 comes with two or four cores and a clock speed of 4.7 GHz while the 550 allows up to eight cores and has a clock speed of 5.0 GHz. Either system supports up to 2.5-inch SAS or Solid State Drives or a mix of both drives. IBM asserts that with the proper mix of drives I/O energy consumption can be reduced by 90 percent while average drive throughput increases tenfold. The company also announced the two-socket BladeCenter HS22 with up to 96 GBs of memory and speeds up to 1333 MHz and the BladeCenter single-wide four-core JS23 and the double-wide eight-core JS43. These systems have PowerVM virtualization included at no extra cost. In addition Novell announced that its SuSE Linux Enterprise 11 for Power is available and incorporates features unique to the platform such as PowerVM active memory sharing, DLPAR dynamic memory removal, and node hot remove and I/O hub hot remove.
• In support of the American Recovery and Reinvestment Act (ARRA) IBM Global Financing (IGF) is dedicating $2 billion in financing to help U.S. organizations move forward with IT projects that could improve their infrastructure or competitive edge. The areas identified in the Act that are eligible are smart grids, health information technology, and broadband access. IBM states that it has created the program to enable credit qualified clients, enterprises, and municipalities to jump start economic stimulus technology projects that might otherwise be delayed until 2010 or 2011, as the stimulus bill works through the system. IGF is putting in place a dedicated marketing and sales resources to help deliver assistance through one of five financing programs: JumpStart rates; low rate financing; deferred payment plan; IBM project financing; and IBM IT Financing Facility. JumpStart rates are enhanced low rates and flexible payment options that leverage tax breaks. The deferred payment plan will provide 12 month financing at zero percent for IBM Global Business Services (GBS) division services with no payments for the first 90 days. The project financing is a customized all-inclusive financial package that can make it easier to manage the upfront investments and ongoing operational costs. The IT Financing Facility is a structured line of credit for complex projects.
• HP unveiled three new data center transformation (DCT) services designed to help executives understand the costs of their data centers and the gains that can be achieved through consolidation and virtualization. The Rapid Opportunity Analysis is delivered through the DCT Experience Workshop and covers the 10 key critical success factors enterprises need to address. The Rapid ROI Analysis takes advantage of the more than 200 standardized solutions that HP has developed. The one day session examines the enterprise's current state and potential future state to determine the type of ROI executives can expect. The Business Case Development Service is a detailed in-depth analysis that estimates project costs and benefits and provides a CFO-level business case. For companies that go through the business case development exercise HP will guarantee the price and ROI. 

Experton Group believes IBM's hardware announcements, and similar ones from HP, are very aggressive and make it more difficult for Cisco Systems Inc. and Sun Microsystems Inc. to succeed in the server space. As part of the IBM virtualization enhancements is the BladeCenter Open Fabric Manager, which like HP's Virtual Connect targets the same space Cisco is hoping to gain traction with its Unified Computing Server. The more powerful Intel Nehalem processors, along with the unique management software offered by the big two, will require Sun (and soon Oracle Corp.) to invest heavily in new SPARC servers, create me-too offerings, or fade slowly away.

The IGF actions demonstrate IBM's commitment to solving business challenges, and not just technology issues, that the U.S. government has put as a top priority. This is needed because the stimulus funds will not be readily available and most IT projects are not "shovel ready." Therefore, IBM's leap into the breach will go a long way towards getting organizations started down the path towards a "smarter planet." HP's ROI services offer business and IT executives with the types of tools needed to help get transformational projects on the books and should be considered by executives recognizing the need for change but lacking the in-house capabilities.

IT executives should take advantage of the tectonic shifts in the server market by pushing their strategic server business partner(s) to help them achieve their business goals and objectives by providing them with more targeted financial and technical services and support.