IBM sells speed, not sizzle

For the second year in a row, IBM has made major changes to the microchips in its line of servers. After moving to copper wiring from aluminium last year, Big Blue announced its new AS400e servers are being shipped with copper-wired microchips produced with silicon-on-insulator (SOI) transistors.

According to IBM, the SOI technology protects the millions of transistors on each microchip with a “blanket of insulation,” thereby reducing electrical leakage that wastes power. The company expects the new insulation to increase the performance of its processors by 20 to 30 per cent.

Alan Freedman, an analyst with IDC Canada Ltd. in Toronto, suggested the new changes could spark an increase in sales of IBM servers, if the SOI technology performs as well as the copper wiring did in 1999.

“They did very well on the Unix side with the RS6000 S-80 that came out in 1999,” Freedman said. “That’s a very positive indicator of what the new architecture can do.

“The AS400 was due for a refresh,” he added. “And (IBM) have been very successful in refreshing the RS6000 line, and to a lesser extent, the mainframe line.”

Barry Pow, the AS400 product manager for IBM Canada, agreed with Freedman’s assessment, noting AS400’s last generation was released two years ago.

“The result for the AS400 is that we’ve produced a significantly more powerful set of machines than the previous series, which were running on an aluminium wired processor without the silicon,” Pow said. “In fact, our performance is about 3.5 times higher in the high end as a result of this.”

That increased speed will be a significant selling point for IBM, Freedman said.

“Customers need availability and scalability,” he said. “But one of the indicators they are looking for is transactions per minute, especially if it’s going to be an on-line transaction-based server.”

He added that the AS400 line is often used for transaction-based work, especially in financial institutions and manufacturing and distribution centres.

In the first quarter of 2000, Freedman said IBM sold 33 per cent of the servers in Canada. AS400s accounted for a little less than one quarter of that.

“They really have a loyal set of customers,” Freedman said. “People seem to be very pleased. Once they get an AS400 they tend to stick with it.”

IBM’s new AS400e line consists of nine different servers, ranging from the entry-level 250 to the high-end 840. The company has also included two dedicated Lotus Domino servers, a feature introduced last year, as well as two servers, the SB-2 and SB-3, designed to handle applications in a database-applications-client server three-tier environment. Prices for the various servers range from a low of $9,000 for the 270 Domino server to more than $1 million for the 24-way 840. The units are already being shipped in Canada.

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