IBM spices up its Unix server line

IBM Corp. is trying to drive sales of its eServer pSeries family of high-end Unix servers by boosting the boxes’ power and revamping the pricing scheme.

“We’re going to be offering customers anywhere from 65 per cent to 90 per cent more performance for the same amount of money they were spending literally… days ago,” said Jim McGaughan, director of IBM eServer Strategy in Somers, N.Y.

IBM will be building the Power 4+ chip into its eServer p690, p670, and p655, company officials said. Power 4+ is a 64-bit microprocessor that contains two processors, a high-bandwidth system and a large memory cache and I/O interface. IBM will sell these servers at the same price as the earlier pSeries servers, which were powered by the Power 4 chip. The company is also dropping the price of its Power 4-enabled servers by 25 per cent, McGaughan said.

IBM has increased the speed of its I/O interface by a factor of three, and has integrated peripheral component interconnect extended (PCI-X) adapters, he added.

The p690 will be offered in eight, 16, or 32 processor configurations with either a 1.5GHz or 1.7GHz Power 4+ chip. Both include 8GB of main memory, two 36GB hard drives and IBM’s AIX operating system (OS).

The p670 will be available in four, eight, and 16 processor configurations; each will have 4GB, 4GB, and 8GB of main memory respectively, with two 36GB hard drives, and the AIX OS. Both the p670 and the p690 were slated for release on May 30.

The p655 comes in either a four-way configuration at 1.7GHz or an eight-way configuration at 1.5GHz. Both will contain 4GB main memory, and a 218GB disk drive, and the AIX OS. This will be available on July 25.

McGaughan said IBM has also altered its pricing scheme by introducing its capacity on-demand program.

“If you’re a retail business and your business spikes in mid-November (due to holiday shopping)…there is about a six week period in the retail period where you do about 60 to 65 per cent of all your business,” McGaughan explained.

“In the past, we would have told a customer they would have had to buy a machine big enough to handle that big spike for their peak seasonal transactions. Then for the rest of the year they’ve got systems that are loafing along with utilization rates that may be as low as 25 per cent, that you spent a lot of money so you could handle that six weeks of panic.”

Now buyers could purchase, for example, a four-way configured p670 with four dormant processors for a total of eight. This way, the user can activate those processors permanently or for a short period of time when needed. The user would purchase this four-way server at 60 per cent of the cost of an eight-way configured p670 server.

Under the pricing scenario called Upgrade On-Demand users would pay 20 per cent of the cost of the eight-way configured p670 server for every two processors – the processors have to be activated in pairs – they chose to activate. If they activated all dormant processors, they would pay no more than if they had purchased the eight-way p670 server initially.

Users also have the option of turning on processors for a finite period of time. Much like a pre-paid phone card, users would purchase a 60-day activation card, where they would receive 60 network days, so that for example, a store could tackle the busy Christmas season. This is referred to as On/Off Capacity On-Demand.

However, if users choose to simply purchase the base systems, pricing is as follows: the p655 retails at US$50,000 for the four-way, 1.7GHz server, while the eight-way, 1.5GHz server will sell for US$70,000.

The p670 servers will sell at US$190,411 for a four-way configured server, US$299,011 for an eight-way configured server, and US$494,897 for a 16-way configured server.

The p690 servers at 1.5GHz will retail at US$493,386 for an eight-way configured server, US$822,936 for a 16-way configured server, and US$1,441,436 for a 32-way configured server.

The p690 at 1.7GHz will sell for US$568,386 for an eight-way configured server, US$972,936 for a 16-way configured server, and US$1,741,436 or a 32-way configured server.

With this strategy of modifying the pricing scheme, IBM hopes to increase its marketshare in the Unix arena. In Canada, IBM currently holds the number three spot with 25 per cent marketshare, after Sun Microsystems Inc. with 37 per cent marketshare, and Hewlett-Packard Co. (HP) with 33 per cent marketshare, according to Alan Freedman, research manager, infrastructure hardware, at IDC Canada Ltd. in Toronto.

In the mid-range Unix market that tracks servers from $100,000 to $1,000,000 IBM holds the number two spot after HP. Sun generally sells smaller Unix boxes, and Freedman said 2002 was a “disastrous” year for the Unix market in Canada. Users either held off purchasing, or bought smaller units because of the decrease in budgets for capital expenditures.

IBM is based in White Plains, N.Y. IBM Canada is based in Markham, Ont. For more information visit