IBM lands major Unix server deal in Asia

IBM Corp. has won a deal for its 64-bit Power5 Unix servers with China’s State Administration of Taxation, that it says represents the company’s largest Unix installation in Asia.

The Chinese taxation authority has already installed over 100 IBM servers, a mix of eServer p5 595 and p5 570 machines, according to Karl Freund, vice president of Unix strategy at IBM. The installation will rank among the company’s top 10 largest Unix customers, he said.

The IBM servers are running the tax authority’s own taxation software on IBM’s AIX operating system, Freund added.

The tax authority is using the IBM servers for its Golden Tax Project, a province-level data-center consolidation effort aimed at modernizing China’s taxation system, Freund said. The state administration is the country’s central tax authority and is supported by tax bureaus throughout China’s provinces.

IBM initially positioned the deal as a displacement deal, with Freund saying Wednesday that the Power5 servers had replaced all of Hewlett-Packard Co.’s high-end Integrity Superdome servers at the tax authority. He also said that the Superdome servers were powered by Intel Corp.’s Itanium processors.

However, Rich Marcello, senior vice president and general manager of business-critical servers at HP, disputed IBM’s facts. “It’s unfortunate they chose to go out with something so inaccurate,” he said. The tax authority is still running all of its 46 Superdome systems, which are all powered not by Itanium, but by HP’s PA-RISC chips, according to Marcello. The IBM win was with another department of the tax authority, he said, not a displacement deal.

Marcello reiterated HP’s commitment to the Itanium architecture. “We’re 100 percent committed to Itanium and we have a road map going out through 2010,” he said. “Intel is as committed as we are.”

Although IBM hasn’t officially responded to Marcello’s comments, spokespeople at the company said they stood by their original story and maintain that the tax authority is in the process of turning off the HP boxes and replacing them with IBM servers.

No one at the Chinese government agency was available to confirm the facts at press time.

In May 2003, HP announced it had won its largest Superdome win to date with the Chinese tax authority as the company announced its fiscal 2003 second-quarter earnings conference call.

Later that year in August when addressing delegates at the HP World 2003 conference in Atlanta, Carly Fiorina, at that time HP’s chairman and chief executive officer, referred publicly to the deal with the Chinese tax authority, which saw HP displace IBM mainframes.

“We displaced a mainframe — lots of mainframes as a matter of fact — and we provided better technical performance than the mainframe, at about a third less cost,” she said, according to a transcript of the speech on HP’s Web site.

Although IBM claimed the timing of Thursday’s announcement was coincidental, HP is due to release its fiscal 2005 fourth-quarter financial results on the same day.

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Jim Love, Chief Content Officer, IT World Canada

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