IBM systems signal shift toward tighter integration

IBM Corp. shot back at Oracle Corp.’s Exadata platform last week with new server products that combine IBM hardware and software in preconfigured systems for companies doing large-scale data analytics and transaction processing.

The products mark a new push by IBM toward selling complete systems based on its own hardware and software that are optimized for particular workloads. Executives suggested Wednesday that more preconfigured systems will follow from IBM, for digital archiving and retrieval, collaboration, and “business process applications.”

“Today we are talking mostly about business analytics and transaction process management, but we are working on all five of these areas,” said Ambuj Goyal, general manager for development and manufacturing with IBM’s Systems and Technology Group, during a launch event at IBM’s Almaden Research Center in San Jose, Calif.

IBM introduced two Smart Analytics Systems, the 5600 and 9600, that combine its x86 or System z hardware with its Cognos analytics and InfoSphere data warehousing software. They are for organizations that crunch large volumes of data, such as banks trying to spot fraudulent ATM transactions or utility companies managing “smart energy” grids. They follow the release last year of the 7600, which is based on IBM’s System p Unix servers.

The 5600 is on sale now and the 9600 will be available by the end of the quarter, IBM said. Both are offered with optional solid-state drives for faster performance. There is currently no SSD option for the Unix version.

IBM also introduced the pureScale Application System, another preconfigured package that includes its Power 770 server hardware, WebSphere Application Server and the pureScale version of IBM’s DB2 database, which was released in December and can scale across up to 128 nodes. Customers can start with a two-node cluster with a single Power 7 processor in each server, then scale out to build a much larger system, IBM said. The entry price for the two-node system will be in the “tens of thousands” of dollars, IBM said. Final pricing will be announced later this quarter when the product ships.

Illuminata analyst Jonathan Eunice said the systems mark a new approach for IBM. “The whole model for how IBM goes to market is starting to change, and it will change pretty rapidly, with the idea that they are going to advantage their own software stack as opposed to having a server unit that’s completely neutral for all of the ISVs [independent software vendors],” he said.

The systems follow the September launch of Oracle’s Exadata Database Machine, which combines Oracle software with Sun hardware and storage technologies in a preconfigured system for data warehousing and online transaction processing. IBM’s message on Wednesday echoed Oracle’s when it launched Exadata — that the systems are “integrated at every level — from microprocessors to hardware and software.”

Both vendors say configuring and tuning the systems in-house allows them to provide better performance and faster time to deployment. That may be so, but there are also trade-offs, analysts said.

“Customers are going to have fewer choices; they’re not going to have the mix-and-match capability that they once did,” Eunice said. “But the good news is, IBM isn’t taking you back to the world of the ’60s and ’70s. You’re not forced to buy the whole stack. If you want to buy an IBM analytics system and plug an Oracle OLAP cube in the middle, you can still do that. But for most customers it’s not economically practical.”

Dan Olds, principal analyst at Gabriel Consulting Group, agreed. “You don’t have the opportunity with these systems to do the exhaustive shopping for best-of-breed applications that completely meet your needs,” he said. But many IT shops are strapped for cash and can’t afford the extensive service engagements required to put these high-performance systems together in-house. “If these products get you to 80 or 90 percent of where you want to be, then that’s a pretty good trade-off,” he said.

The strategy will also affect channel partners, Eunice said. “Systems integrators used to get paid for a lot of that legwork and elbow grease; they’re not going to get paid for that nearly as much if the vendors do the integration,” Eunice said.

One partner selected by IBM to appear at its event said that won’t be the case. “It’s positive for us because the systems are focused on faster time to market,” said Matthew Castle, a managing director at Perficient, an IT consulting firm in Cupertino, California. Channel partners will still have a role to play, he said, in extending the data models and reports that IBM provides for analytics, for example.

IBM is clearly targeting Oracle with the new products. Its executives, normally reserved with competitive claims, cited industry benchmarks intended to show how IBM’s hardware can outperform Oracle’s. “This is unusual for us to be so direct,” admitted Arvind Krishna, general manager for information management with IBM’s software group.

IBM also announced it is making US$500 million in loans available to Sun channel partners if they want to migrate over to selling IBM systems.

IBM picked three customers to appear with it on stage here, all of whom said they had migrated from Oracle’s database to IBM’s, and in some cases from Sun to IBM hardware. Cormac Burke, director of SAP applications at PacificCorp., delivered just the message that IBM wants people to hear. The utility company migrated away from Oracle because of its “increasingly hostile” relationship with SAP, he said.

IBM’s more aggressive approach to Oracle reflects the reality of today’s enterprise IT market, Eunice said, in which a smaller number of very large vendors are competing for higher-stakes deals.

“Consolidation brings the elbows out,” he said. “In the old days there weren’t that many virtues to taking on one specific competitor. Now the folks who are left are massive, powerful companies, and it’s imperative they succeed at all costs.”

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