IBM, HP Processors Spotlight Declining Unix Market


The unveiling of IBM's new POWER7 and Intel's new Itanium 9300 processors on Monday come at a time when demand for traditional Unix servers, which are based on such processors, is gradually declining.

They also come at a time when the third most important Unix processor line, Sun Microsystems' SPARC, is in a state of flux thanks to the acquisition of Sun by Oracle.

Together, these are starting to impact the channel, which is seeing fewer Unix server sales but more consolidation of applications.

IBM on Monday unveiled its POWER7 processors which feature eight cores running up to 32 threads, or congruent computational tasks, per chip.

The POWER7 also includes new memory optimization capabilities, the ability to allocate the on-chip cache to four cores while turning the other four off to cut power consumption, and expanded virtualization scalability.

IBM also introduced a number of new POWER7-based servers.

Intel on Monday unveiled its Itanium 9300 processor, code-named Tukwila, which features four cores running up to eight threads per chip.

Hewlett-Packard is by far the largest user of Itanium processors, which form the core of its Superdome servers, which run the HP-UX Unix operating system. HP became heavily invested in the Itanium platform after it abandoned development of its own PA-RISC processor technology in 2001.

Other server vendors working with Itanium in Unix, Linux and Windows environments include Fujitsu, GroupeBull, Hitachi, NEC, SGI, Unisys and Supermicro.

The future of the Solaris Unix operating system environment has changed with the closing of Oracle's acquisition of Sun. Oracle promised to continue development of Solaris and the ex-Sun SPARC server line, but going forward will optimize the products specifically for increasing the performance of Oracle applications.

Changes to the Unix server processors come at a time of a slow decline in the number of Unix servers sold.

IDC in December reported that, in the third quarter of 2009, Unix server revenue dropped 23.4 percent compared to the same period in 2008. It totaled $2.8 billion in the quarter, accounting for 26.9 percent of quarterly server spending.

However, for IBM, it remains an important market. IDC, in that same report, said that IBM's share of the third quarter 2009 Unix server market grew 5.1 percent over that of the prior year, giving it a 39.5 percent market share.

Solution providers are seeing the impact of declining Unix server sales and the importance of working with their installed base.

There used to be something like 10 or 11 vendors using Itanium processors, with the only company really driving "volume" being HP, said Mark Gonzalez, president of Nth Generation Computing, a San Diego-based solution provider and HP partner.

The challenge for HP, as well as for IBM and Sun, is that the price/performance ration of using multicore X86 chips has gotten to the point where, unless a customer specifically needs a 32-processor or 64-processor box running a proprietary OS like HPX or AIX or Solaris, it is a hard sell, Gonzalez said.

"Is there a future for the product?" he said. "The answer is yes, just like there continues to be limited life in the mainframe and in the HP Tandem NonStop products. Will it or POWER be a widely adopted architecture? The answer to that is no. The x86 architecture won the chip war just as Windows and Linux have won the OS wars."

For IBM solution providers, it is easier to see a silver lining in the decline of the Unix market because of IBM's increasing share of that market.

Now that IBM has released the POWER7 processors, it is hard to imagine anyone else competing in the Unix market, said David Stone, vice president of business development at Solutions-II, a Littleton, Colo.-based solution provider and IBM partner.

"If all the performance claims are true, no one can compete," Stone said. "And with all the virtualization capabilities, it is to Unix what VMware is to Intel."

IBM's growth in the declining Unix market is coming at the expense of HP and Sun, Stone said. "Unfortunately, there's few Unix customers being created," he said.

However, IBM does have opportunities to grow its POWER7 server business outside of the Unix environment in areas like high-availability computing and grid computing, Stone said.

"This is especially true in the high-end data base market, both with DB2 and Oracle," he said. "Oracle especially. There are a lot of places where IBM has made inroads with Oracle at the real high end of our customer base."

IBM's POWER processor servers allow customers to run in a variety of environments, including AIX, Linux and other high-end applications, said George Loridas, senior sales executive at CCS Technology Solutions, a Tustin, Calif.-based solution provider and IBM partner.

The Unix platform can actually be the lower-cost option to high-end Windows environments, Loridas said.

For instance, the license for many applications is paid for on a per-processor basis, but with the power of a Unix server such as those based on the POWER7 processors, it is possible to get better performance running significantly fewer processors than for Windows, Loridas said.

"For other customers that need true performance, they will use Unix," Loridas said. "Or other customers will use Linux on POWER-based servers just so they don't depend on Windows."

For the most part, however, the only time new customers will adopt Unix or IBM's POWER servers is when they are considering the best way to implement completely new applications and are considering choosing from a number of potential vendors, Loridas said.

"The bulk of vendors come in with Windows solutions, but with a lot of applications, including SQL and Oracle, the licensing cost can be less expensive with Unix," he said. "But a lot of consultants push Windows because they can get better integration and recurring revenue over time, and make a lot more money than they can with Unix."