GST, Bull Team For IBM System p-Compatible Servers

GST, Lake Forest, Calif., this week expanded its product line with a series of high-end Bull Escala servers from France-based Bull, which has a long-term OEM contract for the System p servers with IBM.

Those servers are built by IBM and sold to Bull with a an enclosure, POWER5+ processor, the AIX or Linux operating system, and the bare minimum of memory and storage to make it a complete server, said David Breisacher, CEO and chairman of GST.

GST purchases the barebones servers from Bull and then fleshes them out with its own line of System p-compatible memory, storage, iSCSI RAID and networking cards, and other components for the U.S. market, Breisacher said.

GST has for years built its own line of System p-compatible components, especially storage components and arrays, making the move to sell the servers themselves a natural one, Breisacher said.

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GST's Bull Escala server line is list priced at anywhere between 30 percent and 50 percent less than the corresponding IBM models, Breisacher said.

"The key to our pricing is that the Bull servers come off the IBM manufacturing line with processor, AIX, and base components from IBM," he said. "We add everything else. And we charge differently for maintenance. Plus we sell the storage and the SAN for the servers."

Breisacher said his company offers solution providers, including those who partner with IBM, an alternative to IBM's System p servers, especially those who get shut out of a deal because another solution provider got the special bid price from IBM.

"In the midrange, IBM has a structured partner program," Breisacher said. "Everybody starts with the same discount. IBM picks one partner for a 25 percent discount for a registered deal. Or, if two partners claim the deal and IBM can't decide which gets the discount, they each get 12.5 percent. From the end user's perspective, of all the IBM partners, only one gets that discount. A lot of customers like to have competitive quotes."

Breisacher said he is not under an illusion that he can compete toe-to-toe against IBM. "We know IBM will win far more deals than we will," he said.

That is true, said David Stone, vice president of business development at Solutions-II, a Littleton, Colo.-based IBM solution provider with a strong System p practice.

"It's going to be a tough row to hoe for GST," Stone said. "They're only going to get the partners who are not bonded tightly to IBM -- unless GST has a huge sales force, which they don't or I would have heard of them."

Bull has been struggling for years to build a market in the United States, unlike Europe, where the company is strong, Stone said.

Any IBM solution provider that works with GST risks its IBM relationship, Stone said. "If they have a good relationship with IBM, they don't want the risk," he said. "So GST might get some smaller partners."

GST has already signed one channel partner, Eden Prairie, Minn.-based AlphaCom.

AlphaCom is a small distributor of used IBM servers and used telephony products to other solution providers, and also has its own direct customers, said Larry DuMoulin, CEO of the company.

AlphaCom currently sells used System p servers to IBM and non-IBM solution providers, DuMoulin said. "I'm not in there to compete with IBM," he said. "I'm in there to complement them. I'm in there to let solution providers provide an alternative to IBM. Competition is good for the customer."