Feeds

IBM boasts Sun-HP server pact pillaging

Customer theft tit-for-tat

Mobile application security vulnerability report

Now that IBM has reported its financial results for the first quarter of 2009, the company can brag a little bit about competitive takeouts for server deals.

To that end, Big Blue says that in the first quarter it landed 102 deals that displaced servers made by rivals Hewlett-Packard and Sun Microsystems. IBM has been averaging closer to 125 deals a quarter for competitive replacements before the economic meltdown, so the fact that the pace has slowed a bit is not surprising. But as the economy stays down - and provided that Big Blue makes Sun and HP shops offers they can't refuse to move to Power and sometimes mainframe platforms for some of their workloads - these numbers could increase.

Back in November 2008, HP was bragging that it had converted 250 mainframe shops to its Integrity and NonStop platforms in the prior two years. IBM got annoyed by these claims and said that from January 2004 through November 2008, more than 5,000 customers worldwide had dumped gear from HP, Sun, and EMC and moved to IBM alternatives, with 150 HP and Sun server customers moving to IBM's System z mainframes and more than 1,300 moving to Power-based servers from HP and Sun boxes. In 2008 alone, the company claimed, some 800 customers moved to System x x64-based machinery.

The pace of competitive takeouts in the first quarter has clearly slowed then. But any competitive takeout is a good one because the revenue stream from a takeout tends to extend out for years with hardware and software upgrades, maintenance fees, and add-on services. Which is why server makers expend so much effort to knock a competitor out of an account - and this is particularly so for big server deals where the revenues and the commissions from the sale are large.

In Q1 of this year, IBM says that its Power Systems lineup won 62 competitive deals and that half of them had a server/storage transaction value in excess of $1m each. 34 customers moved to IBM Power iron from HP boxes, and 28 moved from Sun gear. The mainframe apparently did almost as well, with 40 competitive wins, according to Big Blue. One deal replaced Sun gear, five replaced HP gear, and the remaining 34 replaced a combination of Sun and HP gear with mainframes.

IBM did not give any competitive win statistics concerning its System x line this time around, and that is probably because that x64 server business, despite the popularity of blades, has been under pressure, presumably mostly from very aggressive actions by HP and Dell in the x64 space and maybe a few deals from Sun. On Monday, IBM said that its System x sales (which includes BladeCenter blade server sales) fell by 27 per cent in Q1.

System x sales were off 18 per cent in the third quarter of 2008 and then fell by 32 per cent in the fourth quarter. Something other than the economic meltdown is going on here, and IBM's vague suggestions that customers are moving to more efficient mainframe and Power Systems iron is not an explanation.

With HP being the other major server player (in terms of revenues) - and Sun's server future uncertain even with its proposed acquisition by Oracle in the works - you can expect IBM to ratchet up the pressure on these two vendors, particularly in the Unix sector where IBM has become the dominant player after a decade of hard work (and some luck that HP/Intel and Sun screwed up their Itanium and Sparc chips for the better part of five years). IBM says that through 2008, nine out of ten competitive takeouts across the company involved competitive wins against HP or Sun, and this ratio is probably not going to change. ®

Bridging the IT gap between rising business demands and ageing tools

More from The Register

next story
THUD! WD plonks down SIX TERABYTE 'consumer NAS' fatboy
Now that's a LOT of porn or pirated movies. Or, you know, other consumer stuff
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
FLAPE – the next BIG THING in storage
Find cold data with flash, transmit it from tape
Seagate chances ARM with NAS boxes for the SOHO crowd
There's an Atom-powered offering, too
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.