IBM this week committed itself wholeheartedly to the Intel server platform and, in the process, effectively downgraded its other servers - AS/400, RS/6000 and S/390 - to second fiddle in the corporate strategy. In making its high profile Intel-based launch, it drew closer to the chip giant with development agreements, but also took on Compaq more directly than ever before.
On Monday, in New York, Sam Palisano, a senior vice president who reports to IBM chief Lou Gerstner, laid out his plans to make IBM the prime company for enterprise and midrange server products - an event hailed by Intel as "the day IBM decided to take Intel technology to its enterprise base".
In a speech shared with Andrew Grove, chief executive of Intel, and senior VP John Miner, Palmisano said that IBM and Intel were very close. He added that enterprise computing was traditionally key to IBM's strategy and that the Netfinity 7000, designed specifically to appeal to corporate customers, was targeted to eat into every corporate player's market share - especially Compaq?s.
The black box itself comes in two flavours, rack-mounted and tower. It incorporates redundancy for practically every part of the system and runs Microsoft NT and SCO Unix. It takes its name from IBM?s Netfinity software for managing symmetric multiprocessing (SMP) servers
Palmisano was notably bullish about IBM?s plans and gave every indication he had the full sanction of Gerstner. One IBM source said: "This is of the highest strategic value for IBM and comes straight from the top.?
There was one phrase that constantly tripped from his lips during his short presentation, and that was 'industry standard'. By that, he really meant Intel, explained Bill Colton, a vice president at the IBM PC Company, later.
Palmisano said that IBM was pushing hard to become the leader in the market and had devoted 120,000 service staff, plus the backing of the IBM Finance Company the support division and the entire salesforce to sell Netfinity hard. ?IBM Finance has put aside $17 billion to leverage and address the obsolence issue,? said Palmisano. ?This is a statement from IBM that we?ll embrace our partner Intel and begin to scale the technology into this opportunity segment.?
Then Palmisano wheeled in Intel's Grove, who endorsed IBM?s position, saying he thought SMP servers will scale up significantly in 1998, and adding that IBM and Intel were close on development of Merced, the processor that will offer 64-bit support.
?Slot Two [Deschutes, the next generation of 32-bit Intel architecture] will be available in a few months? time,? he said. ?We are not standing still. The 32-bit line will continue indefinitely. There are hundreds of people working on this but we?re starting a new branch in the shape of a 64-bit microprocessor for high volume servers.?
As IBM and Intel apparently come closer on Merced, Compaq may be left in the cold. Observers speculated that, in return for Grove's endorsement of IBM's entry into the server market against Compaq, Big Blue has agreed to give Intel extended access to its technology.
John Miner, VP and general manager of Intel?s enterprise server group, went further than Grove, claiming: ?This will go down in 1997 as the day IBM decided to take Intel technology to its enterprise base. Merced is targeted specifically for the enterprise market. Today?s standard technology is a four-way system soon to be capable of supporting eight microprocessors and more.?
Clustering and IBM middleware, too, are important elements of the deal between Intel and IBM, Miner said.
He said: ?We have standards for clustering known as the VI architecture and we?re investing in I/O technology to make faster and wider PCI buses. Intel and IBM have a very rich history of working together. In the enterprise we?re working to develop 'wired for management' server technology and the VI specification for clusters.?
He went on: ?We?re heavily engaged on both the hardware and software fronts and tuning to 64-bit Merced technology.?
So where does all this leave the other divisions of IBM, focused for revenue on selling AS/400, RS/6000 and S/390 systems?
While Palmisano was quiet on this point, Colton was clear, claiming a common system management environment, based on software from the Tivoli subsidiary, would tie all the platforms together to protect existing investments. He said: ?Customers want to look after their system environment and so we brought together all our system management groups. They put together an architecture integrating Tivoli and allow our stuff to seamlessly plug in.?
Challenged about competition from Dell, Compaq and Gateway, Colton said: ?People like Dell have come into our space but I don?t think they?ve got it right. Compaq has very good technology but they don?t have all the other things.?
He said that included enterprise class service and support and claimed IBM would attack Compaq on both those fronts vigorously. ?These are a couple of weaknesses that we?d like to exploit,? he said.
And while Microsoft NT was still not highly scalable, Colton said it was not a black and white issue for many of its True Blue customers. ?In a lot of areas, NT doesn?t scale into high availability systems,? he admitted. ?It doesn?t support eight- and 16-way clustering in the 100s. Within a company there may well be large groups with large databases, which don?t see NT doing that,? he conceded, but said customers had a wide range fo applications and system needs within one company.
The admission of NT's limitations did not stop IBM pulling in applications giants Oracle, Baan and SAP to claim that the Netfinity server family can run their enterprise software using Windows NT as the operating system.
Helen Twelvetree, enterprise product manager at Compaq UK, said IBM was reacting to her company?s success.
She said: ?For the first half of 1997, IBM has been struggling. They?re fourth [in the SMP market].?
She claimed that Compaq?s channel customers were already delivering the kind of products IBM had just announced. ?We haven?t found it necessary to put a finance programme in place,? she said. ?Leasing agreements are on offer via our channel partners.?
IBM has finally bitten the bullet, she suggested, and made a choice between its competing midrange server platforms. ?IBM has positioned its midrange boxes as competing against Intel and they?ve realised that customers want Intel-based servers running NT,? she said.
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