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Server OEMs and chip makers are turning a spotlight on the high end of the systems market, ramping up the rhetoric for their competition in the highly profitable but shrinking Unix space.
IBM made its move Dec. 8, with the rollout of its first powerful Power7 systems, which promise chip- and system-level features that greatly improve performance, energy efficiency and virtualization capability over current servers running on Power6. At about the same time, Intel and Hewlett-Packard introduced the long-awaited 9300 series next-generation Itanium processor, once code-named Tukwila, with a road map showing plans for several more generations.
In addition, at the ISSCC (International Solid-State Circuits Conference), the newly combined Oracle/Sun Microsystems showed off its SPARC T3, also known as “Rainbow Falls.” The 16-core chip-with eight threads per core-doubles the core count of the previous SPARC T2, and officials say it is an indication of Oracle’s dedication to Sun’s SPARC and Solaris hardware business.
All are vying for business in a Unix space that, while in still in demand, is seeing its share of the overall global server market shrink.
According to research company IDC, the Unix market accounted for 26.9 percent of server spending worldwide in the third quarter of 2009-or about $2.8 billion. However, in the first quarter that market percentage was about 33 percent. So, while not in free fall, the Unix market is sinking.
“There’s still a lot of money in big Unix systems, and even in smaller Unix systems,” Gordon Haff, an analyst with Illuminata, said in an interview. “Microsoft will argue that you can do almost anything in Windows that you want to do. But a lot of IT administrators would probably argue that.”
The vendors agree. Scott Handy, vice president of worldwide marketing and strategy for IBM’s Power systems platform, called the $14 billion Unix market “robust,” adding that businesses are looking for ways to get greater scalability, reliability and efficiency from these systems while reducing their capital and operational costs. Martin Fink, senior vice president and general manager of HP’s Business Critical Systems unit, similarly said businesses are looking for more performance, scalability and energy efficiency from these larger systems as they look to consolidate workloads.
One trend that has come out of the recent announcements-including Oracle’s 5-hour marathon the day it closed the $7.4 billion acquisition of Sun-is that OEMs are no longer focusing on the speeds and feeds of their new processors. Instead, the chips become a key part of a larger server rollout.
“There is a fundamental shift away from the processor only and [toward] more how they fit within the system ecosystem,” Charles King, an analyst with Pund-IT Research, said in an interview. “Power7 generates a lot of innovation, but it’s only a part of the [overall server] innovation.”
With its Power7 systems, IBM officials spoke not only about the performance increases in the chip, but also about overall enhancements to the systems-from virtualization capabilities to energy efficiency to software upgrades that support the new servers-and how the new systems support IBM’s larger Smarter Planet Initiative.
Oracle officials talked about the Sun SPARC/Solaris servers as a foundation for high-end integrated hardware and software offerings, while both HP’s Fink and Kirk Skaugen, vice president of the Intel Architecture Group and general manager of its Data Center Group, touted the capabilities of the new Itanium chip when combined with HP systems.
All these feature enhancements-reliability, scalability, performance, energy efficiency and virtualization-are key to Unix customers looking for homes for their mission-critical business applications.
IBM Dominates a Crowded Market
IBM’s Power and Sun’s SPARC processors are traditional RISC architectures. However, while Itanium is based on Intel’s EPIC (Explicitly Parallel Instruction Computing) architecture, it plays heavily in the Unix space. Eighty-five percent of Itanium workloads are HP-UX, according to Skaugen and Fink.
In this race for Unix business, analysts judge IBM to have the upper hand. In a report Feb. 10, King noted that IBM trailed both HP and Sun in the Unix space a decade ago. Now it owns 40 percent of that space and stands to gain more, given what the company has shown with Power7 and the weaknesses in its rivals’ positions, according to the analysts.
Roger Kay, an analyst with Endpoint Technologies Associates, in a report Feb. 10 said proponents of Power7 or of Itanium 9300 can point to numbers-of cores, threads and transistors-that support their sides. Those are important, he said. However, what’s most in question is the “sheer amount of work of which a particular core is capable and how many total processors a big server can support,” Kay said. “And this arena is IBM’s home turf. It’s these large chips that power the company’s mainframes, one of its key differentiators.”
IBM’s Handy said it will be difficult for competitors to come close to offering anything close to the Power7 systems.
“We don’t see Sun or HP really even catching up to Power6,” Handy said.
Sun has been losing SPARC customers for years, and that accelerated in 2009 after Oracle announced its intent to buy the company, analysts said. As for Intel, it will continue to struggle with the fact that HP is the only major customer for Itanium, while continuing to ramp up the capabilities of its Xeon processors, including the upcoming eight-core “Nehalem EX” chip.
However, neither Illuminata’s Haff nor Endpoint’s Kay see Itanium disappearing any time soon.
“It may not be burning down the house, but Itanium still makes money for both Intel and HP,” Kay wrote.
Joe Clabby, president of Clabby Analytics, isn’t so sure. In a report Feb. 10, Clabby said he sees the server market consolidating around three platforms: Xeon, Power and IBM System z mainframes. Itanium is being hurt not only by Power, but also by Xeon.
“Intel’s enhancements to Xeon processors now put that chip in competition with its own Itanium technologies,” Clabby said. “We believe this is marginalizing Itanium, leading buyers to see the light and start moving off of the platform.”
Also coming into the picture soon will be Advanced Micro Devices’ 12-core “Magny-Cours” Opteron chip, which Kay said offers high-end x86 systems users an alternative to both Intel and IBM.
“AMD, which has all but given up competing on total throughput and solutions, like IBM, or even performance per dollar, like Intel, has fallen back on a narrow but defensible claim of best performance per dollar per watt,” Kay wrote. “While Intel goes after the pure performance end of the x86 spectrum, AMD delivers reasonable performance, but not at the expense of both acquisition and operating cost. Some IT managers will appreciate that.”