IBM, SuSE Challenge Blade Economics

The joint plan, the first of its kind, allows customers running SuSE Linux Enterprise Server 9 in an IBM BladeCenter chassis to purchase a single license supporting up to 14 blades.

IBM and Novell Inc.s SuSE Linux have joined forces to offer customers a single subscription option for servers running SuSE Linux Enterprise Server 9 in an IBM BladeCenter chassis.

"What we are offering is a single SLES 9 license for an IBM BladeCenter chassis, which is the first of a kind-pricing deal as, until now, operating systems and applications have been priced per user or per server or via an enterprise license," Juhi Jotwani, the director of IBMs BladeCenter and xSeries solutions in Raleigh, N.C., told eWEEK.

IBMs BladeCenter chassis supports up to 14 blades that can be Intel Corp., Advanced Micro Devices Inc. or Power-based, and the license can be used with any of these blade servers as long as they are associated with the chassis.

The license is priced at a flat fee of $2,792 for a one-year chassis license or $6,980 for a three-year license, and includes standard 30-day installation support.

This is a cost savings of some $17,100 for customers who select the three-year option and who are running 14 blade servers, compared with the cost of buying a license for each individual one, Jotwani said.

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Ed Anderson, Novells vice president of product marketing, told eWEEK that the price had been set at the cost of running eight blades, "and everything after that is just cost savings."

IBMs offering follows that of competitor Hewlett-Packard Co. At LinuxWorld in San Francisco in August, Red Hat and HP announced an all-in-one software bundle designed for the Red Hat Enterprise Linux and HP BladeSystem environment.

In addition to RHEL (Red Hat Enterprise Linux), the companies offered Red Hat Network products via a customized HP BladeSystem tool kit.

The pair also offered clustering support with Red Hat GFS (Global File System) in a package with HP Serviceguard for Linux.

Together, the HP BladeSystem, the RHEL management bundle and the HP BladeSystem Integration Toolkit for Red Hat Network Version 1.0 are designed to make it easy to deploy multiple servers within an HP BladeSystem enclosure, company officials said at the time.

But IBMs Jotwani said the solution Big Blue is announcing with SuSE is unique and that the HP and Red Hat offering was a "mandatory bundle with Red Hat management tools, thereby removing the value to those customers who do not want or need those bundled applications."

Jotwani added, "I dont get the customer value proposition or the flexibility of choice in that offering. In contrast, we are offering a pricing deal that covers just the SLES 9 operating system for all the blades running in our chassis, which is very different and the first of its kind of offering."

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However, Efrain Rovira, HPs worldwide director of Linux marketing in Houston, rebuffed Jotwanis criticism, telling eWEEK that IBM and Novell were simply following its lead, but with an "incomplete offering. If a customer is running 14 blade servers and a variety of applications, I am pretty sure they want the software that manages that included, which is what we did," he said.

For his part, Novells Anderson said that while this latest deal clearly benefits IBM by allowing customers to buy more blades and put them in the chassis without having to pay additional software costs, it also helps Novell promote the adoption of Linux, particularly in the blade environment.

"One of the problems weve seen is that as users think about adding new blades they are faced with getting another software license, and sometimes the software procurement is different from the hardware procurement process and it becomes this big barrier to continuing the adoption of Linux as a server platform," he said.

The goal for Novell was thus to streamline that licensing process and let customers who bought this single license scale up or down within the chassis without having to go back and buy additional licenses, he said.

IBM and Novell are also working together on the formation of, a planned collaborative organization aimed at spurring development and innovation around blade technology.

Jotwani also pointed out that as the cost of the operating system is always more expensive than that of the hardware, by reducing the software cost IBM was hoping that those customers would consider using that money to buy more of its hardware or other applications.

IBM already holds a 42 percent share of the blade architecture market, according to research group IDC, and has shipped more than 250,000 blades since market introduction. Big Blue also makes some 30 percent of its revenue in the SMB (small and midsize business) space.

Asked about the competitive threat from Microsoft Corp. in this space, Jotwani said more than 60 percent of IBMs BladeCenters are sold with Linux, "so that speaks for itself about the pervasiveness of Linux on the BladeCenter platform. Many companies are moving from proprietary systems to open systems, migrating from Sun to Linux, which gives them a huge cost saving," she said.

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