Sirius Scopes The IBM i Power Systems Market

July 15, 2013 Dan Burger

Stoked by Power7 and Power7+ server sales and growing interest in PureFlex pre-integrated infrastructure, storage developments, and the emergence of managed systems, Stan Staszak of Sirius Computer Solutions is a happy guy. Staszak, the director of Power Systems solutions at Sirius, describes 2013 at the halfway point as “one of the best years we’ve seen in a while.” He gives partial credit to the rebounding economy, but most of it to the price/performance of the Power7 and Power7+ product lines and an IBM Power Systems lineup on the rise.

That’s not surprising for an executive in the IBM sales channel, where a briefcase full of confidence is part of the business attire.

Power Systems accounts for about 20 percent of overall business at Sirius, which not that long ago collected 85 to 90 percent of its total revenues from the IBM midrange platform and companies running JD Edwards software. That’s when Staszak was the new guy at Sirius. Since then, Sirius grew in many directions that stretch beyond OS/400 and IBM i and beyond IBM. However, Power Systems remains the flagship server brand, according to Staszak, who has witnessed the changes at Sirius and in the IBM midrange.

About 40 percent of the Power Systems installed base that Sirius tends to call themselves IBM i shops, and close to 60 percent put AIX in the driver’s seat. “That’s just an opinion . . . a guesstimate,” according to the Power Systems honcho, who also noted that although “the footprint is 40-60, the revenue it is closer to 50-50.”

As you would expect, organic growth comes from the AIX side where competitive displacements are fairly common. On the i side, the install base is typically loyal, but lacking in terms of new customer growth.

Staszak’s view of the Sirius i shops trends to fall into line with IBM’s roadmap and marketing strategies, but there are interesting insights in his observations.

Power7 and Managed Services

On the topic of Power7 server impacts, Staszak notes the more powerful Power7 boxes have led to a predictable circumstance that involves shops moving to smaller boxes and still getting gains in I/O. Staszak’s example is a company that was running on a 570 upgrading to a 740 rather than a 770 or even a 750. Not a big surprise, since this fits pretty much with what observers said would happen when the Power7 lineup was introduced three years ago and then refreshed with Power7+ chips late last year and early this year.

At the entry level, Sirius is not selling many 710 boxes, the price leader of the Power Systems lineup that compares favorably to the high-volume X86 breed. Few expected this I/O-limited server to make an impact among i shops, but it is not establishing a reputation among AIX users, either. Is this a product that is wrong for the market or is Sirius not in touch with the market for this product?

The pricing and flexibility of the Power 720, 730, and 740 machines (with either Power7 or Power7+ processors) make them better choices, Staszak points out while also noting at least 75 percent of Sirius’ enterprise-level IBM i customers have stepped up to Power7 or Power7+ chips. The appetite of the enterprise is a good sign, and that leaves the SMB customers to keep the momentum going between now and the end of the year, which–if it happens–will keep Staszak’s prediction of 2013 being “one of the best years in a while” right on the money.

When I mentioned that the Power 720 may be a bit more box than many small companies really need and the Power 710 was supposed to fill that entry-level slot, the reply was that even when the Power7 boxes are underutilized–meaning less than the 80 percent to 90 percent utilization that is common–the price/performance is in line with most customers’ expectations and satisfaction levels. And for those who don’t find satisfaction with the price/performance ratio, Sirius has a contingency plan. This is where the managed service provider card gets played. Sirius will rent a box, or a portion of a box, and Sirius manages and administers the resources. Payments are on a subscription basis. More on the Sirius managed services can be found in the IT Jungle article IBM i Cloud Watch that was published in March.

Staszak makes two confident predictions: that IBM i shops are more likely to consider managed services now compared to just a few years ago and the interest in managed services will continue to grow. IT managers are looking at cloud for at least a portion of their environments, he says. It’s true that disaster recovery and high availability are both gathering more interest, whether delivered on-premise or in the cloud. DR and HA as managed services have been the most successful of the cloud options in the IBM i community. And it may be that what we are seeing in that realm will prove to be a testing ground for companies that in a year or two–as their comfort level increases–might be willing to expand the managed services menu.

PureFlex Opportunities

The next stop for the Sirius Power Systems tour bus is the home of PureFlex systems.

A PureFlex system combines server, storage, networking, virtualization, and management into a single infrastructure. It’s the next step in system convergence, with the capability to run X86 and Power Systems workloads in management framework. The concept is very familiar to IBM i advocates, except for effectively bringing AIX, Windows, and Linux into the same system. Such an approach has been tried with anywhere from no success to limited success in the past by IBM with slightly different strategies.

“We recently had a couple clients move their i environments to PureFlex nodes,” Staszak says. “The unified chassis approach is a game-changer. Companies like the datacenter in a box idea of a simplified environment for server, storage, networking bundled together,” he says.

A couple of IBM i clients on PureFlex almost equals the number of clients that chose to try Power-based BladeCenter machines. Sirius has more than 1,000 Power Systems shops as customers. Those that bought into IBM’s blades could be counted on one hand, Staszak says.

“We had X86 clients running on blades, but few Power clients would consider it,” he recalls. “Now converged technology is becoming more acceptable. Even the i clients that were conservative and cautious are shifting their view.”

Staszak estimates the interest level in the Power Systems shops for PureFlex to be about 5 to 10 percent.

The Virtual I/O Server was the bird in the punchbowl when IBM i shops took a close look at Power-based blades. You’ll look a long time to find an IBM i advocate who thought the VIOS was anything but the work of the devil. Now, VIOS is greatly improved and there is native connectivity to many IBM peripherals using the IBM i operating system. The Flex System Manager is lauded as a much better management console than the tools that came with BladeCenter iron, too. Staszak believes it will result in shops being more receptive to Flex than blades. They really couldn’t be any less receptive. BladeCenter was never a good fit for IBM i environments, primarily because it was built to X86 standards.

I think that if the widespread adoption of PureFlex in IBM i shops depends on it first proving itself in AIX and X86 environments, we could be in for a long wait. It’s already proved that system management that takes a step backward will not sell. On the other hand, companies are taking a look at what they can do to eliminate costs and converged platforms are a major target.

Looking to eliminate duplicated efforts and the cost inefficiencies they represent is a good idea, but the perception that new technology automatically results in cost savings is incorrect. You can’t even honestly say that in “the majority of cases” these or other technologies will save money. There are many factors to consider and it always comes down to individual cases and doing the homework. And cost is not the only consideration. Cost savings could be true and is very likely to be true in some cases, but it depends on the situation and every situation is different.

Evolution Expectations in Storage

It’s a similar story in storage, another area where Staszak sees opportunities in the form of external storage and solid state disk. Once again, he estimates the current interest level in these technologies to be at 5 percent to 10 percent of the IBM i shops. This case is a little different, however, because that is the percent of the companies implementing these technologies rather than just showing interest in them.

“We are definitely seeing a bigger percentage adopting these technologies,” he says. “And I think the growth will continue.”

Clients are looking for the heterogeneous storage environments that external storage provides and that demand for greater integration is a future direction that will come to pass. It’s the same integrated systems business strategy that’s behind the PureFlex system.

SSD is one of the “game changers,” Staszak says. The price will continue to decrease and when spinning disk technology that is in service now comes to its end of life in three to four years, he thinks SSD will be the replacement.

“During the past 10 years, spinning disk performance has increased about 20 percent,” he says. “Processors and memory technology have far outpaced that. SSD is like a 300,000 RPM drive. SSD is still a relatively expensive option. But when you could replace 100 spinning disk drives with a dozen solid state drives, it looks pretty attractive.”

The View

Much of the optimism for Power Systems running IBM i comes from satisfying a narrow segment of the user base–those that represent the 5 to 10 percent. That’s pretty much the way it’s always been. Once that inroad is developed, and the results are positive and the risks are minimal, the hefty part of the installed base will begin to follow. The process is often attributed to an ultra conservative AS/400 mentality, but it could also be described as doing the due diligence. IBM i shops do their due diligence when it comes to new technology. Just because IBM promotes a technology, builds products, and claims it to be better than 30-year-old single-malt Scotch, that doesn’t really faze them.