Roping The Wind: Power7+ In The Texas SMB

December 2, 2013 Dan Burger

The last time I checked in with Doug Fulmer it was March and the IBM Power7+ machines were just getting into the market. Interest in the Power7+ boxes wasn’t exactly lighting any fires in the small to midsize market down in Texas, where Fulmer works for the value-added reseller (VAR) KS2 Technologies, and Fulmer wasn’t inclined to think that Power7+ was going to be a game changer. But then the wind started to pick up.

In the past nine months, there has been a bit of a sales spurt for the small VAR that specializes in helping small IBM i shops. Selling 18 Power7+ machines in that time frame is like a long steady rain that ends a drought. Four of the deals were for 740s and the rest are 720s. There are four additional sales on the books for December and January.

Last spring, Fulmer downplayed the potential for Power7+ machines, saying the entry-level Power7 servers were already more powerful than many small IBM i shops could use. At that time, he said, “To a customer, Power7+ doesn’t make any difference. Power7 was already overkill. IBM gets more excited about Power7+ than customers do.”

He still sings the same song, but it’s a happier tune.

“Most of the customers we are talking to don’t need all the power the new box is giving them. Some customers are making good use of the power even though they don’t think they need it. Now the backup runs in 20 minutes instead of two hours and the batch job that does the big MRP update runs in 45 minutes instead of five hours,” Fulmer says. “A lot of them want to stay reasonably current on the hardware and software. They have come to end of lease and it’s time to get whatever the new machine is.”

To put a gauge on the size of the companies KS2 is working with, consider that some of the new Power7+ boxes are fitted with 32 GB of memory. More often the install includes 64 GB or 128 GB of memory, and that typically doubles or quadruples the memory of their retired boxes. Companies are also getting more disk with more arms over the data compared to their previous machines.

As KS2 connects with companies and upgrades systems, Fulmer says the majority of shops are moving from V5R4 to 7.1. For the most part, there have not been problems. The most common issue that Fulmer sees is one we’ve heard about for a long time. Software vendors that penalize companies that have gone off maintenance and are running no longer supported software. It’s not a frequent occurrence. Fulmer says many software companies have minimal upgrade charges or no upgrade charges.

“A few hardware sales were stopped because we have some customers running JD Edwards World who dropped maintenance three years ago because it was too expensive,” Fulmer says. “Now they can’t get to Power7 because the version of World they are running is not supported on 7.1. Two customers in that situation bought used boxes as a solution to the problem. The Oracle people have not been accommodating to companies on World because they want them to go to JDE EnterpriseOne with Exadata boxes. Customers that want to stay on IBM are not helped out as much as customers that go with the Oracle-preferred option.”

The IBM i shops running JD Edwards are often cited for being between a rock and a hard place, but other organizations face similar situations when they buck the directions chosen by software companies. The Oracle JD Edwards example gets a lot of attention because those IBM i customers couldn’t anticipate JD Edwards being purchased by an IBM competitor. But in any of these cases, regardless of platform or software vendor, when a company is willing to make additional investments in software licenses it will usually get better treatment from the vendor than a company that spends a little and hangs on to out of support software and rejects vendor maintenance contracts.

Interest in disaster recovery has had an impact in the number of boxes sold. Disaster recovery has become more important to more companies and the cost is not the obstacle it once was.

When the Power i Capacity BackUp systems were introduced, Fulmer notes, they were about 18 percent less on the hardware price compared to a production machine. Over the years, the price has been lowered and the discounts don’t apply. But compared to a production machine, the cost benefits are substantial. For instance, software licenses can be rolled over at no charge and only one IBM i operating system license is required. For a P05 machine, Fulmer estimated the OS license costs $2,200. And on a P10, the OS license is about $15,000.

Most of the companies are locating the CBU box in a second company-owned facility at least five miles from the production box. Some of them are putting the CBU in a server co-location facility in the Dallas area owned and operated by KS2. Fulmer said at least one customer is moving its production box to the co-lo and will locating the backup on premise because they get better security in the co-lo than they have on premise.

“The thing most companies look at is the three-year warranty,” Fulmer says. “They look at the cost of paying three more years of hardware and software maintenance (SWMA) fees compared to a new machine where the hardware maintenance is free and the SWMA is free for first 12 months. In many cases that’s almost enough to pay for the new machine.”

It would be interesting to know how many small IBM i shops have yet to get that message. Most people who are active in the IBM i community would agree there are a lot of companies still running on Power5 or Power6 machines and V5R4 or older versions of the operating system. This is not unique to IBM i. Across all platforms, there are customer segments that prefer to operate at a pace that is slower than the cycle dictated by the technology vendors. Those shops don’t hear much from IBM or the resellers because, for the most part, there’s not enough money to be made compared to the time it takes to keep in touch. So they fall through the cracks unless there are companies like KS2 that go into that field and turn over the rocks.

“The only people who won’t listen to the message are those that have no love for technology,” Fulmer says. “We have customers that are still running V5R2 and V5R3 on iSeries 810s. They are OK with that. It still runs. We stay in touch with them. Someday they will move to the new models.”