In the final days of July, IBM unveiled faster POWER5+ processor-based systems that will keep the company's servers competitive with those of its rivals. It also made sweeping changes to how it will price its software. Taken together, the announcements will affect nearly all of IBM's customers, including System i users.
Over the last two years, IBM's POWER5 servers have enjoyed a solid performance advantage over other 64-bit systems running on Intel's Itanium, Sun Microsystems' UltraSPARC, and AMD's Opteron processors. In recent months, however, the competition has been trying to catch up with the leader. On July 18, for instance, Intel debuted its new "Montecito" generation of dual-core Itanium 2 processors running at speeds of up to 1.6GHz. These processors will be making their way into Hewlett-Packard's Integrity Superdome servers as well as other high-end systems.
One week after Intel's announcement, IBM struck back by announcing that it is putting faster POWER5+ processors, running at up to 2.3GHz, into many of its System p models. The fastest chips will be shipping on the System p Models 590 and 595, two servers that had previously been restricted to slower POWER5 engines. By putting dual-core POWER5+ processors running at 2.3GHz into the 32-way Model 595, IBM was able to boost the system's performance by around 25%. The same configuration set a new world record of 4,016,222 transactions per minute on the TPC-C benchmark at a cost per transaction that was around 40% less than that of the previous Model 595 and the 64-way HP Integrity.
In addition, faster POWER5+ chips are making their way into most of IBM's entry-level and midrange System p models. These systems are getting single- and dual-core POWER5+ processors running at 1.9GHz and 2.1GHz. Most models are also getting quad-core chips running at 1.65GHz. The quad-core configurations—which are Express Edition models—provide the best price/performance in their product classes. IBM uses the quad-cores to compete with Intel servers on cost rather than raw horsepower.
Taking Pages from the System i Playbook
Interestingly, the latest System p announcements contained elements that made this analyst think he was reading about the System i. For instance, IBM stated that when it replaces the current systems with new ones based on POWER6 processors, it will offer "in the box" POWER6 upgrades to owners of the System p Models 570, 590, and 595. While IBM has always offered upgrades to System i customers, it has never done so for System p users.
In addition, the System p team announced the first Solution Editions that are preconfigured to run applications from IBM and other vendors. These include offerings from Oracle, SAP, SAS, and Sybase. While the System i portfolio has long included Solution Editions that are preconfigured for other applications, this is the first time that the System p has been packaged in the same way. IBM also positioned the System p models as server consolidation platforms in much the same way that it positions the System i for the same task. The company announced a new offering, the Server Consolidation Factory for System p, that provides all of the assessments, services, and expertise needed to consolidate workloads on the server.
A New Approach to Software Pricing
On the same day that it unveiled faster System p models, IBM announced a new software pricing policy that it will gradually implement across most of its product lines. The policy will base the cost of each software product on the performance of the processor cores that it runs on instead of the number of cores that are running it. The policy is IBM's response to the proliferation of multiple-core processors that differ widely in their performance characteristics.
At the heart of the new system is the Processor Value Unit (PVU), IBM's way of measuring the performance of processor cores. The company will assign PVU ratings to cores on all popular processors and then charge for its software based on the number of PVUs it consumes. Initially, IBM will assign a PVU rating of 100 to all cores on its single- and dual-core POWER5 chips as well as cores on HP PA-RISC, Intel Itanium, and Sun UltraSPARC IV processors. It will assign a PVU of 50 per core to quad-core POWER5 chips and to cores on multi-core AMD Opteron and Intel Xeon processors. By the way, all single-core processors will have a PVU of 100.
As these ratings indicate, IBM is not trying to assign precise performance ratings at this time to any processor cores. It is just trying to factor core performance into the way it calculates license fees. The system ensures that customers pay the same for a product that consumes 100 PVUs of capacity whether it is using a single core of a POWER5 processor, two cores of an AMD Opteron, or a single-core Itanium chip. The system also allows for more granular software pricing, as customers can license a product for a single core instead of an entire processor.
Speaking of licenses, the PVU system will not affect licenses for existing software on current servers. It will be applied only when customers purchase new licenses or move existing licenses to new servers.
Got Questions?
Given the fact that System i professionals have keen and inquiring minds, I have no doubt that many of you are asking dozens of questions at this moment. Sadly, I only have enough time to answer a few of them, but I'll do the best that I can. Could you raise your hands? All right...I'll take you in the back row. Please speak up!
Q: "What System i software is covered by the PVU system, and how will that system affect prices?"
A: Good question! For now, PVU pricing will apply to only a handful of System i products. These include Content Manager On Demand, DB2 Connect Unlimited Edition for iSeries, and a handful of Express products, such as WebSphere Business Integration Express. However, sources inside IBM tell me that PVU pricing could gradually extend to more products. Right now, around 350 products have PVU pricing (click here to see a list). I would expect that list to be considerably bigger by the end of this year.
As for how the PVU system will affect pricing, it will probably have a minimal impact on how much or how little you pay for new System i software licenses. What it will do, however, is give you the ability to pay for as little as one processor core's worth of capacity. Such "per core" pricing will likely replace the less-granular subcapacity licensing plans that IBM offers for some of its middleware products running on System i logical partitions.
Q: Will IBM announce System i5 models with the same POWER5+ processors that it is shipping on the System p?
A: I can give you a definite "no" on that one. IBM has already refreshed the System i5 Models 520 through 570 with POWER5+ processors and will not refresh them again. It has no plans to put POWER5+ chips in the Model 595. The next boost in performance will take place in 2007 when IBM ships new System i models based on POWER6 processors.
Q: Since the System i can run the same software as the System p, will IBM offer the new System p Solution Editions on the System i as well? And what about the Server Consolidation Factory for System p? Can we use that service for consolidations on System i?
A: Hold on...one question at a time! Even though the System i can run the same applications as the System p, the two servers still cater to different audiences with different product needs. That said, it is likely that the System i team will examine the new System p Solution Editions, decide if any of them would be popular among System i users, and consider creating their own versions of those packages. As for System i customers using the Server Consolidation Factory, you should know that the offering is not designed for consolidating OS/400 (or i5/OS) workloads. However, IBM may consider creating a similar consolidation service for System i users. I would heartily encourage them to do so, as I think it would be a popular and profitable offering.
That's it for this week, as I have already taken up more of your time than I usually do. Rest assured, though, that I'll keep you abreast of how IBM's latest announcements—and particularly the Processor Value Unit price policy—play out on the System i.
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at
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