Last Tuesday, IBM took a step toward making its On Demand computing vision more of a reality for iSeries customers. The company announced Virtual Server Services (VSS) offerings that let customers tap into the capacity of IBM-hosted iSeries, pSeries, and xSeries servers for a monthly usage-based charge.
As its name implies, VSS provides customers with one or more logical partitions on servers that IBM hosts in its own data centers. Customers can use their partitions for practically any workload that can be managed on an off-site basis. In addition, customers can share individual workloads between their in-house systems and their VSS partitions, with IBM providing load balancing services between systems. This allows companies to rent excess capacity for peak seasons instead of purchasing the capacity and watching it sit idle for most of the year.
As this description of VSS indicates, IBM is targeting its new offerings at customers who want to turn fixed computing costs into variable costs and, in the process, reduce them. Of course, IBM has a history of offering managed hosting services that accomplish similar objectives. However, managed hosting differs from VSS in that the former service provides each customer with dedicated servers and significant latitude to negotiate the services that IBM will provide. By contrast, VSS provides partitions on a server that is shared between multiple customers and that comes with a more limited, standardized menu of services. In exchange for these limitations, however, customers can realize savings over traditional managed hosting services.
As a case in point, consider the case of one company that I learned about from Hallie Myers, the Director of Offerings Management and Development for IBM's Hosting Business. According to Myers, the unnamed company currently owns servers and applications that will cost about $1.8 million to support over the next three years. Under a managed hosting agreement, the company would outsource its operations to dedicated IBM servers and pay around $1.5 million over the same three-year period. With VSS, however, the company could share servers with other firms and pay only $1.1 million over three years. That is a fairly high savings level and one that I would not expect many companies to realize. However, IBM is claiming that with VSS, customers will have the potential to achieve savings of 15% to 30% over in-house deployments.
If these figures tantalize you, there are a few things you should know about VSS before you call IBM. At present, the iSeries version of VSS is running on a high-end iSeries located in Boulder, Colorado. Initially, IBM is supporting OS/400 V5R1 and V5R2 in the system's partitions. The computer giant is also considering whether to support Linux on the iSeries but has not yet committed itself to doing so. As customers sign on to the VSS program, IBM will bring additional iSeries servers into the hosting center to meet the demand.
Most VSS agreements will be multi-month contracts that include a one-time setup fee, monthly charges for the services that IBM provides, and a monthly usage charge that is based on the number of "CPU hours" (the number of processors times the number of hours used) the customer consumes. Customers will be able to select from a menu of basic and optional services that IBM will provide. The basic services will include tasks such as tracking and reporting on performance levels and utilization rates; optional services could include items such as application-specific monitoring or workload balancing between VSS and in-house servers.
According to Myers, VSS customers will be able to scale their usage rates up or down during their contract periods. As part of each contract, IBM will commit itself to providing up to 20% additional capacity over baseline usage levels to meet sudden demand peaks. Customers can also reduce their usage below baseline levels and pay lower usage charges. However, Myers did not say whether there will be limits to capacity downsizing under VSS agreements.
Since VSS also includes offerings on the pSeries, xSeries, and zSeries, many iSeries customers may want to explore the use of VSS for workloads running on other operating environments. The pSeries VSS offering supports workloads running on AIX 5L 5.1 and 5.2. The xSeries offering supports Windows Server 2000 (but not yet Windows Server 2003) and Linux running in virtual partitions under VMware. The zSeries offering, which IBM actually made available in the summer of 2002, provides Linux partitions.
While VSS could prove to be a popular offering among iSeries customers, it will probably take time for most companies to get over their concerns with the service before they try it out. Most businesses are cautious about letting their data off their premises, and doing so--not to mention sharing a server with other companies or even competitors--will raise big security concerns. However, VSS could find more immediate acceptance for e-business workloads that leave sensitive data back on the in-house servers. This is an area where many iSeries customers could value the management expertise that IBM brings to the table. It will be interesting to see how far and how fast the iSeries community goes in embracing VSS and similar "on demand" services that IBM and its competitors bring to the table.
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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