Big Blue is hoping that it can ride up the Linux wave and boost the volumes of its Power5 machines as it gets tougher to boost volumes in the RISC/Unix market.
IBM has offered Linux as an operating system option on its pSeries Power4 server line for more than a year, and has been offering Linux within logical partitions on its iSeries line for several years. The OpenPowers are a little bit different in that IBM is actually creating a machine that has an intentionally lower price and that will be restricted to running only Linux operating systems from Red Hat Inc. or Novell Inc. and applications compiled for Linux.
The reasons IBM has decided to launch a Linux-only Power server line (something we heard about as a possibility more than a year ago) are complex. First of all, now that rivals Sun Microsystems Inc. and Hewlett-Packard Co. have sorted out their Unix server strategies (at least compared to two years ago, where Sun was living in denial and HP was in the midst of explaining its consolidation strategy in the wake of the Compaq acquisition), it is harder to make a RISC/Unix deal solely based on the price of the hardware.
HP and Sun, especially now that the Integrity line has been fleshed out top to bottom and Sun has embraced the Opteron processors in its entry and midrange Sun Fire line, more or less have sensible platform plans and pricing in the Unix space. Unfortunately, now that Linux 2.4 is well accepted as good enough to do many Unix-style jobs, the Unix market is eyeing Lintel iron as a replacement for aging RISC/Unix iron.
The advent of Linux 2.6, which is more scalable, reliable, and usable (thanks in large measure to a better job scheduler and workload manager), only makes Linux an easier sell to Unix shops that gasp at the high prices Unix vendors charge for their RISC hardware and Unix operating systems.
According to Jim McGaughan, director of eServer strategy at IBM, the OpenPower line is starting with a 4U, Model 720 machine today that comes with single core, dual core, and quad core options. (The Power5 chip has two Power cores, and a Model 720 can have one or two Power5 chip modules, depending on the configuration). McGaughan says that IBM will deliver a 2U form factor Power5 machine early next year (probably with one- or two-core options).
If the market demands it, IBM could easily create a broader line of OpenPower machines that span from one Power5 core to as many as 64, which is what the future p5 590 server due any day now will offer IBM’s Unix customers. If IBM needed to create a low-powered Linux box, it could even slug the Power5 chips, activating only one core and clocking it at half or even quarter speed (as it does within the eServer i5 line), and delivering an even lower performance and price point into the Linux market.
On the other end of the spectrum, Linux 2.6 scales pretty well to 16-way SMP processing and Linux applications are probably not able to scale much beyond eight-way SMP, so an eight-way OpenPower box is probably the practical and necessary top-end limit for such a Linux-only server. Just as is the case for 32-bit and 64-bit X86 iron, by the way.
With the OpenPower machines, no matter how far up or down IBM scales them, Big Blue is trying to create a new hybrid RISC/Linux option that shoots the gap between Lintel iron and RISC/Unix iron, offering Unix performance with pricing that approaches that of the higher-volume Linux on X86 platforms. The chatter from our competition preceding this announcement has been quite high, says McGaughan. And the sweet spot in this market is for two-way servers. We know it, and they know it.
You might think IBM would have launched a two-way server first then, but getting the Power5 chips down to a 2U form factor is not an easy feat, and it will take a little time. The OpenPower line introduces some really interesting dynamics for the industry, and IBM knows now, unlike it might have a decade ago, that you get a one-time shot at these markets. That is why we are coming out with guns blazing.
As for self-impact, he says IBM is well aware that this is going to happen, that some customers who might have bought an AIX platform will now buy and OpenPower and choose Linux. He quoted the old adage in IT: if you don’t eat your own lunch, someone else will.
The OpenPower 720 comes in three variants. The base machine has a single 1.5GHz Power5 core activated, and it can only have one core activated even though technically the Power5 frame can support two chips and four cores. (IBM is probably making use of Power5 chips where half of the chip doesn’t work.) For $5,000, this base machine comes with 512MB of main memory, a single 36 GB disk (10K RPM), redundant power and cooling, and an enclosure for holding four SCSI disk drives.
The two-way OpenPower 720 box can use either 1.5GHz or 1.65GHz Power5 cores and comes with 1 GB of main memory and a 36 GB disk; with two 1.5GHz cores, this machine costs $8,000, and with two 1.65GHz cores, it costs $9,250. It costs another $5,500 to add another Power5 module with two 1.5GHz cores turned on and another $6,750 to add two 1.65GHz cores.
Perhaps most startling, IBM is charging a lot less money for the exact same main memory and disk drives in the OpenPower boxes as it charges for the i5 and p5 variants of the machines. Main memory costs from $640 for a 1GB DIMM (42% cheaper than on the i5 and p5) to $2,800 for a 4GB DIMM (21% cheaper). 10K RPM disk drives range in price from $275 for a 36GB disk to $699 for a 146GB disk. IBM is charging between 63% and 69% less for these disks than it does for i5 and p5 machines, and with 15K RPM disks, IBM has slashed the prices by 72% to 74%.
So how does this compare to the IBM eServer p5 machines? A two-way p5 Model 520 with 1.65GHz cores, 2GB of main memory, and a 36GB drive costs $10,800, compared to $9,760 for an OpenPower 720 with the same configuration. (These prices do not include an operating system.) Both of these machines come with standard logical partitioning (where the granularity only goes down to the core level), but OpenPower and p5 customers have to buy the advanced Virtualization Engine features – which offer micropartitioning of up to 10 partitions per CPU plus virtualized I/O and LAN support separately.
It costs a flat $2,000 on the OpenPower machines, and $590 per CPU on the p5 machines in this same four-way power class. An eServer p5 Model 550 with two 1.65GHz cores, 4GB of main memory, and two 73GB disks sells for $20,540, but a similarly configured OpenPower 720 will only have to pay $11,625 for the same iron. In a four-way configuration using 1.65GHz cores, a p5 550 with 8GB of memory and two 73GB disks costs $32,487, while the OpenPower 720 with the same specs costs $20,675.
IBM also has special discount deals with Red Hat and Novell to get commercial Linux on these machines (as well as on the i5 and p5) at lower prices than is available directly from these vendors. You can get SuSE Linux Enterprise Server 9 (which is the level supported on the Power5 boxes) through IBM for $689 for a system that has up to two processors, and for $1,299 for any system that spans from 1 to 16 processors.
Unlike Novell, Red Hat doesn’t charge per system (regardless of the number of partitions), but per Linux instance on a server within partitions, even if there is only one partition (meaning it is in effect an SMP server). Through IBM, you can get Red Hat Enterprise Linux AS 3 Update 3 (which is required on the Power5 machines) for $995 on a two-way machine or partition and for $1,295 on a partition or machine that spans up to an eight-way instance.
McGaughan says that IBM will launch its own electronic technical support service in conjunction with Red Hat and Novell, probably sometime in the fourth quarter, so IBM’s customers can get the same one-contact with Global Services for support for Linux as they get for OS/400 and AIX. (Red Hat and Novell are backing up theses offerings with Level 3 support, just as they do for similar HP services.)
By the way, there is some nonsense talk going around that the Power5-Linux boxes do not have any applications. The truth is, IBM has about 600 Linux applications available for Power-Linux, which compares decently to the 750 applications in the Red Hat-on-X86 portfolio or even the Itanium portfolio, which had about 400 applications spanning Windows, Linux, and Unix by the end of 2003.
McGaughan says that any PowerPC or Power4 Linux application can run on the Power5 machines with the exception of applications specifically compiled to take advantage of the VMX vector co-processor in the PowerPC 970 processors used in IBM’s BladeCenter blade servers. Any Power-Linux application that does not use these VMX functions will run even on the PowerPC 970.
What the OpenPower announcement makes clear is that i5 and p5 customers are being asked to subsidize IBM’s aggressive moves into the Linux space, much as OS/400 shops have subsidized IBM’s aggressive moves into the Unix market since 1997. The OpenPower announcement is great news for IBM’s potential Linux customers, but is maybe not so great for the midrange shops who are not getting such favorable pricing for their Power5 hardware. But IBM has to do something to pump up Linux on Power specifically and Power server volumes generally, and this is a good tactic even if it is not particularly fair (whatever on earth that might mean in the business world).
The fact is, in today’s server business, there are a number of different ways that server makers can differentiate their products. One way is to create a single server hardware platform that supports as many different operating system platforms as is technically feasible and economically practical. This is the method HP is using to champion its Integrity line of Itanium servers (which support Windows, Linux, Unix, and soon OpenVMS); similarly, IBM has used a multiple OS approach to prop up sales of its zSeries mainframes (which support a number of mainframe operating systems plus Linux and an AIX runtime environment) and its iSeries midrange gear (which have run OS/400 and Linux for years and which now support AIX with the eServer i5 machines launched in May).
The other approach to differentiation is the one that IBM has taken with the eServer line in a broader sense with the Squadron Power5 servers. IBM is creating versions of the Power5 frames that are based on exactly the same hardware, but differ from each other in operating system options, microcode and partitioning features, and pricing.
The eServer i5 Model 550, the eServer p5 550, and the OpenPower 720 are all based on the exact same hardware, but they are sold with very different options on top of that hardware with very different pricing. And you cannot upgrade from one box into another. You have to make your platform choice ahead of time, and live with it.
With the HP Integrity approach, you get an economic value (which is hard to quantify) in that you can run a number of different operating system platforms on the same box either at the same time or in a series over the course of the technical and economic life of that server. HP charges a pretty hefty premium for this multi-OS capability, which is the hallmark of its Integrity line, compared to what it charges for processing capacity on its ProLiant X86 server line.
With the IBM eServer approach, IBM has been selling the same essential hardware with prices that depend on how you use it. IBM used to discriminate against AS/400 and iSeries customers who were buying PowerPC or Power4 iron compared to the cheaper RS/6000 and pSeries iron based on exactly the same hardware. With the Power5 line, IBM has locked the i5 and p5 hardware prices, and is differentiating at the software level.
OS/400 has legacy green-screen application support and an integrated database, and IBM charges a very hefty premium for these capabilities, which it can do since it has a monopoly on machines that support RPG and COBOL applications that run atop of the DB2/400 database. With the Power5 launch this year, IBM has shifted all of the premium it used to charge for AS/400 and iSeries servers into the new i5/OS operating system.
Now, AIX has become a sort of legacy environment of its own (as has HP’s PA-RISC machines running AIX and Sun’s UltraSparc-III and UltraSparc-IV platforms running Solaris), and IBM is compelled to charge a premium for Power5 iron running even AIX – at least compared to that upstart, Linux.
Like Unix was the price/performance driver of the 1990s, Linux is shaping up to be the catalyst for the biggest bang for the buck in the 2000s.
