Preparing a beach-head

Can IBM's Unix server business mount a credible assault on market leader Sun Microsystems? IBM thinks so; it has aggressive plans to go after Sun's strongholds of telecom and BFSI while strengthening its hold on the BFSI, telecom and manufacturing verticals.

Last August, IBM launched its third generation of Unix servers (eServer pSeries) based on the Power5 processor. At that time, the company expected that the p5 will help boost its Unix server ranking from the number three slot. That happened and IBM is now the runner up in Unix servers with a marketshare of 29%in Q404, dislodging HP from that position. Interestingly, IBM's Unix share grew faster than the overall market (25%year-on-year vis-'-vis 22.4 for the market) (Source: IDC India).

By IBM's own admission, just three years ago (2002), its share in the Unix server market wasn't anything to write home about. Then, Big Blue had 14%marketshare as per IDC. The turnaround began in 2001 when the company released its Power4 line and began chipping away at its rivals' ownership. However, the success was not visible until the p5 launch in mid-2004.

Where IBM is hitting the numbers?

IBM has gained ground in the Unix server market. For the first time, it has made a dent where it matters the most-BFSI, telecom and manufacturing. Q304 and beyond, IBM has signed mega-deals with HDFC Bank for running their core banking (Flexcube) and cash management (Cash Tech's CashIn) applications. Then there are other deals such as the ones with Yes Bank and C-DAC. It has also signed up Hutch in the telecom space to run Oracle CRM on the p5. Department of Company Affairs (a central government project) also picked IBM p5 systems.

These deals define IBM's ongoing strategy in the Unix server market. According to Jyothi Satyanathan, Country Manager, eServer - pSeries, IBM India, "All deals closed in Q1 2005 were based on p5 systems. This includes University of Hyderabad, which is using p690 (p5 processors) to support its research activities in life sciences. Then there are two repeat orders from HDFC and Hutch." He adds that IBM's Unix strategy revolves around its p5 strategy-a credible power processor and a powerful systems & technology solution for the Unix server market.

More bang per buck

IBM has clenched deals amid tight competition from Sun and HP. Satyanathan says, "We have eaten into HP and Sun's marketshare."

B Chandramouli, Chief Operating Officer, Yes Bank, says, "We saved costs in licencing Oracle by using IBM p5 servers." The bank evaluated p5-powered models-p520 and p550-against comparable servers from other vendors, and found that the TCO for IBM servers was lower. As software licences are mostly on a per CPU basis, the cost of software worked out lower in IBM's case, as a 'single' p5 CPU offers close to double the throughput of its competitors.

He adds, "Given our aggressive growth plans, these boxes can ensure scalability as we need to populate lesser CPUs at the moment. We can add more CPUs as our business grows. In case of competitive offerings, we might have been forced to add another server box instead of incremental CPUs which would have increased maintenance costs (typically calculated on a per server basis) and data centre hosting cost (per rack)." Yes Bank is running all of its core systems-including Flexcube from i-flex, Cash Management from CashTech and Treasury & Risk Management Solution from Murex-on p5-based systems.

Chandramouli makes an interesting observation vis-'-vis Big Blue's Capacity on Demand (CoD) technology when he says, "These servers offer CoD, but as application software vendors do not support this feature, we are not able to use it. CoD will make sense if application software vendors start offering application on demand with clear pricing details."

Swiss army knife of virtualisation

IBM's p5 offers server and application virtualisation through its Virtualisation Engine. HDFC Bank's expanding operations, and corporate banking (Flexcube) and cash management systems required additional infrastructure support. The bank wanted a solution that could meet its growth objective, offer better manageability, handle peak workloads and significantly improve performance. While HDFC Bank was looking at an approach of deploying several mid-range servers, IBM suggested server consolidation using p5 systems. IBM proposed using three p5-570 servers-two at the primary site and one at the disaster recovery site. Database consolidation over highly available servers with separate partitions was undertaken. Additionally redundant solutions offering automatic failover in case of a system crash and configured to support both Oracle RAC and non-RAC environments were put in place.

Says C N Ram, Head-IT, HDFC Bank, "Our key needs were flexibility and scalability of IT infrastructure. IBM's value proposition in terms of server consolidation and micro-partitioning technology was very attractive. This IT infrastructure backbone supported our current growth objectives, and was geared to meet growth challenges of the future. After the successful implementation by IBM, we look forward to significant performance enhancements of our corporate banking and cash management systems." Surya Prasad, VP IT, HDFC Bank, adds, "Partnering with IBM to migrate our core banking onto a new infrastructure was a big step for us-we are happy that IBM has ensured a smooth transition, and today, more than 3,000 users access the databases powered by p5 servers."