IBM reported its figures for the second quarter of 2014 in July and, once again, revenue from Power Systems was down.
Its Systems and Technology division’s $3.3bn takings fell 11% year over year. Revenue from Power Systems fell 28%. In the previous couple of quarters, Power Systems revenues were down 22% and 31%.
Such numbers seem a far cry from the days when IBM’s AIX-flavoured Power p was the undisputed champ of the Unix server wars. In the third quarter of 2011, for example, IDC estimated that global AIX-driven revenues were up 18% on the year at $1.342 billion and that Power i revenues for the same period had increased by a whopping 47% to $83 million.
There’s little doubt that the drying up of the Chinese market has been the cause of a torrid twelve months. Whatever their rights and wrongs, NSA whistleblower Edward Snowden’s revelations severely damaged U.S. hardware firms’ reputations in the world’s second biggest economy.
IBM even issued a statement in March that denied any involvement with the NSA or its PRISM surveillance operation and staked its claim as a defender of privacy. In the meantime, Chinese competitor Inspur has zoomed to the number five spot in the global server market, according to the latest figures from Gartner.
Despite all this, recent IBM case studies reveal that its AIX business is very much alive and kicking.
Take India’s CHD Developers, a big property developer based in Delhi on a steep growth path. After looking at 25 different options, it replaced its HP hardware with a PureFlex System populated with Power 260 nodes to run SAP on AIX. With V7000 Storage and a Tivoli-managed TS3100 tape library, that’s a pretty good sale.
Or Sto, a German supplier of specialist paints and materials to the construction industry with a billion euro annual revenue stream. Another SAP user, it migrated from its existing setup to four Power 750s running AIX and connected them to two big System Storage DS8870 disk systems, each with SSDs and Storwize V7000 units.
How about the, sadly unnamed, electronics corporation, again in Germany, with more than 200,000 employees? Running Oracle E-Business Suite over a creaky patchwork of servers and locations, it evaluated three options including an x86-based grid.
In the end, it migrated 13 Oracle databases/apps to two Power 770s running AIX using six LPARs on each machine.
I doubt that anyone involved in these three deals lost money on them, least of all IBM. Yet Big Blue’s Systems and Technology division has been described as loss-making by the financial press.
Chinese troubles notwithstanding, maybe the Power p is nearing state of market maturation that we see with Power i and Power z anyway. Here, the natural rhythms of the upgrade cycle mean big swings up and down per quarter are so normal as to be unremarkable.
And, just perhaps, promoting the cannibalisation of the global server base in order to gobble it all up into the cloud doesn’t really help hardware sales in general. With new Power System hardware about to hit the streets, only time will tell.
There is one caveat to all this. When IBM reports its Power Systems figures, it does so as a whole. The vast majority of Power sales are of the p variety, so we have little idea of how IBM i-based machines have fared while the wider brand has struggled.
For all we know, Power i may have snuck in a couple of stellar quarters while Power p’s star lost its lustre. Put it this way, if you were a seasoned cyber warrior on either side of the Sino-American divide, where would you want to keep your deepest and darkest secret data?