IBM System i hangs on in NZ e-govt

But it is the Commission's long-term goal to replace the server with an x86 system

A plan to replace IBM’s System i server as the platform for e-government has been put on ice — for now.

The State Services Commission, which drives the public sector e-government strategy, went to tender last September, looking for a new server platform to support its online applications. At the time, the lead state-sector agency said it was looking for a more flexible and extensible environment that was also cheaper to own, and more efficient to manage.

The SSC is using an IBM i810 System i server to power its e-government systems, which run on both Linux and Windows operating systems. In its tender documents it said non-x86 systems “inhibit flexibility and, from experience managing a mix of Linux and Windows-based OSs, introduce unwanted complexity and overheads.”

At the time, IBM intended to bid for the replacement contract with its own x86-based server range.

However, SSC spokesman Jason Ryan told Computerworld last week that the plans were now on hold, after discussions with IBM.

“We explored the options with IBM and realised one option was to buy the iSeries at the end of its lease,” he says. Following that course, he says, would allow a further 12 to 18 months of use, during which time the cost of replacement and related activities could come down.

Ryan says it is still the Commission’s long-term goal to replace the server with an x86 system.

A recent Gartner report shows that IBM edged Hewlett-Packard into second place in first-quarter 2007 server revenue, with both companies relying on a rebound in sales of x86-based computers. The report shows that IBM’s System i was the only server platform to experience a decline in sales.

New Zealand System i manager Dale Wheeler says the platform has a clear development roadmap, with a new P6 processor upgrade scheduled shortly. He says sales figures are extremely cyclical. Revenue from System i did decline last year in the US, but is up again this year, and sales are also growing in New Zealand, he says.

IBM has also moved to user-based pricing, which, Wheeler says, takes the platform into x86 territory in terms of cost.

“We are expecting growth across the whole market,” he says.

He adds that the SSC is using older-generation Intel cards inside its existing i810 and using 32-bit Linux rather than the 64-bit Linux the platform supports natively.

Wheeler says in-built virtualisation in the chip is seeing System i becoming part of the drive towards platform consolidation.

X86 server sales were sluggish in the fourth quarter 2006 as a result of buyers using efficient virtualisation technology to slow their buying cycles in anticipation of the arrival of quad-core processors, according to Gartner. That trend ended in the first three months of 2007, as global server revenue increased 4.5% compared with the same period last year, reaching US$12.9 billion (NZ$17.7 billion).

The number of servers shipped by all vendors actually rose faster than revenue — up 6%, to 2.1 million units. But intense competition in the market for RISC and Itanium-based servers forced prices down, Gartner analyst Jeffrey Hewitt says in the report.

The number of RISC and Itanium Unix servers shipped fell 15.5% compared with the same quarter last year, cutting revenue by 1.5% for that market segment. In comparison, the x86 market was more healthy, increasing 7.3% for shipments and 6.5% for revenue.

IBM did the best job of all when it came to protecting its turf in what proved to be a changing market, holding on to 29.8% of the server-revenue market share — beating HP’s 28.2% share. Lagging behind, with less than half those figures, were Dell, Sun Microsystems and Fujitsu Siemens. IBM’s success was a feature of nearly its entire line, with increased sales for its System p, System x and System z group, and a decline only in its System i group.

— Additional reporting by Ben Ames

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