IBM Makes SMB Case for Power Series

Although it may seem like a distant memory, IBM is dusting off the AS/400 midrange computing strategy for the small- and midsize-business (SMB) market and applying it to its Power Systems servers that are based on proprietary IBM RISC processors.

While conventional wisdom holds that x86 servers reign supreme in the SMB space, IBM recently lowered the cost of entry-level Power series servers to match x86 server pricing. With that long-standing issue off the table, IBM contends that next-generation Power series servers have a much lower total cost of ownership (TCO) that should make them attractive to SMB customers.

“The price differential with x86 servers has gone away,” said Doug Brown, vice president of global marketing for Power and z Systems within the IBM Systems and Technology Group. “The Power series from an ownership cost perspective more than pays for itself.”

In particular, Brown contends that many of the automated management functions free up time for IT organizations that are already short-staffed.

For example, Westside Produce, a distributor based in Firebaugh, Calif., relies on Power series servers to run custom ERP and analytics applications. According to Justin Porter, director of technology for Westside Produce, what many IT people fail to appreciate about the Power series is how much less time they have to spend managing the applications that run on it.

“We shifted workloads from commodity servers because Power systems run them more effectively,” said Porter.

Similarly, Nigel Fortlage, vice president and CIO of GHY International, a provider of brokerage services based in Winnipeg, Canada, said running applications on Power series systems is not only cost-effective because they run Linux, it frees him up to take on a larger role in the business.

“Power systems get rid of the islands of computing,” said Fortlage. “The more islands we get rid of, the more time I have for business development.”

That reduced complexity also results in lower costs, he said, because the Power series comes with virtual machine software that eliminates the need to pay for VMware licenses that would be required on X86 servers.

IBM has been making a concerted push to expand the appeal of Power series servers beyond its base of traditional high-end customers, while at the same time advising partners they need to restructure their practices in the age of IT convergence.

With global IT spending by SMB organizations set to reach $600 billion by 2016, by IBM estimates, what’s now different about modern SMB organizations is that there is no longer any real relationship to the size of the company and the amount of money it might budget on IT. In fact, it’s not uncommon to see companies with a relatively small number of employees dedicate a significant portion of their overall budget to IT systems they depend on to deliver a particular service to their customers.

In addition, Roger Kay, founder and president of Endpoint Technologies Associates, an IT consulting firm, noted that IT organizations within SMB organizations know they are competing with larger companies that have significantly larger IT budgets. As a result, they need to find more efficient ways to develop competitive IT capabilities.

“Historically, there was a tendency for SMB organizations to hang back,” said Kay. “But at some point they now begin to realize they need to move along.”

IBM is looking to increase the appeal of Power series servers by highlighting the integration of the management of servers, storage and networking within next-generation Power series servers. The challenge from a solution provider perspective, of course, is going to be getting that message in front of customers that for several decades now have been conditioned to think of X86 servers as industry-standard servers, rather than simply yet another “Smarter Computing” option for running different classes of application workloads.