Last year, IBM and HP ripped Sun's UNIX business to shreds. This year, IBM is hoping to give HP the same treatment. The UNIX market is shrinking, and IBM must be thinking there isn't enough room, or enough money, for both of them. It's dog eat dog in the UNIX market, and while HP is no poodle, IBM is a very large and aggressive mutt, indeed.
It's only a few weeks into 2010, but already things are beginning to heat up. IBM's announcement on Monday that it is launching four servers based on its spanking-new and ultra-powerful Power7 chip is the company's way of declaring to the world it has every intention of consolidating its position as top dog in the UNIX world.
HP is not ready to roll over and submit, though, and it is pinning its hopes of thriving in the UNIX market on a new weapon of its own: Integrity servers based on the latest Itanium 9300 series chip, also announced yesterday. (Of course the new Itanium is Intel's, not HP's, but HP's HP-UX systems account for the vast majority of Itanium usage. Other vendors, including Hitachi and Fujitsu, account for as little as 15 percent of Itanium sales.)
What about Solaris then? Thanks to the rather thorough kicking IBM and HP gave Sun last year, the operating system has been taken in by a new owner, Oracle, which has promised to invest "heavily" in both Solaris and Sun hardware to create systems optimized for Oracle applications. Although it's not clear exactly what that means, one thing is certain: Solaris isn't out of the picture completely.
All three companies are interested in the UNIX market because there's still money to be made in it: UNIX server spending totaled $2.8 billion in the recession-struck third quarter of 2009 according to IDC. But there's no getting around the fact that it's a market in steady, if not terminal, decline. UNIX accounted for 26.9 percent of server spending in third-quarter 2009, according to IDC. A sizable amount yet six months earlier that figure stood at more than 33 percent. There may be external factors at work here, but the fact remains that the three major UNIX vendors are about to launch new products into a market rapidly becoming too small to sustain all of them.
IBM knows what to do in this sort of situation. Last year it ran its successful SUN-SET special campaign to get Sun's UNIX users to switch to its own servers running AIX, and it's not shy about grabbing HP customers either: In 2009 it successfully persuaded 250 HP shops to switch to IBM Power systems, System x and System z servers, and storage solutions as part of its Migration Factory program. About 200 of these are believed to have moved to Power systems. "We want to position Power as the future of UNIX. HP and Sun haven't caught up to Power6, and we will trounce them with Power7," said Scott Handy, vice president of worldwide strategy and marketing for the Power Systems division at IBM. "HP-UX customers are going to be just as distraught in 2010 as Sun customers were in 2009."
In all, IBM claims to have pinched $600 million of UNIX business from competitors last year. IDC's figures show the company gained 5.1 percent UNIX market share in third-quarter 2009 year-over-year, giving IBM almost 40 percent of the total. The UNIX market may slowly be disappearing, but IBM realizes it can still grow its profits in it, if it can increase market share without slashing prices too much.
Last year Sun was the easy target; this year it's HP that should be watching its back very carefully.
Paul Rubens is a journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.