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§ September 24th, 2009 § Filed under IT Strategies Comments Off
I just completed some consulting work for my former employer, Novell, and had the opportunity to work once again with Sal Darji and Ed Murphy. During the course of this work, I again ran into something that has long baffled me. Why is anyone buying proprietary Unix servers anymore?
To see why I say this, perform a simple comparison for yourself. Take the SPEC server CPU benchmark for a proprietary Unix server from Sun, IBM or HP, and divide it by the list price for the server. Do the same for a commodity Dell x86/64 server. Compare.
In my analyses, I use SPEC’s SPECint_rate2006 benchmark. It measures integer processing, which is more typical of business workloads. Also, this benchmark measures throughput rather than peak speed, since most datacenters are more concerned with the number of transactions processed, not minimizing the time for a single transaction. (The peak speed benchmark, SPECint2006, would be more appropriate for realtime computing.)
The value of the SPECint_rate2006 benchmark for a given server represents its capacity. We can treat SPECint_rate2006 as a unit of capacity, and when we purchase a given server, we are adding capacity to our datacenter equal to the SPECint_rate2006 benchmark for that server. Given this, the cost per SPECint_rate2006 is the amount we’re paying for each unit of additional capacity.
I realize that this analysis only holds true if all we really care about is throughput, and integer processing. Every workload is different, and the results may be different if the characteristics of a particular workload differ significantly from this approximation of a typical workload. But still, the results are startling.
Based on publicly available list prices, Solaris servers range from $300/SPECint_rate2006 to over $1,000. In comparison, Dell x86/64 servers range from $30/SPECint_rate2006 to no higher than $170. At the low end, this is an order of magnitude difference in cost/performance! And it’s not just Dell — IBM, HP and Sun x86 servers have significant cost/performance advantages over their own Unix servers (although not as large).
This cost advantage could get eaten up by operating system licensing costs. If Windows were the only alternative on x86 architectures, that would certainly be true. But not only is Linux cheaper than Windows, it is typically as cheap or cheaper than the license costs of the various Unixes.
At the high end, Unix servers are much larger than the largest available x86 servers. But the Unix world is moving towards virtualization, with single servers running multiple workloads. In this scenario, there is no advantage to a scale-up architecture vs. a scale-out architecture. Besides which, with quad-core x86 chips and ever more processors available on high-end x86 servers, the gap is steadily shrinking. I can see that occasionally x86 servers may not be able to meet the HPC needs of a particular app, but this would have to be the rare exception rather than the rule.
I have heard anecdotally of significant discounts off list for Unix servers, much more so than for Dell servers, and it’s easy to see why. Perhaps the Unix vendors are able to discount low enough when they have to so that the switching cost eats up any initial cost savings. And of course application and middleware software compatibility can be an issue, but these days almost any vendor offering software for Unix also supports one distribution or another of Linux.
So I remain baffled. Given these economics, for the vast majority of workloads, why would anyone stick with Unix? I realize the market has been steadily moving away from Unix and towards Linux and Windows, but plenty of shops are still buying new Unix servers for brand new applications. Why?
I am entirely open to the idea that I’ve overlooked something, so if anyone has any thoughts about additional factors to consider please leave them in comments. But until proven otherwise, my recommendation to any datacenter is to avoid Unix except for the rare exception, and move to Linux on x86/64 instead.
§ October 31st, 2008 § Filed under IT Strategies Comments Off
I have been doing some contract work this month with old friends and colleagues now at Telogis. The Novell and Cambridge connections are legion — Dave Cozzens, my old boss and manager of the Cambridge Digital Business Strategy practice is now Telogis CEO, and many former colleagues are either working there or contracting. Even Jack Messman, the former Cambridge and then Novell CEO is on Telogis’ Board.
Just like homecoming for me.
Telogis has a fleet tracking SaaS application, OnTrack. I’ve known about fleet management and tracking systems going back to the old satellite days and before, but I was surprised at how far things have come. Telogis’ technology reflects an accumulation of incremental changes, none of which is horribly earth-shattering by itself, but cumulatively is pretty interesting.
It turns out that heavy vehicles, like all consumer vehicles these days, have onboard computers, and there is an industry standard for querying those computers via a protocol called JBus. Telogis has onboard hardware with GPS and a wireless modem. Add a standard piece of hardware to query the vehicle computer and pass it to the Telogis hardware, and you can get close-to-real-time reporting of everything the onboard computer knows, plus GPS. Telogis can effectively re-create the vehicle dashboard, including not just speed and location, but things like battery voltage, oil pressure, engine temp, even whether the seatbelts are buckled and the doors are latched.
Fleet tracking started off as a way to monitor drivers, to make sure they weren’t parking somewhere for a nap or using the trucks for side jobs, and monitoring drivers is still part of the value. Now employers know if their drivers are speeding and what routes they are taking between destinations. But the value is expanding to monitoring the vehicles themselves — to knowing ahead of time when a vehicle needs maintenance, say because the fuel economy is declining or the engine is running hot. Add sophisticated routing algorithms for dispatch on top of this, and the vehicle, driver, customer and corporate office are all highly integrated.
I know this is all rather mundane, and familiar to anyone working in a company with field service or delivery operations. But it’s an example of what can be done with location-based computing and wireless networks. This is one of those things that has quietly advanced without much fanfare, and turns out to be rather nifty.
§ March 21st, 2008 § Filed under IT Strategies Comments Off
There’s the Suse gecko, the Mono monkey, the Higgins mouse, the Bandit dog, the Open Office seagull, and of course the Linux penguin.
Now there’s the fossa.
Novell has named our new architecture the Fossa Project because of the fossa’s renowned agility. (Ed Murphy, who has two younger children, informed me that the fossas are the bad guys in the movie Madagascar. Since my kids are older, I’ve never seen Madagascar, but I’m thinking they must be like the hyenas in The Lion King. Kinda takes all the fun out of our new mascot.)
The Fossa vision (Novell’s, not the animal’s) does a good job of bringing together Linux, virtualization, data center orchestration, identity (both for users, devices and apps) and collaboration. For Jeff Jaffe’s presentation on Fossa, go here (Real video). For documentation on Fossa, go here and click on the Presentations tab.
My employer, Novell, posted its earnings yesterday, resulting in a nice up-tick in our stock price. Press and commentary has been favorable for the most part, but I feel compelled to respond to Matt Asay’s two posts on our earnings.
Now, I am an employee of Novell, so to some extent my fortunes rise and fall with those of my employer (although there are always other options in a free labor market.) But I am not in PR, and I try to make my comments on this blog objective and fairly independent. I do self-censor along the lines of “if you can’t say something nice about your employer, don’t say anything at all”, but I’d like to believe I’m able to see all sides of Novell’s position relative to competitors, peers and partners.
But I’m afraid to say that Matt Asay, a one-time Novell employee, has lost the ability to view Novell through any lens other than his distaste of the Microsoft deal. Novell had a pretty nice quarter, with our stock up over 8% today as I write, but this is what Matt says regarding our Linux business:
The numbers are still relatively small ($21 million), but any progress is progress. Importantly, the word on the street is that Microsoft is not proving to be a great distribution partner (go figure!). This means that (gasp!) Novell is actually managing to sell its Linux value, not just making silly patent deals.
Sure, the patent deal between Microsoft and Novell was a deal winner at Wal-Mart Stores and undoubtedly a few others. But I would argue that Microsoft has done more harm than good to Novell’s Linux business. Why not cut it adrift?
Matt would argue that the MS deal has done more harm than good, but he doesn’t — he just asserts that this is the case, while linking to a nine-month old article. The actual evidence provides a different picture: as Matt himself quotes from Credit Suisse, $14M in Linux revenues were from the MS deal, while $24M were “organic”. “Word on the street” may be that Microsoft isn’t a good partner, but the quarterly results tell a different story altogether.
Matt excerpts Jason Maynard’s take on the earnings report, which says in part:
Although we acknowledge the improvements to the business, we continue to believe there are better relative investments within the group….we are maintaining our Underperform rating….
So CSFB has been pretty bearish on the stock, and they’re not willing to change their rating after one or two good quarters. Fair enough. Maynard makes various arguments for his view, some of which I think are valid, and some off-base. Of course Maynard is just one analyst, and others have been more bullish, but none of them make suggestions as far out as Matt does:
Now you just need to ditch the ballast that you call Systems and Resource Management and Identity and Security Management, and really grow…
Interesting…so Matt advises getting rid of almost $100M in quarterly revenue and about $35 in quarterly operating income, as well as divesting the customers that own SRM and ISM products but not Linux, because…why?
In most businesses, 2 percent and 4 percent increases are embarrassments.
Matt’s background in hi-tech start-ups is showing. Start-ups can’t survive without rapid growth, but the rest of the business world is hardly embarrassed by a slow growing but profitable business. While start-ups can’t worry about profits at the expense of growth, for the rest of us, profits are a good thing. Novell has a stated goal of growing these business more rapidly, which would be good, but in the meantime they’re not exactly a millstone around our neck.
I’ve heard analysts argue that Novell should shed everything but Linux so that it will have the same business model as Red Hat, a view Matt seems to be alluding to. Sure, Novell could remake itself to look just like Red Hat, but then Novell would throw away most of its revenue and income as well as any chance it has to differentiate itself from Red Hat. The world doesn’t need another Red Hat, and Novell doesn’t need a “me-too” strategy. It needs to find ways to deliver more value in ways that Red Hat can’t. One way to do this is with a broader, integrated product portfolio. I think the chances are better that Red Hat will look more like Novell down the road rather than the reverse.
Matt finishes with the comment “Novell needs a new trick”, by which I assume he means something besides our deal with Microsoft, even though only $14M of our Linux revenue was from Microsoft certificates, leaving $229M in revenue from other “tricks”. We’ve announced a string of partnership deals, an acquisition, and several new product releases in the last quarter, but Matt overlooks all of that due to his over-riding obsession with the MS deal. How many more tricks does he want?
Matt and other open source commentators should feel free to criticize Novell’s MS deal on its merits, or lack thereof. I think they are wrong, though, to view all of Novell through that single lens. They also are wrong to think that Novell, a complex multi-business unit company, must look like Red Hat to succeed.
None of us at Novell know how this wild ride is going to turn out. We may succeed fabulously, or we may crash and burn. Either way, I’d like to see a higher quality of kibbitzing from industry observers than Matt has displayed.
§ February 2nd, 2006 § Filed under IT Strategies Comments Off
Geoffrey Moore moderated a panel at the World Economic Forum in Davos on the future of the technology sector with Bill Gates, John Chambers, Eric Schmidt and Skype’s Niklas Zennstrom (podcast available here). Moore has boiled the panel discussion down to three explanatory principles to augment Moore’s Law:
- The core enabling resources of IT–computing, memory, bandwidth–are asymptotically apporaching zero [cost]. For scenario planning purposes, assume they are free. (This is where Moore’s Law continues to have its impact.)
- Expect the digitization of everything. Either digital format will substitute for a prior analog reality, as in media, or it will serve as a proxy for the underlying reality, be that a natural resource, a customer order in transit, or a physical meeting. This allows for the full repertoire of computing to be applied to value creating metamorphoses, whether it be enhancing sensory impact, improving consumer experience, detecting change triggers, or the like.
- Expect the value proposition of IT to migrate from enabling transactions to enabling interactions, whether it be in customer service applications, design collaborations, or self-calibrating sensor-enabled systems. This allows for iterative processes to have shorter and shorter cycle times, resulting in better understanding, faster time to market, more reliable operations, and the like.
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§ November 21st, 2005 § Filed under IT Strategies Comments Off
Nicholas Carr, author of the much-contested article “IT Doesn’t Matter“, has written a new, equally debatable article titled “The End of Corporate Computing“. In it, Carr shows the same blind spot demonstrated in his previous work by arguing that the corporate data center will be replaced entirely by utility computing providers delivering apps over the web.
Carr uses the analogy of the electric generating industry in the early 20th century. Companies initially were forced to run their own generating plant, but these were gradually replaced by centralized electric generating utilities. This centralization required the construction of the electric grid to distribute electricity, analogous to the internet of today.
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