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Market Roundup August 25, 2006 IBM
Enhances Storage Portfolio Lenovo +
Cingular = Faster Wireless ThinkPads IBM Beefs Up
Security in Global Services A Bad Connexion? |
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IBM Enhances Storage Portfolio
This week IBM released details of enhancements covering a
huge swath of its storage platforms including enhanced disk solutions for
organizations ranging from SMBs to large enterprises, as well as a data
retention system and a new warranty offering for the IBM System Storage DS6000
series. Two new top-of-line models, the IBM System Storage DS8100 Turbo and
DS8300 Turbo, provide high performance and are among the first available with
4GBps FICON support. The platforms also offer tiered storage options within the
single system and three-site Business Continuity/Disaster Recovery solution
options. The new DS8000 Turbo line up carries a base system list price of
$213,400, 25% lower than for pervious comparable systems. IBM also announced
enhancements to the IBM System Storage DS6000 which will now support low-cost
Fibre Channel ATA (FATA) drives, tiered storage options, and TPC for
Replication. The DS6000 Series now has a one-year standard warranty and the
option for a new flexible Enterprise Choice option for warranty extensions,
allowing customers to choose a 24/7 warranty for an additional one year to
three years in one-year increments when ordered at the time of original
purchase. Entry list price for the DS6000 will be $102,600. The company also
announced new enterprise offerings and gateway solutions that are based on
NetApp technology with the IBM System Storage N7600 and N7800 platforms offering
support for Fibre Channel and SATA disk drives and provide simultaneous NAS,
iSCSI and 4Gbps FC SAN connectivity. The systems can scale to 504TB of physical
capacity and come with over thirty-five advanced software tools including the
new FlexShare and MetroCluster features. Two enterprise gateway models, the
N7600 and N7800 Gateways, utilize the same technology and include options to
attach to IBM, Hitachi, and HP storage subsystems. The N Series appliance
models will have an entry list price of $140,500 while the N Series Gateways
will quote a starting list price of $113,500. IBM also enhanced its DR 550 and
DR550 Express platforms to make use of a new storage controller (DS4700) and
storage expansion (EXP810) to provide greater flexibility, scalability, and
price-performance as well as offering a SCSI adapter for 3996 optical disk
system support.
It has long been said by computing professionals that
storage lacks glamour, and is in IT terms neither “sexy” nor exciting. However,
the last couple of years have seen the storage sector gain more visibility than
in the rest of its history and this week these releases mean that IBM has now
refreshed the vast majority of its disk line up as earlier this month the
company expanded its mid-range offerings, the IBM System Storage DS4000 line,
to provide increased capacity and overall performance while adding enhanced
data protection and duplication features.
The huge amount of work visible in the development of IBM’s
disk storage portfolio is impressive. It is readily apparent that the company
is working hard to deliver a comprehensive range of storage platforms to meet
the needs of a very diverse range of organizations. In this the company has
been remarkably successful. IBM now boasts an impressive array of platforms
scaled to appeal across the board, each of which has good design build. Perhaps
of more importance than the cold speeds, capacities, and acquisition costs of
the platforms, IBM has also invested considerable efforts to ensure that the
management capabilities and administrative features of the solution allow them
to be used to support a wide range of both business-critical and
business-routine systems.
The major challenge is now for IBM to market the new
platforms effectively, especially via its extensive, and growing, partner
channels. The technology is now very good and IBM has to garner mindspace so
that potential customers automatically recognize IBM as a leading storage and
storage management vendor. It will be interesting to see how quickly and how
widely IBM System Storage permeates the storage-buying public. There is much
potential here for IBM but the competitors are also busy. We fully expect to
see the storage race to continue unabated for the foreseeable future.
Lenovo + Cingular = Faster Wireless
ThinkPads
Lenovo and Cingular Wireless have announced the availability
of the ThinkPad T60 notebook, the first Lenovo PC in the U.S. to feature
built-in Cingular UMTS/HSDPA-based technology. The new offering provides users
in the U.S. with mobile high-speed Internet access through Cingular’s
UMTS/HSDPA-based BroadbandConnect service, in more than seventy markets in and
around twenty-one of the top major metro areas. The ThinkPad T60 also works in
conjunction with EDGE or GPRS data services that are available in more than 100
countries worldwide. Access Connections, a ThinkVantage Technology delivered on
the ThinkPad T60, adjusts wired and wireless connectivity automatically.
BroadbandConnect uses UMTS services that are offered by ninety-five commercial
networks in forty-five countries, with sixty-seven additional UMTS networks in
deployment, planned or licensed. In the U.S., UMTS provides average download
speeds of between 400-700KBps that can burst to more than 1MBps. Cingular’s
EDGE network, provides average download speeds of up to 135KBps. Cingular’s
BroadbandConnect service is available in Atlanta, Austin (TX), Baltimore,
Boston, Chicago, Dallas, Gary (IN), Houston, Las Vegas, Phoenix, Portland (OR),
Salt Lake City, San Diego, San Francisco, San Jose (CA), San Antonio, Seattle,
Tacoma (WA), Tucson, and Washington, D.C. metro areas with expansion to most
major U.S. metro areas by the end of 2006. The ThinkPad T60 is now available
from Lenovo and select business partners. ThinkPad T60 users can activate
Cingular’s BroadbandConnect unlimited monthly service directly from Lenovo for
$59.99/mo. with a two-year contract and qualified voice contract.
Alternatively, Cingular Data Connect international plans offer a North American
plan ($109.99 for 100MB) for travel within Canada and Mexico and an Overseas
plan ($139.99 for 100MB). Both include unlimited domestic usage on Cingular’s
domestic data networks. The Overseas plan provides access in more than two
dozen countries including Australia, Canada, China, France, Germany, Great
Britain, India, Italy, Japan, Mexico, Spain, and other major areas in Asia and
Europe.
For existing Cingular EDGE users, this announcement offers
the hope of a future without external cards or dongles, which is always a
welcome relief for the mobile citizen. Competitively this offering now elevates
ThinkPad + Cingular users to the same league as Verizon’s wireless offering,
EV-DO (Evolution-Data Optimized), which entered the market last fall. While
UMTS offers higher speeds than EDGE, the ability to switch between the two
services based upon availability gives this solution the potential to move
beyond a niche offering that is only available in the markets with a high
predisposition for the technological leading edge. EDGE or even existing GPRS
technology is adequate for many mundane mobile tasks such as retrieving email
or responding to an IM, but the higher speeds afforded by UMTS make a
multimedia quality interaction with remote service rep or customer a reality.
From a pure convenient perspective, the embedded approach is a winner.
But beyond mobile applications, i.e., accessing applications
when moving, this integrated higher-speed offering might also prove a viable
offering for fixed locations such as the home, or perhaps the hotel room. With
Internet access often costing $10-$15 or more a night, $60 for a month pays for
itself rather quickly for the frequent traveler. Likewise, for the frequent
traveler, the service eliminates the need for maintaining a DSL circuit at the
home office or paying for access at the local coffee shop. Given the
availability of VoIP services and the availability of DSL from landline phone
companies, will the combination of broadband wireless and the laptop create a
competitor for voice communications? Perhaps so, although we do not think it
likely in the near term. Nevertheless, in many ways we are excited by the
initiative that Cingular and Lenovo are taking to address the mobile Internet
access opportunity. The fact that Cingular, Verizon, and perhaps others in the
future are available within the ThinkPad is to us a solid endorsement of
wireless networking, and one that we hope will help further spur deployment and
innovation in this market arena.
IBM Beefs Up Security in Global Services
This week IBM announced that it was acquiring U.S.-based
Internet Security Systems (ISS) for $1.3 billion. ISS’s specialty has been the
proactive security for the enterprise through automation and focusing on
vulnerabilities in the ever-evolving IT infrastructure. IBM believes the
acquisition, its largest since it acquired PWC, will advance IBM’s strategy to
use IT services, software, and consulting expertise to automate labor-based
processes into standardized, software-based services for its clients. IBM also
believes it will help advance its position in Managed Security Services, which
addresses issues ranging from data theft to implementing regulatory
requirements. ISS is one of the largest providers of security products and
managed security services in the industry, with more than 11,000 customers
worldwide, including many of the largest banks, public insurance companies, and
national governments. ISS will join IBM as a business unit within IBM Global
Services’ Security organization.
ISS has been admired for a while for its approach to
security. While many are still trying to protect objects or systems, ISS has
been evolving a holistic approach that respects that the environment is
ever-changing, and that looks at automating systems as the way to respond in a
proactive manner. In this respect its philosophy is close to that of IBM which
has also embraced a holistic approach and has had a self-healing approach for
its systems and software along with other automated capabilities for years.
Both companies understand that evolving IT security requires an architectural,
big-picture approach rather than a point-product, perimeter-centric approach.
In that sense, the combination of the two should bode well for both vendors’
customers. IBM customers will see the inclusion of a strong security vendor’s
products and services beefing up IBM’s offerings, which have not been as strong
as those of some of its competitors. For ISS, IBM’s scope gives it access to a
greater number of customers than it could have reached alone, and adds
credibility to both companies’ reputations as trusted corporate advisors.
Customers of either company should feel secure that IBM and ISS are committed
to proactive, automated security and managed security services. Next we will be
waiting to see what the company does with identity management, a hot topic on
its own that is tightly connected to many other security issues.
In some ways, it is sensible for IBM to place ISS within
Global Services. The product would be awkward in any other part of IBM, even if
it is largely a software capability. However, that said, putting ISS within
Global Services also makes us uncomfortable. Global Services is the biggest
part of IBM, and it is important, in that frequently Global Services acts like
a laboratory where large customers with specific needs can work with IBM to
make solutions that solve specific problems, and then that intellectual
property can be shared internally within IBM to help productize it for a larger
market or share it in some way with services partners who can offer it in
appropriate form to the SMB market. This is a nice idea in theory, but the
problem is that we haven’t really seen that happen. For many reasons, most of
them quite sensible, Global Services is unable or unwilling to deal with
entities smaller than roughly 1,000 employees. In the grand scheme of IT, this
leaves an awful lot of the market open. Global Services’ business model is not
designed to deal with the mid-market, nor should it necessarily do so, but IBM
still does not have a way to capture the extensive IP it is building within
Services to leverage it across the company or the market.
We fear that ISS’s products and approach will continue to
benefit large companies but that an awful lot of the mid-market will not have
access to those capabilities. While this may not seem terrible from a near-term
revenue viewpoint, from a security viewpoint it should be viewed with alarm.
Organizations interact, especially within supply chains, and partners need to
be inculcated in the same methodologies, approaches, and philosophies as the
larger players. IBM has a significant partner organization although it is
essentially a tactical unit for helping partners navigate IBM. However, we
strongly urge IBM to work with its product groups, Global Services, and the
partner organization to figure out ways to take the great ideas in Global
Services and bring them out of the ivory towers of the consultants and
academicians and down to the larger masses of IT managers worldwide.
Boeing recently announced that it is going to quit offering
Connexion, an in-flight broadband service that allows passengers to access the
Internet over satellite links. Air France, Japan Air, and Lufthansa were among
the airlines carrying the service, as well as Korea Air. Korea Air, at least,
has announced that it is going to sue Boeing for $12 million for the
discontinuation of the service. The airline reportedly spent about $400,000 to
equip their aircraft to be compatible with the soon-to-be-defunct broadband
service. While Boeing stated that the reason for the discontinuation was due to
lack of demand, Japan Air and Lufthansa are reportedly studying their options
to decide if alternative service companies are a viable solution for continuing
to offer their customers Internet in the sky.
In-flight Internet access, while seemingly a slam-dunk
offering for the techno literati, seems to have become a solution in search of
a problem. There doesn’t seem to be any problem with the technology behind
in-flight broadband; from all reports, it works just fine. But what was the
problem that led to its development in the first place? People couldn’t get
their email or surf the Internet while strapped into their metal coffins at
30,000 feet, and much of the rationale of the service was that people would
want to do so. As there hasn’t seemed to be much of a hue and cry for the
service, this slam-dunk offering has turned into quite a gamble considering the
cost of developing and launching such an expensive, large-scale technology. And
indeed, that gamble seems to have not paid off, at least for Boeing.
Just because you build it, doesn’t mean they will come. We
see the root of the problem as a behavioral one rather than a pricing or
technology issue. Reportedly, part of what led to the decision to offer
Internet connectivity on airlines was the fact that executive jets have had the
capabilities for a while, and traditionally new technologies are launched in
the expensive car or expensive jet arenas. As the technology becomes more
common and less expensive, it trickles down and becomes available to the
masses. However, when it comes to being able to work, the masses may just think
that their bosses in the company jets can keep that particular productivity to
themselves. Indeed, interpretation of some countries’ work regulations may
forbid an employee from working that much. For many of us peasants flying in
steerage, our flight time equals our down time, and we don’t want to be
bothered with email emergencies while also juggling our peanuts and half-a-soda
drinks during turbulence.
There is also the problem of security. Many employees
probably realize that it is difficult to keep your passwords and sensitive
company information to yourself when you’re practically sitting in a stranger’s
lap. However, the recent events in the UK may make this a moot point. If an
employee has to choose between carrying on a laptop or personal items, the
laptop will most likely get checked. This is assuming, of course, that a choice
is given in the first place on any particular flight. The recently lifted BAA
regulations banned all carry-on electronic items from BAA-operated airports for
a time, with no guarantees that the ban would not come back into effect at any
moment. Prohibitions on carry-on laptops renders in-flight Internet access
irrelevant.
While Connexion is ready to throw in the towel, we do not believe that in-flight Internet is doomed in perpetuity. As two of the Connexion carriers are exploring other options, and there is still a segment of workaholic professionals who view in flight access as a plus, so there is a market, albeit perhaps a niche one. We believe in-flight access will most likely appear again at some future date and perhaps eventually become a part of every airline passenger’s reality, much like in-flight movies and rubberized sandwiches. We just don’t think its usage will surface in the mainstream any time soon.