Virtualization and the New Economy

Microsoft is cutting 5,000 jobs on a reduction of 11% net income, and IBM - with net income up 12% - saw server sales drop 20% in the fourth quarter (2008) with Intel servers down 32%. Is the market is getting tougher or just smarter? IBM cites virtualization and consolidation as part of its weakend sales picture.

At SOLORI, we see the computing world as a vastly commoditized market. Sure, "no one ever got fired for buying IBM" - or Microsoft for that matter - but CIO's and COO's of smaller, leaner enterprises might be rethinking their purchasing strategies and where premium products fit in their organization. It appears that they were waking-up to this in Q4/2008. We're asking customers to examine purchasing habits and form long-term relationships with commodity infrastructure vendors that provide good value and support without relying on service contracts to shore-up product quality.

Sure, IBM has a great service group, and that service is worth paying for by every means. However, are you asking the question: do I need that level of service if it does not actually change reliability?

Take the example of a typical VMware ESX consolidation: we're looking for performance, reliability and scaling. We need three (3) 2P/4C/32GB/6GE servers for VMotion and high availability; local storage is irrelevent since clustered storage will be used. Choose an IBM x3455 for $5,749.00/each (7949AC1), get a Dell R805 for $4,550 or buy a "white box" Supermicro AS-1021M for $3,150/each similarly configured with KVM-over-IP? That's a savings of 30-45% in initial hardware purchases. For the $7,200 in savings you'd nearly net your VMware license and have money left-over for training.

And before the arms get raised, yes, the Supermicro AS-1021M-UR has a 600W 1+1 power supply and has support for VMware for ESX Server 3 and ESX Server 3i. The single rack unit AS-1021M-UR comes in a more versitile 2U variant, the AS-2021M-UR, which also has redundant supplies and additional expansion due to its 6-slot riser versus the 2-slot riser of the AS-1021M.

Is the corporate world ready for the "white box" economy? Maybe not, but it's never too early to get your budget in order, and as quickly as the winds change in this economy, being nimble on hardware and smart on software could mean the difference between here today and gone tomorrow...