Market Roundup

August 25, 2006

IBM Enhances Storage Portfolio

Lenovo + Cingular = Faster Wireless ThinkPads

IBM Beefs Up Security in Global Services

A Bad Connexion?


IBM Enhances Storage Portfolio

By Tony Lock

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 ďsexyĒ 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 IBMís 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

By Clay Ryder

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 Cingularís 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. Cingularís EDGE network, provides average download speeds of up to 135KBps. Cingularís 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 Cingularís 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 Cingularís 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 Verizonís 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

By Joyce Tompsett Becknell

This week IBM announced that it was acquiring U.S.-based Internet Security Systems (ISS) for $1.3 billion. ISSís 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 IBMís 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 Servicesí 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 vendorsí customers. IBM customers will see the inclusion of a strong security vendorís products and services beefing up IBMís offerings, which have not been as strong as those of some of its competitors. For ISS, IBMís scope gives it access to a greater number of customers than it could have reached alone, and adds credibility to both companiesí 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 havenít 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 Servicesí 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 ISSís 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.

A Bad Connexion?

By Susan Dietz

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 doesnít 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 couldnít 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 hasnít 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, doesnít 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 countriesí 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 donít 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 youíre practically sitting in a strangerís 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 passengerís reality, much like in-flight movies and rubberized sandwiches. We just donít think its usage will surface in the mainstream any time soon.

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