Cisco

ITIC 2021 Global Server Hardware, Server OS Reliability Survey Results

2021, ITIC Reports & Surveys / By Laura DiDio

The technical and business challenges posed by the ongoing global pandemic didn’t compromise the core reliability of IBM, Lenovo, Huawei, Hewlett-Packard Enterprise and Cisco servers.

For the 13th straight year, IBM’s Z mainframe and mission critical Power servers achieved the highest server hardware reliability and delivered the strongest server security, among 15 different platforms, in ITIC’s annual 2021 Global Server Hardware, Server OS Reliability Survey.

And for the eighth consecutive year, Lenovo’s ThinkSystem servers again matched their best recorded uptime among all Intel x 86 servers along with Huawei’s KunLun and Fusion platforms. The HPE Superdome and the Cisco UCS hardware (in that order), rounded out the top five most reliable vendor hardware platforms (See Exhibit 1).

ITIC’s 2021 Global Server Hardware, Server OS Reliability independent Web-based survey, polled 1,200 corporations across 28 vertical market segments worldwide on the reliability, performance and security of the most popular server platforms from January through June 2021. Additionally, the preliminary findings from ITIC’s 2021 Global Reliability updated survey conducted from September through November 2021, indicate that the IBM Z, IBM Power servers; the Lenovo ThinkSystem and Huawei KunLun and Fusion servers continue to dominate and deliver the highest uptime, availability and security in datacenters and the cloud.

Among the top survey findings:

Server Reliability: IBM z14 and z15 outpaced all rivals, matching its best ever results: just 0.60 seconds of per server monthly unplanned downtime. The IBM Power models also equaled their best uptime scores over the last 13 years, with just 1.49 minutes of unplanned per server downtime. The Lenovo ThinkSystem and Huawei KunLun platforms followed closely, each with 1.51 minutes of unplanned per server outages. Inspur was in the middle of the pack with 11 minutes of unplanned per server downtime, while the Dell PowerEdge servers posted 26 minutes of unanticipated outages. Unbranded White box servers (which often run unlicensed or pirated software) again were the least reliable servers with 57 minutes of unplanned per server downtime; this is up two (2) minutes from 2020.
Server Availability: The IBM Z servers are in a class by themselves, a 94% majority of IBM Z customers said their businesses achieved unparalleled fault tolerant levels of six and seven nines – 99.9999% and 99.99999% reliability and continuous availability, the best among all server distributions. The IBM Power is close behind with 91% of customers reporting that the Power9 and latest Power10 models deliver a minimum of five and six nines availability/uptime. Meanwhile, 90% of Lenovo ThinkSystem, Huawei KunLun and HPE Superdome enterprises said their businesses achieve a minimum of five and six nines server availability.
Cost Effectiveness/Total Cost of Ownership: The most reliable IBM z14 and z15; IBM LinuxONE III and the PowerPower8 and PowerPower9 servers deliver the best TCO and near immediate Return on Investment (ROI). A single minute of per server unplanned downtime on an IBM z14 or z15 server, calculated at a rate of $100,000, costs enterprise customers $1,002. One minute of unplanned downtime on a single IBM Power8 and Power9 calculated at $100,000 an hour costs $2,488. The upcoming Power10, slated to ship in September will likely offer better reliability and lower costs even further. The Lenovo ThinkSystem and Huawei KunLun and Fusion offerings each averaged 1.51 minutes of unplanned per server outages; that equates to per server/per minute downtime charges of $2,521. Unbranded White box servers with 57 minutes of unplanned per server downtime could cost corporations $95,190 when hourly downtime losses are calculated at $100,000 (See Exhibit 3 and Exhibit 4).
Security hacks, user error and remote working/remote learning are the top three causes of unplanned downtime. A 73% majority of survey participants cited security as the number one cause of unplanned server downtime; 64% said human error caused unplanned server outages. Meanwhile, 58% of survey participants attributed increased downtime to management and security issues related to COVID-19 issues like remote working and remote academic learning via Zoom meetings for K-through-12 and college classes. While offices and schools were closed during the global pandemic during 2020 and much of 2021, IT and security administrators were hard pressed to effectively manage and secure remote PCs, laptops, notebooks and tablets. Consequently many employees and students did not adequately secure their personal devices. An April 2021 Fortune magazine article noted that hybrid and remote workplace and academic environments created many positive opportunities for businesses and schools, but they also represent a potential boon for hackers.

In 2020, cybercriminals transmitted 61% of malware through cloud applications to target remote workers, according to the July 2021 Netskope Cloud and Threat Report . The report said that utilizing cloud-based applications enables hackers to circumvent older, legacy Email and Web-based security solutions. The Netskope report further noted that security risks are exacerbated by the fact that 83% of employees and students access sensitive personal data via applications installed on corporate and academic devices e.g., laptops, notebooks and tablets. This can result in dire consequences in the connected digital era. To cite one example, in March 2020, the California State Controller’s Office, which handles $100 billion a year, suffered an email phishing attack on an employee that enabled cyber criminals cloud access to internal documents; once they gained entrance to the employee’s device they were able to successfully phish another 9,000 employees.

The reliability and security of server hardware, server operating systems and mission critical applications are critical elements of the core datacenter, network edge and cloud infrastructure.

Eighty-nine (89%) percent of organizations require a minimum of “four nines” – 99.99% reliability to ensure uninterrupted daily business operations and secure data assets to sustain the company’s revenue stream and mitigate risk. And over one-third of organizations now strive for “five nines” 99.999% of uptime; this equals 5.25 minutes of per server unplanned downtime.

Each second and minute of server downtime and the associated mission critical applications costs the business money and raises transactional operations and monetary risks.

In the digital era of interconnected intelligent systems and networks, unplanned downtime of even a few minutes is expensive and disruptive and can reverberate across the entire ecosystem. This includes datacenters; virtualized public, private and hybrid clouds; remote work and learning environments and the intelligent network edge.

ITIC’s 2021 Hourly Cost of Downtime survey indicates a single hour of server downtime totals $300,000 or more for 91% percent of mid-sized enterprises (SMEs) and large enterprises. And among that 91% majority – nearly half or 44% – of corporations said, hourly outage costs exceed one million ($1M) to over five million ($5M).

ITIC 2021 Global Server Hardware, Server OS Reliability Survey Results Read More »

High Tech R&D in the COVID-19 Era is Crucial

Laura's Insights ITIC Blog / By Laura DiDio

https://www.technewsworld.com/story/86977.html

Maintaining and increasing research and development (R&D) spending in the COVID-19 era is critical for high technology vendors to deliver new solutions and services, continue to innovate and position their businesses to rebound from the negative effects of the global pandemic.

The COVID-19 global pandemic has been disastrous for business around the globe. The nouvel Corona virus has disrupted and continues to upend every aspect of corporate and personal daily life. Analysts and financial advisors/investors concur that wherever possible vendors should continue to aggressively invest in R&D. That is: spend money to make money. …

High Tech R&D in the COVID-19 Era is CrucialRead More »

High Tech R&D in the COVID-19 Era is Crucial Read More »

ITIC 2020 Editorial Calendar

2019, 2020, Editorial Calendars / By Laura DiDio

March/April 2020: ITIC 2020 Global Server Hardware and Server OS Reliability Survey

Description: Reliability and uptime are absolutely essential. Over 80% of corporations now require a minimum of 99.99% availability and greater; and an increasing number of enterprises now demand five nines – 99.999% or higher reliability. But which platforms actually deliver? This survey polls businesses on the reliability, uptime and management issues involving the inherent reliability of 14 different server hardware platforms and server operating system. The survey polls corporations on the frequency, the duration and reasons associated with Tier 1, Tier 2 and Tier 3 outages that occur on their core server OS and server hardware platforms. The results of this independent, non-vendor sponsored survey will provide businesses with the information they need to determine the TCO and ROI of their individual environments. The survey will also enable the server OS and server hardware vendors to see how their products rate among global users ranging from SMBs with as few as 25 people to the largest global enterprises with 100,000+ end users.

The 2020 ITIC Global Reliability Survey has also been updated and expanded to include questions on:

Component level failure data comparisons between IBM Power Servers and Intel-based x86 servers such as Dell, HP, Huawei, Lenovo and Cisco.
Percentage of component level failure data comparisons by vendor according to age (e.g. new to three months; three to six months; six months to 1 year; 1 to 2 years; 2 to 3 years; 3 to 4 years; 4 to 5 years; over five years).
Which component parts fail and frequency of failure
A percentage breakout of server parts failures for parts such as hard disk drives(HDD), processors, memory, power components, fans, or other
Where available, how the component failed. For example: memory multi-bit errors, HDD read failures, processor L1/L2 cache errors, etc.

April/May: 2020 Hourly Cost of Downtime

Description: Downtime impacts every aspect of the business. It can disrupt operations and end user productivity, result in data losses and raise the risk of litigation. Downtime can also result in lost business and irreparably damage a company’s reputation. The cost of downtime continues to increase as do the business risks. ITIC’s 2019 Hourly Cost of Downtime survey found an 85 % majority of organizations now require a minimum of 99.99% availability. This is the equivalent of 52 minutes of unplanned outages related to downtime for mission critical systems and applications or just 4.33 minutes of unplanned monthly outage for servers, applications and networks. This survey will once again poll corporations on how much one hour of downtime costs their business – exclusive of litigation, civil or criminal penalties. ITIC will also interview customers and vendors across 10 key vertical markets including: Banking/Finance; Education; Government; Healthcare; Manufacturing; Retail; Transportation and Utilities. The Report will focus on the toll that downtime extracts on the business, its IT departments, its employees, its business partners, suppliers and its external customers. This report will also examine the remediation efforts involved in resuming full operations as well as the lingering or after-effects to the corporation’s reputation as the result of an unplanned outage.

May/June 2020: ITIC Sexual Harassment, Gender Bias and Pay Equity Survey

Description: ITIC’s “Sexual Harassment, Gender Bias and Pay Equity Gap,” independent Web survey polled 1,500 women professionals worldwide across 47 different industries, with a special emphasis on STEM disciplines. The survey focuses on three key areas of workplace discrimination: Sexual Harassment, Gender Bias and Unequal Pay.

July/August: 2020 IoT Deployment and Usage Trends Survey and Report

Description: The Internet of Things (IoT) has been one of the hottest emerging technologies of the last several years. This ITIC Report will present the findings of an ITIC survey that polls corporations on the business and technical challenges as well as the costs associated with IoT deployments. This IoT Report will also examine the ever present security risks associated with interconnected environments and ecosystems. ITIC’s IoT 2020 Deployment and Usage Trends Survey will also query global businesses on a variety of crucial issues related to their current and planned Internet of Things (IoT) usage and deployments such as how they are using IoT (e.g. on-premises versus Network Edge/Perimeter deployments); the chief benefits and biggest challenges and impediments to IoT upgrades. Vendors profiled for this report will include: AT&T, Bosch, Cisco, Dell, Fujitsu, General Electric (GE), Google, Hitachi, Huawei, IBM, Intel, Microsoft, Particle, PTC, Qualcomm, Samsung, SAP, Siemens and Verizon.

August: ITIC 2020-2021 Security Trends

Description: Security, security, security! Security impacts every aspect of computing and networking operations in the Digital Age. And it’s never been more crucial as businesses, schools, government workers and consumers are working at home amidst the ongoing Nouvel and damaging security hack impacting the lives of millions of consumers and corporations. This Report will utilize the latest ITIC independent survey data to provide an overview of the latest trends in computer security including the latest and most dangerous hacks and what corporations can do to defend their data assets. Among the topics covered:

Security threats in the age of COVID-19
The most prevalent type of security hacks
The percentage of corporations that experienced a security hack
The duration of the security hack
The severity of the security hack
The cost of the security hack
Monetary losses experienced due to security breaches
Lost, damaged, destroyed or stolen data due to a security breach
The percentage of time that corporations spend securing their networks and data assets
Specific security policies and procedures companies are implementing
The issues that pose the biggest threats/risks to corporate security

August/September: ITIC 2020 Global Server Hardware Server OS Reliability Survey Mid-Year Update

Description: This Report is the Mid-year update of ITIC’s Annual Global Server Hardware, Server OS Reliability Survey. Each year ITIC conducts a second survey of selected questions from its Annual Reliability poll. ITIC also conducts new interviews with C-level executives and Network administrators to get detailed insights on the reliability of their server hardware and operating system software as well as the technical service and support they receive from their respective vendors. ITIC will also incorporate updated PowerPoint slides and statistics to accompany the report.

October/November: AI, Machine Learning and Data Analytics Market Outlook

Description: This Report will examine the pivotal role that AI, Machine Learning and IoT-enabled predictive and prescriptive Analytics plays in assisting businesses sort through the data deluge to make informed decisions and derive real business value from their applications. AI and Machine Learning take Data Analytics to new levels. They can help businesses identify new product opportunities and also uncover hidden risks. Machine intelligence is already built into predictive and prescriptive analytics tools, speeding insights and enabling the analysis of vast probabilities to determine an optimal course of action or the best set of options. Over time, more sophisticated forms of AI will find their way into analytics systems, further improving the speed and accuracy of decision-making. Rather than querying a system and waiting for a response, the trend has been toward interactivity using visual interfaces. In the near future, voice interfaces will become more common, enabling humans to carry on interactive conversations with digital assistants while watching the analytical results on a screen. Analytics makes businesses more efficient; it enables them to cut costs and lower ongoing operational expenditures. It also helps them respond more quickly and agilely to changing market conditions – making them more competitive and thus driving top line revenue in both the near term and long term strategic sales. Vendors Profiled: AppDynamics, BMC, Cisco, IBM, Microsoft, Oracle, SAP and SAS. It also discusses how non-traditional vendors in the carrier and networking segments e.g. Dell/EMC, GE, Google, Verizon and Vodafone have fully embraced AIOps and analytics via partnerships, acquisitions and Research and Development (R&D) initiatives and have moved into this space and challenged the traditional market leaders. And it will provide an overview of the latest Mergers and Acquisitions (M&A) and their impact on the Analytics industry.

December: ITIC 2021 Technology and Business Outlook

Description: This Report will be based on ITIC survey results that poll IT administrators and C-level executives on a variety of forward looking business and technology issues for the 2020 timeframe. Topics covered will include: Security, IT staffing and budgets; application and network infrastructure upgrades; hardware and software purchasing trends and cloud computing.

Survey Methodology

ITIC conducts independent Web-based surveys that contain multiple choice and essay questions. In order to ensure the highest degree of accuracy, we employ authentication and tracking mechanisms to prohibit tampering with the survey results and to prohibit multiple votes by the same party. ITIC conducts surveys with corporate enterprises in North America and in over 25 countries worldwide across a wide range of vertical markets. Respondents range from SMBs with 25 to 100 workers to the largest multinational enterprises with over 100,000 employees. Each Report also includes two dozen first person customer interviews and where applicable, vendor and reseller interviews. The titles of the survey respondents include:

Network administrators
VPs of IT
Chief information officers (CIOs)
Chief technology officers (CTOs)
Chief executive officers (CEOs)
Chief Information Security Officers (CISOs)
Chief Marketing Officers (CMOs)
Consultants
Application developers
Database Administrators
Telecom Manager
Software Developer
System Administrator
IT Architect
Physical Plant Facilities Manager
Operations Manager
Technical Lead
Cloud Managers/Specialists
IoT Manager
Server Hardware/Virtualization Manager

ITIC welcomes input and suggestion from its vendor and enterprise clients with respect to surveys, survey questions and topics for its Editorial Calendar. If there are any particular topics or questions in a specific survey that you’d like to see covered, please let us know and we will do our best to address it.

About Information Technology Intelligence Corporation (ITIC)

ITIC, founded in 2002, is a research and consulting firm based in suburban Boston. It provides primary research on a wide variety of technology topics for vendors and enterprises. ITIC’s mission is to provide its clients with tactical, practical and actionable advice and to help clients make sense of the technology and business events that influence and impact their infrastructures and IT budgets. ITIC can provide your firm with accurate, objective research on a wide variety of technology topics within the network infrastructure: application software, server hardware, networking, virtualization, cloud computing, Internet of Things (IoT) and Security (e.g. ransom ware, cyber heists, phishing scams, botnets etc.). ITIC also addresses the business issues that impact the various technologies and influence the corporate business purchasing decisions. These include topics such as licensing and contract negotiation; GDPR; Intellectual Property (IP); patents, outsourcing, third party technical support and upgrade/migration planning.

To purchase or license ITIC Reports and Survey data contact: Fred Abbott

Email: fhabbott@valleyviewventures.com;

Valley View Ventures, Inc.

Phone: 978-254-1639

www.valleyviewventures.com

ITIC 2020 Editorial Calendar Read More »

IBM Bets Big on Cloud, Buys Red Hat for $34B

Laura's Insights ITIC Blog, News / By Laura DiDio

IBM will acquire open source software and cloud services company Red Hat in a $34B all-cash deal – approximately $190 per share – executives for both firms announced during a joint Monday morning Webcast.

Once the acquisition is complete sometime in the latter half of 2019,Red Hat will become a standalone business unit within IBM’s Hybrid Cloud Team, both companies said in a joint press release. This will preserve the “independence and neutrality” of Red Hat’s open source development heritage and commitment, current product portfolio and go-to-market strategy, and unique development culture. Red Hat will continue to be led by current CEO and president Jim Whitehurst and its current management team. Whitehurst will join IBM’s senior management team and report to IBM chairman, president and chief executive Virginia “Ginni”Rometty. IBM executives said during the Webcast that it intends to maintain Red Hat’s current Research Triangle Park, N.C. headquarters, facilities, brands and practices.

Rometty heralded the Red Hat acquisition as a “game changer” and said it’s all about “resetting the cloud landscape.” IBM’s $34B purchase of Red Hat will be the biggest acquisition in the company’s 107-year history and the price tag equals one-third of IBM’s $105.38B total market valuation.

Rometty clearly feels Red Hat is worth the investment. On Monday’s Webcast she stated that the deal will make “IBM and Red Hat the undisputed Number One leader in hybrid cloud. Our IBM cloud platform is growing like crazy,” Rometty said, adding that “Hybrid cloud is an emerging $1 trillion market.”

The acquisition has been approved by the boards of directors of both IBM and Red Hat. It is subject to Red Hat shareholder approval. It also is subject to regulatory approvals and other customary closing conditions. Meanwhile, IBM intends to suspend its share repurchase program in 2020 and 2021.At signing, IBM has ample cash, credit and bridge lines to secure the transaction financing. The company intends to close the transaction through a combination of cash and debt.

During the Webcast, Rometty made the case for growth in the hybrid cloud market segment claiming that “most companies today are only 20 percent along” their cloud journey, renting compute power to cut costs. The next 80 percent is about unlocking real business value and driving growth. “This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales,” Rometty said.

Red Hat’s Whitehurst was equally enthusiastic about the forthcoming IBM acquisition. “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”

Throughout the webcast, IBM Senior Vice President of Hybrid Cloud Arvind Krishna and Red Hat Executive Vice President and President of Products and Technologies Paul Cormier emphasized that it would be business as usual with both IBM and Red Hat continuing to honor existing business commitments and partnerships with other firms.

The executives said all of Red Hat’s existing partnerships with other cloud providers including those with major cloud providers such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and more, in addition to the IBM Cloud will remain in place. At the same time, Red Hat will benefit from IBM’s hybrid cloud and enterprise IT scale in helping expand its open source technology portfolio to businesses globally.Red Hat will also continue its open source development projects such as Red Hat Enterprise Linux (RHEL), the OpenShift implementation of Kubernetes-based containers, and the OpenStack cloud computing platform. Similarly, Krishna said, IBM would continue its partnerships with other Linux distributions.

“IBM is committed to being an authentic multi-cloud provider, and we will prioritize the use of Red Hat technology across multiple clouds,” said Arvind Krishna, Senior Vice President, IBM Hybrid Cloud. “In doing so, IBM will support open source technology wherever it runs, allowing it to scale significantly within commercial settings around the world.”

Analysis

The synergies between IBM and Red Hat are obvious.

It’s very apparent the appeal that Red Hat holds for IBM and vice versa.

The two firms are starting from a strong, solid foundation. They’ve been doing business for over two decades. In recent years, Red Hat has expanded its Red Hat Enterprise Linux (RHEL) operating system distribution and services to run on IBM’s POWER servers and z System mainframes. It’s an alliance that has served both firms well.

“Red Hat is not an open source company. We’re an enterprise software company with an open source development model. Our secret sauce is putting those two things together,” Red Hat’s Cormier noted on Monday’s Webcast. “IBM,” he added, “also has a long history of enterprise-grade software and open source development. So, the two companies have a lot in common.”

IBM now wants to capitalize on that commonality in a very big way. It’s no secret that Big Blue’s cloud growth has lagged behind behemoths like Amazon, Google and Microsoft. A 2018 State of the Cloud Report by Rightscale, a cloud management firm, which surveyed 1,000 users, rated IBM as a number four cloud service provider behind Amazon, Microsoft and Google. The Rightscale study also showed that IBM cloud deployment was occurring at a slower pace than the other three market leaders. The Red Hat purchase could serve to accelerate IBM’s cloud deployments and close the gap between IBM, Amazon, Microsoft and Google.

Red Hat helps IBM to grow its cloud business on all fronts: private, public and hybrid clouds since Red Hat built its model on open source and open standards and a very active open source developer community. This stands in stark contrast to the proprietary offerings of Microsoft, Amazon, Google, Oracle and other players.Both IBM and Red Hat can leverage their core strengths in Linux, Kurbernetes, cloud management and service and support. Additionally, Red Hat will have access to IBM’s strong, deep ties to the channel which should enable it to close enterprise deals worldwide and give Red Hat’s product portfolio much greater exposure.

Another plus is IBM’s proven track record with open source. IBM has made numerous royalty-free patent contributions to the Open Invention Network to support development of the Linux platform as well as contributions to Java and the Eclipse development platform, so all of this should stand it in good stead as it moves to embrace and expand its hybrid cloud initiatives.

IBM and Red Hat By the Numbers: Betting Big on the Cloud

The biggest question from investors and analysts following the merger announcement: is whether Red Hat, a company with approximately one-fourth IBM’s valuation is worth the $34B purchase price?

Based on IBM’s perspective of gaining a competitive cloud advantage the answer is a resounding “Yes.”

Consider that just 18 months ago, Red Hat CEO Whitehurst revealed in a quarterly analyst call that the firm’s biggest deal worth over $20M, came from Linux. But in the last year Red Hat’s top two dozen deals totaling $5M or more were attributable to its OpenShift offering. The OpenShift Container Platform (formerly known as OpenShift Enterprise) is Red Hat’s on-premises private platform as a service product, built around a core of application containers powered by Docker, with orchestration and management provided by Kubernetes, on a foundation of Red Hat Enterprise Linux. IBM hopes that the combination of its own and Red Hat cloud open source offerings and services sold through its worldwide channel will enable it to expand its presence among enterprises seeking to move their datacenters to the cloud.

Ironically, in the immediate aftermath of the announcement IBM’s stock price declined by 3.54 percent and was trading at $115.40 at Tuesday’s market close, while Red Hat’s stock rose slightly to $170 at Tuesday’s market close. Now, a week later, IBM’s stock price rebounded to $120, but it is still trading well below its 52-week high of $171. Red Hat’s stock meanwhile, continues to climb and gained another three dollars closing at $173.31 after the bell on November 5.

As Exhibits 1 and 2 below illustrate, IBM and Red Hat’s financials each face challenges going forward – specifically in terms of jump starting quarterly revenue and income growth. IBM is also facing pressure to increase its stock price which is now trading at the lower end of its 52-week low of 114.

Exhibit 1. IBM by the Numbers

IBM Financials, R&D Spending and Patents	2017 – 2018
Current Stock Price as of 11/5/2018	$120.06 (US)
Market Capitalization	$109.11 Billion
Profit Margin	7.12%
Operating Margin	15.14%
Return on Assets	6.24%
Return on Equity	28.82%
Revenue	$80.37B
Quarterly Revenue Growth	-2.10%
Net Income	$5.72B
Quarterly Earnings Growth	-1.20%
Total Cash	$14.49B
Total Debt	$46.92B
Total Global Workforce	380,300
Research & Development Spending	$5.6B
Number of Patents	9,043 patents awarded in 2017 nearly half in AI, cloud, blockchain, quantum & security. Nearly 780,000 total Patents

Source: ITIC

Exhibit 2. Red Hat by the Numbers

Red Hat Financials, R&D Spending and Patents	2017 – 2018
Current Stock Price as of 11/5/2018	$173.31 (US)
Market Capitalization	$30.6 Billion
Profit Margin	9.08%
Operating Margin	15.73%
Return on Assets	6.57%
Return on Equity	21.30%
Revenue	$3.16B
Quarterly Revenue Growth	13.70%
Net Income	$286.44M
Quarterly Earnings Growth	-10.50%
Total Cash	$1.77B
Total Debt	$516.53M
Total Global Workforce	12,600
Research & Development Spending	$578.33M
Number of Patents	>2,000 since 2002 but does not enforce if used in properly licensed open sourced software

Source: ITIC

Skepticism: Will Other Suitors Emerge?

As with any merger or acquisition, there’s always the potential that a deal will get called off or that other suitors will emerge.

Several Wall Street analysts suggested that high technology rivals might decide to play the role of spoiler and top IBM’s bid of $190 per share for Red Hat. Some of the names being mentioned as possible suitors were: Cisco Systems, Inc., Google and Oracle Corp.

On Monday, Cowen analyst Gregg Moskowitz, was one of those Wall Street analysts who opined that other bidders may crop up. “The substantial premium that IBM is paying for Red Hat might on the surface seem to make it highly unlikely that a superior bid could occur,” Moskowitz said. “However, we believe there is a reasonable possibility that another suitor could emerge.” Moskowitz said if a breakup fee was not overly onerous, Cisco might be a likely contender to lure Red Hat away.

Brad Reback, a Senior Equity Research Analyst at Stifel Nicolaus & Company, Inc. said in a research note that he would “not be surprised if hyperscale cloud vendorslike Google, Amazon, Microsoft, or Oracle make a competing bid given Red Hat’s strategic position within on-premises datacenters (over 100K customers).”

Microsoft, however, might be a longshot since it recently announced its own open source initiative with its $7.5B acquisition of GitHub.

Michael Turits, Managing Director Equity Research Infrastructure at Raymond James & Associates, says a bidding war may occur in the near future and says IBM’s bid for Red Hat could set off a buying frenzy for software firms.

Turits said a stronger IBM cloud portfolio poses a threat to several of its rivals, including Microsoft and Oracle.

Conclusion

IBM has made a bold move to strengthen its position in hybrid clouds and close the gap between itself and Amazon, Google and Microsoft. Purchasing Red Hat also brings IBM more closely back to its core strengths in software, open source and services. The Red Hat Linux distribution should also serve to further solidify IBM’s already strong POWER and z Systems server hardware offerings.

What is not clear is how the merged entity will treat or de-emphasize its relationships/partnerships with other cloud vendors once the Red Hat acquisition is complete. Regardless of what IBM and Red Hat say now, changes are bound to occur in those relationships.

The more immediate issue is whether or not any other firms will decide to up the ante and start a bidding war for Red Hat. That could make things very interesting. For right now though, IBM has served notice that it will put its money and its marketing muscle behind its cloud ambitions.

IBM Bets Big on Cloud, Buys Red Hat for $34B Read More »

ITIC Poll: Human Error and Security are Top Issues Negatively Impacting Reliability

2018, ITIC Reports & Surveys, Laura's Insights ITIC Blog / By Laura DiDio

Multiple issues contribute to the high reliability ratings among the various server hardware distributions. ITIC’s 2018 Global Server Hardware, Server OS Reliability Mid-Year Update reveals that three issues in particular stand out as positively or negatively impacting reliability. They are: Human Error, Security and increased workloads.

ITIC’s 2018 Global Server Hardware, Server OS Reliability Mid Year Update polled over 800 customers worldwide from April through mid-July 2018. In order to obtain the most objective and unbiased results, ITIC accepted no vendor sponsorship for the Web-based survey.

Human Error and Security Are Biggest Reliability Threats

ITIC’s latest 2018 Reliability Mid Year update poll also chronicled the strain that external issues placed on organizations and their IT departments to ensure that the servers and operating systems deliver a high degree of reliability and availability. As Exhibit 1 illustrates, human error and security (both from internal and external hacks) continue to rank as the chief culprits that cause unplanned downtime among servers, operating systems and applications for the fourth straight year. After that, there is a drop off of 22 to 30 percentage points for the remaining issues ranked in the top five downtime causes. Both human error and reliability have had the dubious distinction of maintaining the top two factors precipitating unplanned downtime in the past five ITIC reliability polls.

Analysis

Reliability is a two-way street in which server hardware, OS and application vendors as well as corporate users both bear responsibility for the reliability of their systems and networks.

On the vendor side, there are obvious reasons why hardware makers like HPE, IBM and Lenovo mission critical servers consistently gain top reliability ratings. As ITIC noted in Part 1 of its reliability survey findings, the reliability gap between high end systems and inexpensive, commodity servers with basic features continue to grow. They include:

Research and Development (R&D) Vendors like Cisco, HPE, Huawei, IBM and Lenovo have made an ongoing commitment to research and development (R&D) and continually refresh/update their solutions.
RAS 2.0.The higher end servers incorporate the latest Reliability, Accessibility and Serviceability (RAS) 2.0 features/functions and are fine-tuned for manageability and security.
Price is not the top consideration. Businesses that purchase higher end mission critical and x86 systems like Fujitsu’s Primergy, HPE’s Integrity, Huawei’s KunLun, IBM Z and Power Systems and Lenovo System x want a best in class product offering, first and foremost. These corporations in verticals like banking/finance, government, healthcare, manufacturing, retail and utilities are more motivated with the historical ability of the vendor to act as a true responsive “partner” delivering a highly robust, leading edge hardware. They also want top-notch after market technical service and support, quick response to problems and fast, efficient access to patches and fixes.
More experienced IT Managers. In general, IT Managers, application developers, systems engineers and security professionals at corporations which purchase higher end servers from IBM, HPE, Lenovo, and Huawei tend to have more experience. The survey found that organizations that buy mission critical servers have IT and technical staff that boast approximately 12 to 13 years experience. By contrast, the average experience among IT managers and systems engineers at companies that purchase less expensive commodity based servers is about six years.

Highly experienced IT managers are more likely to spot problems before they become a major issue and lead to downtime and in the event of an outage. They are also more likely to perform faster remediation, accelerating the time it takes to identify the problem and get the servers and applications up and running faster than less experienced peers.

In an era of increasingly connected servers, systems, applications, networks and people, there are myriad factors that can potentially undercut reliability; they are:

Human Error and Security. To reiterate, these two factors constitute the top threats to reliability. ITIC does not anticipate this changing in the foreseeable future. Some 59% of respondents cited Human Error as their number one issue, followed by 51% that said Security problems caused downtime. And nearly two-thirds — 62% — of businesses indicated that their Security and IT administrators grapple with a near constant deluge of more pervasive and pernicious security threats. If the availability, reliability and access to servers, operating systems and mission critical main LOB applications is compromised or denied, end user productivity and business operations suffer immediate consequences.
Heavier, more data intensive workloads. The latest ITIC survey data finds that workloads have increased by 14% to 39% over the past 18 months.
A 60% majority of respondents say increased workloads negatively impact reliability; up 15% percentage points since 2017. Of that 60%, approximately 80% of firms experiencing reliability declines have commodity servers: e.g., White box; older Dell, HPE ProLiant and Oracle hardware >3 ½ years old that haven’t been retrofitted/upgraded.
Provisioning complex new applications that must integrate and interoperate with legacy systems and applications. Some 40% of survey respondents rate application deployment and provisioning as among their biggest challenges and one that can negatively impact reliability.
IT Departments Spending More Time Applying Patches. Some 54% of those polled indicated they are spending upwards of one hour to over four hours applying patches – especially security patches. Users said the security patches are large, time consuming and often complex, necessitating that they test and apply them manually. The percentage of firms automatically applying patches commensurately decreased from 30% in 2016 to just 9% in the latest 2018 poll. Overall, the latest ITIC survey shows that as of July 2018 companies are applying 27% more patches now than any time since 2015.
Deploying new technologies like Artificial Intelligence (AI), Big Data Analytics which require special expertise by IT managers and application developers as well as a high degree of compatibility and interoperability.
A rise in Internet of Things (IoT) and edge computing deployments which in turn, increase the number of connections that organizations and their IT departments must oversee and manage.
Seven-in-10 or 71%of survey respondents said aged hardware (3 ½+ years old) had a negative impact on server uptime and reliability compared with just 16% that said the older servers had not experienced any declines in reliability or availability. This is an increase of five percentage points from the 66% of those polled who responded positively to that survey question in the ITIC 2017 Reliability Survey and it’s a 27% increase from the 44% who said outmoded hardware negatively impacted uptime in the ITIC 2014 Reliability poll.

Corporations Minimum Reliability Requirements Rise

At the same time, corporations now require higher levels of reliability than they did even two o three years ago. The reliability and continuous operation of the core infrastructure and its component parts: server hardware, server operating system software, applications and other devices (e.g. firewalls, unified communications devices and uninterruptible power supply) are more crucial than ever to the organization’s bottom line.

It is clear that corporations – from the smallest companies with fewer than 25 people, to the largest multinational concerns with over one hundred thousand employees, are more risk averse and concerned about the potential risk for lawsuits and the damage to their reputation in the wake of an outage. ITIC’s survey data now indicates that an 84% majority of organizations now require a minimum of “four nines” – 99.99% reliability and uptime.

This is the equivalent of 52 minutes of unplanned outages related to downtime for mission critical systems and applications or just 4.33 minutes of unplanned monthly outage for servers, applications and networks.

Conclusions

The vendors are one-half of the equation. Corporate users also bear responsibility for the reliability of their servers and applications based on configuration, utilization, provisioning, management and security.

To minimize downtime and increase system and network availability it is imperative that corporations work with vendor partners to ensure that reliability and uptime are inherent features of all their servers, network connectivity devices, applications and mobile devices. This requires careful tactical and strategic planning to construct a solid strategy.

Human error and security are and will continue to pose the greatest threats to the underlying reliability and stability of server hardware, operating systems and applications. A key element of every firm’s reliability strategy and initiative is to obtain the necessary training and certification for IT managers, engineers and security professionals. Companies should also have their security professionals take security awareness training. Engaging the services of third party vendors to conduct security vulnerability testing to identify and eliminate potential vulnerabilities is also highly recommended. Corporations must also deploy the appropriate Auditing, BI and network monitoring tools. Every 21^st Century network environment needs continuous, comprehensive end-to-end monitoring for their complex, distributed applications in physical, virtual and cloud environments.

Ask yourself: “How much reliability does the infrastructure require and how much risk can the company safely tolerate?”

ITIC Poll: Human Error and Security are Top Issues Negatively Impacting Reliability Read More »

ITIC 2018 Server Reliability Mid-Year Update: IBM Z, IBM Power, Lenovo System x, HPE Integrity Superdome & Huawei KunLun Deliver Highest Uptime

2018, ITIC Reports & Surveys / By Laura DiDio

August 8, 2018

For the tenth straight year, IBM and Lenovo servers again achieved top rankings in ITIC’s 2017 – 2018 Global Server Hardware and Server OS Reliability survey.

IBM’s Z Systems Enterprise server is in a class of its own. The IBM mainframe continues to exhibit peerless reliability besting all competitors. The Z recorded less than 10 seconds of unplanned per server downtime each month. Additionally less than one-half of one percent of all IBM Z customers reported unplanned outages that totaled greater than four (4) hours of system downtime in a single year.

Among mainstream servers, IBM Power Systems 7 and 8 and the Lenovo x86 X6 mission critical hardware consistently deliver the highest levels of reliability/uptime among 14 server hardware and 11 different mainstream server hardware virtualization platforms. Each platform averaged just 2.1 minutes of unplanned per annum/per server downtime (See Exhibit 1).

That makes the IBM Power Systems and Lenovo x 86 servers approximately 17 to 18 times more stable and available, than the least reliable distributions – the rival Oracle and HPE ProLiant servers.

Additionally, the latest ITIC survey results indicate just one percent of IBM Power Systems and Lenovo System x servers experienced over four (4) hours of unplanned annual downtime. This is the best showing among the 14 different server platforms surveyed.

ITIC’s 10^th annual independent ITIC 2017 – 2018 Global Server Hardware and Server OS Reliability survey polled 800 organizations worldwide from August through December 2017. In order to obtain the most accurate and unbiased results, ITIC accepted no vendor sponsorship. …

ITIC 2018 Server Reliability Mid-Year Update: IBM Z, IBM Power, Lenovo System x, HPE Integrity Superdome & Huawei KunLun Deliver Highest UptimeRead More »

ITIC 2018 Server Reliability Mid-Year Update: IBM Z, IBM Power, Lenovo System x, HPE Integrity Superdome & Huawei KunLun Deliver Highest Uptime Read More »

IBM, Lenovo Servers Deliver Top Reliability, Cisco UCS, HPE Integrity Gain

2017, ITIC Reports & Surveys, Laura's Insights ITIC Blog / By Laura DiDio

IBM z Systems Enterprise; IBM Power Systems Servers Most Reliable for Ninth Straight Year; Lenovo x86 Servers Deliver Highest Uptime/Availability among all Intel x86-based Systems

For the ninth year in a row, corporate enterprise users said IBM’s z Systems Enterprise mainframe class server achieved near flawless reliability, recording less than 10 seconds of unplanned per server downtime each month. Among mainstream servers, IBM Power Systems devices and the Lenovo x86 platform delivered the highest levels of reliability/uptime among 14 server hardware and 11 different server hardware virtualization platforms.

Those are the results of the ITIC 2017 Global Server Hardware and Server OS Reliability survey which polled 750 organizations worldwide during April/May 2017.

Among the top survey findings:

IBM z Systems Enterprise mainframe class systems, had the lowest incident – 0% — of > 4 hours of per server/per annum downtime of any hardware platform. Specifically, IBM z Systems mainframe class servers exhibit true mainframe fault tolerance experiencing just 0.96 minutes of of unplanned per server annual downtime. That equates to 8 seconds per month or “blink and you miss it,” 2 seconds of unplanned weekly downtime. This is an improvement over the 1.12 minutes of per server/per annum downtime the z Systems servers recorded in ITIC’s 2016 – 2017 Reliability poll nine months ago.
Among mainstream hardware platforms, IBM Power Systems and Lenovo System x running Linux have least amount of unplanned downtime 2.5 and 2.8 minutes per server/per year of any mainstream Linux server platforms.
88% of IBM Power Systems and 87% of Lenovo System x users running RHEL, SuSE or Ubuntu Linux experience fewer than one unplanned outage per server, per year.
Tenly two percent of IBM and Lenovo servers recorded >4 hours of unplanned per server/per annum downtime; followed by six percent of HPE servers; eight percent of Dell servers and 10% of Oracle servers.
IBM and Lenovo hardware and the Linux operating system distributions were either first or second in every reliability category, including virtualization and security.
Lenovo x86 servers achieved the highest reliability ratings among all competing x86 platforms
Lenovo Takes Top Marks for Technical Service and Support: Lenovo tech support the best followed by Cisco and IBM
Some 66% of survey respondents said aged hardware (3 ½+ years old) had a negative impact on server uptime and reliability vs. 21% that said it has not impacted reliability/uptime. This is 22% increase from the 44% who said outmoded hardware negatively impacted uptime in 2014
Reliability continues to decline for the fifth year in a row on the HP ProLiant and Oracle’s SPARC & x86 hardware and Solaris OS. Reliability on the Oracle platforms declined slightly mainly due to aging. Many Oracle hardware customers are eschewing upgrades, opting instead to migrate to rival platforms.
Some 16% of Oracle customers rated service & support as Poor or Unsatisfactory. Dissatisfaction with Oracle licensing and pricing policies remains consistently high for the last three years.
Only 1% of Cisco, 1% of Dell, 1% of IBM and Lenovo, 3% of HP, 3% of Fujitsu and 4% of Toshiba users gave those vendors “Poor” or “Unsatisfactory” customer support ratings.

…

IBM, Lenovo Servers Deliver Top Reliability, Cisco UCS, HPE Integrity GainRead More »

IBM, Lenovo Servers Deliver Top Reliability, Cisco UCS, HPE Integrity Gain Read More »

2011 in High Tech YTD Part 3: Cisco Pulls Plug on Flip, Focuses on Core Competencies

Laura's Insights ITIC Blog / By Laura DiDio

Cisco Pulls the Plug on Flip

Following two consecutive fiscal quarters, Cisco Systems shocked the industry three weeks ago with the news that it will cease to manufacture its popular Flip video camera and will lay off the division’s 550 workers, substantially reducing its consumer businesses.

Also within the past two weeks, Cisco unveiled a voluntary retirement program aimed at workers 50 years old whose age plus tenure at the company equals 60; these workers have from May 10 through June 24 to opt in. This is the first time in two years that Cisco instituted such a cost cutting policy.

Cisco recently hired Gary Moore as Chief Operating Officer to fine tune its re-focused initiatives. …

2011 in High Tech YTD Part 3: Cisco Pulls Plug on Flip, Focuses on Core CompetenciesRead More »

2011 in High Tech YTD Part 3: Cisco Pulls Plug on Flip, Focuses on Core Competencies Read More »