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The Way Business Is Moving

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Issue Date: June 2007

MarketWatch: the persistence of Unix

June 2007
Timothy Prickett Morgan

In the physical world, a number of different forces are at play, and each in turn displays supremacy, or at least relevance, at subatomic, atomic, molecular, and wider levels. The weak force allows quarks to change form, and enables, among other things, nuclear fusion inside the sun; the strong force binds the nuclei inside atoms together, and the electromagnetic force glues atoms and molecules together. Gravity is the weakest of the forces in some terms, but it warps space and tells matter how to move throughout it.

In business, inertia is probably the strongest force, but so are familiarity, expertise, comfort, and value. These forces also operate at different levels within an organisation, and they explain the persistence of Unix as a platform two decades after Unix servers first started appearing in commercial settings.
It is tough to argue that the collective Unix platform reigns supreme in the data centre, but it is safe to say that the remaining Unix platforms are certainly a preferred platform, if not the preferred platform, for mission-critical workloads in companies today. Look under the screens of an ERP system, and the odds are that sitting behind that system is a Unix box running one of a handful of databases. Unix machines from Hewlett-Packard, IBM, Sun Microsystems, and Fujitsu-Siemens are also popular in niche markets. These boxes are not the cheapest on the market, and with the triple whammy of Windows and Linux operating systems and very respectable X64 processors, it is reasonable to question whether or not the three remaining commercial Unix platforms can persist.
The answer, of course, is that AIX, HP-UX, and Solaris are very likely to be around for a very, very long time. People were ready to write off the mainframe 15 years ago, and while the role of the mainframe has been diminished at IT shops, IBM has been able to keep the mainframe relevant enough to justify its investments, and more importantly, to rake in lost profits on hardware, software, and services. For all of its talk about being platform-agnostic, it is probably safe to say that half or more of IBM's revenues are derived directly or indirectly from mainframes, and an even larger portion of its profits come from mainframes.
Good platforms persist, despite immense competitive pressures, and they do so because they evolve under pressure, or they die.
Two decades ago, just about every company that sold a proprietary server platform jumped into the Unix racket because it became obvious pretty quickly that open systems were something that businesses would want. And the high-performance, low-cost RISC engines in most Unix systems were another thing that they found attractive.
Unix machines meant having somewhat portable applications and a common set of programming and system administration skills that translated, more or less, along with the applications. This allowed nearly direct competition between vendors, which drove the price/performance curve for Unix boxes as hard as Moore's Law would allow, and sometimes maybe a little faster than was sensible given the limits of Moore's Law. All of the major Unix players from the previous two decades have screwed up their processor and server roadmaps at one time or another, and some of those vendors are now dead.
That Unix managed to capture even half of the worldwide server market at all, considering the alternatives, is somewhat stunning.
Various technical and economic pressures in the server market have made it more difficult for vendors to get the money they had planned on. Forecasting fortunes is easy, getting them is not so easy. In July 1999, for instance, as the Unix server market was roaring during the dot-com boom, analysts at IDC made some projections about the server market looking ahead five years.
At that time, they projected that the global server market would grow from $65bn in sales in 1998 to $89bn in 2003, and they said further that the Unix collective would get $37bn, or about 42% of the market. Windows, according to this projection, would account for $27bn in sales, or 30%, and other platforms would comprise the remaining $25bn.
Of course, nothing of the kind happened. Just like Unix was bolstered by a worldwide recession in the early 1990s, which spurred the move away from mainframes and minicomputers, the recession in the early 2000s pushed companies to rethink their Unix strategies and to instead deploy cheaper X86 servers running Linux or Windows.
What happened then, of course, would make Unix enthusiasts laugh except that many of them lost their jobs. Server sprawl ensued, and instead of having relatively expensive Unix machines that ran at 20% or 30% of their processing capacity, companies bought lots of cheap X86 and then X64 iron, which ran at maybe 5% to 10% of capacity. On a cost-per-unit-of-work basis, there was no improvement at all. And these days, when power and cooling are such big issues, it is no surprise that the more sophisticated virtualisation technologies embodied in the top Unix platforms are making companies rethink how they deploy applications in their data centres.
The fact is, no one wanted to predict the end of the dot-com boom, even if they could have, because IT vendors were making money hand over fist. When that bubble burst, there was no way that the server business was going to grow to $89bn by 2003.
According to IDC, worldwide server sales were $57,5bn in 1995, they grew to $60bn in 1996, peaked at $65bn in 1997, declined to $63bn in 1998, and declined further in 1999, because of the ERP-Y2K slowdowns, to around $61,5bn. Sales jumped to an incredible $67,5bn in 2000 because of the dot-com and telecom booms, and then crashed by 20% back down to under $50,1bn in 2001, about the same sales levels as 1994. In the middle of that post-9/11 recession in 2002, IDC figured that the server market contracted by another 11,6% to $44,3bn. The economies of the world recovered a bit in 2003, and sales of server gear rose to $46bn. But by this time, Linux was established as a cheaper alternative to Unix, with many of the same features and certainly the same look and feel. Over the past five years, Unix has been propped up first by IBM's aggressive sales, then by HP's transition to Itanium, and now by the stabilisation of the Solaris platform.
Here in 2007, Unix and Linux together can claim revenue share leadership over the Windows platform. In the first quarter of 2007, Unix platforms accounted for $4bn in sales, Linux servers comprised $1,6bn in revenues, and Windows platforms had $4,8bn in sales. If Linux is Unix, then Unix is still winning the money market share race. But Unix has been, at least for now, relegated to specific jobs, such as supporting big databases or the backbone of financial services, telecommunications, or other industries where companies are happy to pay a premium for using the Unix operating system and hardware platforms they know well.
And this, of course, makes perfect business sense. Inertia is not a bad thing always. It is a kind of energy that allows you to get through the days, weeks, and months and just get the work done. Change is very difficult for most organisations, and if they have the skills to make their current systems work efficiently, then changing to a so-called 'cheaper' platform for the sake of change is idiotic.
By the same token, Unix platforms have to compete directly with Windows and Linux platforms, and because these are now the volume platforms in the market, they have to offer more features, more reliability, and as many applications as they can muster to get those data centre dollars. And so far, the Big Three Unix players have kept their platforms relevant. IBM has focused on performance and price/performance, and will be second to none with its Power6 machines, once they are out. Sun has radically re-engineered its Sparc platform (a work in progress) and adopted X64 processors to play the price/performance game against other Unix players as well as against Linux and Windows. Sun has also taken on Linux directly by going open source with Solaris. And HP finally has decent performance with dual-core Itanium 9000 processors in its Integrity line, and has HP-UX v3, which is a high-performance operating system.
In short, do not count these Unixes out just yet. These three Unixes are forces in their own right, and they will have to be reckoned with.
Source: Computergram


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