Taking on the Competition
Using IBM ~ xSeries to Compete with
Confidence
This presentation is intended for the education of IBM and Business Partner sales personnel. It should not be distributed to customers.
Topic #: Topic Title
Topic Objectives and Benefits
By the end of this topic, you will be able to:
Discuss today's competitive environments
Give an overview of the customer’s current issues
Describe the Competition – Sun / Dell / HP
• Target
• Defend
• Leverage
• Special forces: Competitive Resources
Prepare for competitive engagements
• Technical Advantage and customers impact
• Alliance Advantages: Strategies
► Linux,
Microsoft, Intel and more
Benefits of this topic include:
• Increased knowledge (Consulting)
• Increased competitive win percentage
Topic #: Topic Title
Competitive environment in a tight economy
To grow we must take share from competitors
Dell and IBM are making the biggest impact
Customers focused on their IT spending
Many are looking at the entire budget
Purchases must show quick return on investment
• Consolidation
• Outsourcing
• Centralized vs. decentralized
Increase utilization of IT staff
We cannot afford to only push boxes.
Topic #: Topic Title
Top Priorities – Understand the Customer
What are their hot issues?
• Reducing costs? Higher availability? Doing more with limited staff?
• Lead them, using understanding of our advantages
What projects are they going to be starting?
What applications are they running or plan to run?
What type of servers are they running them on?
What are the +’s and –’s of their current vendor?
Missing the first step often leads to missed opportunity!
Topic #: Topic Title
Top Ways To Win in Competitive Situations
Get into the account early
Understand the customer
Solution
involvement
• Applications (ISV), eServer portfolio, Storage, PCD
• Linux
• Consolidation - Scale up and out
Get
customer to look at all costs
• All purchase - HW, SW, options, services, maintenance
• Impact to other IT costs - easy to deploy, manage, etc..
Leverage technology advantages
Leverage resources
Missed steps often lead to missed opportunity!
IBM ~ xSeries vs. Sun
Competitive Summary
Understand and Target
Topic #: Topic Title
What is going on at Sun?
Company
• Perceived as arrogant
• Big changes in executive leaders
• Declining market share
• More expensive
ISV Changes
• More focus is on Windows vs. UNIX
• Growing ISV interest in Linux
Products
• Parity (at best), increasing reliability issues
• Software suite under scrutiny
• Users question “one-size-fits-all” strategy
• "Tip-toe" into Linux
The "Sun" has set ... let's show customers the light!
Topic #: Topic Title
Fighting the Rising Tide of Intel & Linux
Attack pricing of Intel server space (V480 / V880)
• Use Windows pricing vs. Linux
• Select configuration difficult for Intel vendors to match
• Offer only 1 year as base warranty, make sure of a similar comparison
• Want customers to look at SW support cost based on 1 unit
Linux play (LX50)
• Trying to fragment Linux world with "branded" version
► Open
door with Sun Linux, then push Solaris
► Trying to position Solaris and Linux as the same
► Good possibility Sun Linux will diverge from Red Hat
• Old technology and older Solaris 8 support
► Extreme
pressures put Solaris 9 support in the plans
Intel and Linux have Sun on the defensive.
Topic #: Topic Title
IBM ~ xSeries vs. Sun
4-way
V480
4-way
Blades
x255
x440 Xeon
IBM ^
BladeCenter
x360
8-way to 16-way
2-way
Ultra 250
x235
280R
x345
Sun
LX50
Sun Fire
V120
Sun Fire
V100
Fire 4800
14-way
x335
Uni
x305
Fire 3800
8-way
V880
8-way
x440
4 to16-way
Topic #: Topic Title
Strategies Against Sun
Select a strategy
• Which Series? (If pSeries, don't forget xSeries)
• Linux is "UNIX" skills or Windows if "already support Windows"
Low price and cost of ownership
• Leverage analyst studies
• Leverage customer references
• Costs - software licenses (Linux), maintenance, warranty, upgrades
• Reduced footprint and power consumption
Technical leadership
• Modularity and Investment protection "Pay as you grow" scalability
• High Availability - Active Memory and Active PCI
Target clustering environments - low entry & incremental cost
Application flexibility in the Intel space
No one size fits all - eServer has complete portfolio
Commitment to "e-business on demand" (open standards)
Leverage the savings!
Topic #: Topic Title
Customer Examples
Large Financial Institution - Server Consolidation
• 1/5 the cost, 4 times the performance at 10% the size
• Leverage: ITS Optimization Practice & TCO Studies, RedHat, FAStT
storage, cable chaining, IBM Director, XCAT
Financial Institution - Trading Floor
• 1/30 the costs (TCO)
• Leverage: LTC, RedHat, rack density and Blade Strategies
Cluster Customer
• 16 times superior price/performance
• Leverage: Linux Impact team and visit another customer
While Sun talks…IBM xSeries delivers!
This data was gathered by sales personnel and/or customers and represent one customer's experience. Other
customer results will vary. IBM employees can use the customer reference database to contact your peer.
Topic #: Topic Title
IBM Wins eTrade with xSeries and Linux
Incumbent Systems: Sun 4500
TCO Advantage: 1/12 the cost*
Performance Advantage: “Our new IBM eServer xSeries servers
are 4 times faster than the ones we replaced.”*
Leverage: Maintenance costs covered new system costs, Linux
Skill/Leadership, Open Source - Flexibility of Choice
The combination of IBM xSeries
servers and the IBM commitment to
Linux has saved the company
millions of dollars and has enhanced
the E*Trade Financial global brand.
*(Josh Levine, CAO, E*TRADE Group, Inc. 2002)
IBM ~ xSeries vs. Dell PowerEdge
Competitive Summary
Understand and Target
Topic #: Topic Title
What is Going on at Dell?
Getting customers to focus on purchase price
• Watch out for special Terms and Conditions (T&C’s)
► CNET:
"Gartner to Dell buyers: Read the fine print" 5/5/2002
► GartnerGroup 04/02: Dell purchase contracts: Prepare to negotiate
Using PC success to move up into servers and storage
• Able to increase wallet share from 10% to 50% in 2 yrs
Targeting HPQ and Unix
Claiming ease of doing business
• Purchase focused
• Killing IT staff
• Service for clients and servers is different
• Lacking solution optimization
Low price today, high cost tomorrow!
Topic #: Topic Title
IBM ~ xSeries vs. Dell PowerEdge
Universal (tower)
6600
Blades
x255
1655MC
IBM ~ BladeCenter
Rack-Optimized
x235
4600
8450
x440
6650
x360
2600
1600SC
x225
x205
600SC
2650
x345
1650
x335
350
x305
Topic #: Topic Title
Examples of success
Manufacturer
• Benefits: cost efficient, global fulfillment, control TCO
• Leverage: software certification and asset handling, financial options
and reduce spare parts/stock units
• Success: One Vendor (IGF, IGS, PCD and xSeries)
Oil Company – Cluster
• Benefits: stability, scalability and reliability
• Leverage: Price-point, number of xSeries Linux clusters already
proven, Business Partner and Linux solution team.
Another Oil Company – Cluster
• Benefits: increased process capacity 350%, reducing costs 50%
• Leverage: Top executives involvement, Business Partner, Linux and
solution price
This data was gathered by sales personnel and/or customers and represent one customer's experience.
Other customer results will vary. IBM employee can use customer reference database to contact your peer.
IBM ~ xSeries vs. HP ProLiant
Competitive Summary
No such thing as Compaq ProLiant,
it is now HP ProLiant
Topic #: Topic Title
What Is Going On At HP?
Pushing openness vs. IBM's proprietary approach
Leveraging market share success and perceived technology
leadership
• Often focus on technology and lifecycle cost vs. purchase price
Claiming IBM will take control vs. team approach (ISV & partners)
Claiming better customer experience across the engagement
lifecycle
• A race to see who can effectively sell solutions
Claiming deeper and broader technical expertise
Pushing hard on IA-64 (lack of IA-32 high end)
• Playing down x440 and telling customers IA-64 is the better
• Years hyping their relationship with Intel on IA-64 development
• How will IA-64 focus affect future IA-32 ProLiant servers?
Don't let HP confuse!
Source: Ann Livermore's presentation to
securities analysts on June 4, 2002
Topic #: Topic Title
IA-64 Server Forecasts
IA-64 has yet to meet projections, with successive forecasts
significantly reducing and delaying expected deployment.
• Performance issues
• Software support lacking
• Current role of RISC and IA-32
IA-32
• Intel required to shift / renew focus
on IA-32 in response to IA-64 issues
and competition
IA-64 Server Forecasts
IA-64
IBM strategy:
• 64-bit POWER - midrange market
• IA-32 xSeries EXA chip set
• IA-64 xSeries EXA chip set for
select applications
40
Customer Revenue ($B)
June ‘97
June ‘98
Aug ‘99
June 2000
June 2001
Oct ‘01
Mar ‘02
30
20
10
0
1999 2000 2001 2002 2003 2004 2005
Source: IDC projections
Topic #: Topic Title
IBM ~ xSeries vs. HP Intel Servers
Universal (tower)
Blades
ML 570 G2
x255
IBM ~ BladeCenter
Rack-Optimized
ML530 G2
x440
x235
ML370 G3
ML350 G3
ML310
TC2110
TC2100
DL580 G2
DL380 G3
x360
x345
x225
x205
DL360 G3
DL320 G2
x335
x305
Topic #: Topic Title
Success stories
A processor manufacturer
• Benefits: improved productivity, reduced expenses, increase
performance 1.5-5 times, saved millions and better space usage.
• Leverage: Relationship and competitive price
A Canadian Manufacturing Company
• Benefits: - reduced downtime 50%, more productive users, reduce IT
costs, reduced help desk calls
• Leverage: solution capability, technology and business partner
Automotive Dealer in India
• Benefits: - Improved dealer satisfaction, better cost control and
reduced paperwork
• Leveraged: IBM, long term partner, comprehensive solution
(p/xSeries, storage & Tivoli) and technology.
This data was gathered by sales personnel and/or customers and represent one customer's experience. Other
customer results will vary. IBM employees can use customer reference database to contact your peer.
Topic #: Topic Title
Strategy Against Dell/HP
Sell Solutions
Focus on winning in the 4-way and above space
• SAP, SAS, JDE, SQL, Oracle, UDB, and "Vertical Citrix"
• Leverage - price, performance and technology leadership
Rack 1U/2U space, include cables & switches into price
• Add up to $11,000 for a rack of 42 systems
• Think of the resources required to install and manage
Scale out with BladeCenter
• BladeCenter - Intel relationship, blade performance and high availability
• Maximum density / performance with BladeCenter
► Rack
price $59K vs. HP $52K, 84 blades vs. 48, Xeon vs. Pentium III
Reducing IT costs
• IBM Director has clean integration and full set of offerings
• Technology Leadership - helps reduce costs & increase availability
• Get the customer to include software support into price
Emphasize low cost when possible!
Topic #: Topic Title
Strategy Against Dell/HP
Get customers to take advantage of our technologies and tools
IBM Director and Server Plus Pack
ServerGuide and Remote Deployment Manager
Cabling Technologies (IBM ACT or C2T)
Scalability Offerings (x440 or BladeCenter)
Cross-sell IBM
PCD - stop competitors from up selling
Services - keep technical influencers on IBM sides
Financing - keep knowledge of leasing updates in house
Storage - most servers today are hooked up to external storage
eServer – most customers have heterogeneous environments
• 83% of iSeries customers have Intel servers (sell IXA)
Emphasize low cost when possible!
Succeeding Against the Competition
Topic #: Topic Title
Intelligence Resources
xSeries Competitive Sales Tool
• Designed to provide the concise info needed by successful sales reps
Competitive Information
• System Sales - Compete Packs (Dell, HP, Sun, etc..)
• COMP - WW Portal for Competitive Info. on HW, SW and services
• Competitive Big Play Sales Kit - leverage multiple parts of IBM
using marketing programs, tools and materials to win
Focus on Cost of ownership and Return on Availability
• Use the ROA Tool - to add $ value to IBM technology differentiation
• Use the TCO Tool - to point out areas for consolidation
Competitive Sales Assistance
• Competeline - 1-888-426-5525 #4 or LA call: T/L 445-9700
• Americas Competitive Sales team
• BPs call PartnerLine - 1-800-426-9990
Topic #: Topic Title
xSeries Competitive Sales Tool
Up-to-date competitive information at your fingertips, no matter where
you are. Provides links to more competitive information.
Overviews xSeries products
• Systems Management
• BladeCenter
• Options and Services
• FAStT
Provides
sales tips by product
• Overcoming Objections
• Selling up and Options
• Selling Solutions and
key solutions by product
Covers
• Competing vs. Dell and HP and head-to-head comparisons
• xSeries Linux and Microsoft advantages
Help leverage skills maximize IT resources
Help lower costs save dollars today and over time
High Scalability investment protection for future growth
High Availability keep up and running
Help Reduce Costs and
Maximize Revenue
Not all Intel processor-based systems
are created equal
Topic #: Topic Title
IT Expenditures
Total Cost of Ownership for 200 users
Infrastructure
10.4%
Software
10.0%
HW
4.0%
Software
Support
HW
Infrastructure
Support
75.6%
Source: Yankee Group 8/27/02
Topic #: Topic Title
Help Leverage Skills Maximize IT Resources
Customer support staff issues
• Support staff is often a big portion of IT budgets
• Need for more skilled staff
• Faced with trying to do more with less
IBM can help IT…
• Reduce time spent configuring and deploying systems
• Avoid those costly hours going out to remote locations
• Reduce or avoid having to do physical asset management
• Reduce unnecessary reboots to prevent software aging
• Effective maximizing performance, utilization and up-time
• Use proactive management vs. reactive management
• Avoid having to take servers off-line to perform diagnostics
• Manage a heterogeneous Intel-environment
Increase the capabilities of your IT staff!
Topic #: Topic Title
Better Relationship and Investment Protection
Reduce IT support time
• ServerProven
• Linux
► Linux
Technology Center
• Microsoft
► IBM
Center for Microsoft Technology
Investment protection
• Intel - Blades and XA chipset
• XpandOnDemand
► Extreme
I/O expansion capability - RXE-100
► Scale systems up and out (x440 and BladeCenter)
► Partitioning with VMware
Deploy smoothly, quickly and reliably!
Topic #: Topic Title
Other Savings
Cabling savings
• ACT - $80/server, $3K (42 units)
• C2T - $200/server, $10K (42 units)
• Think of IT staff savings in time
Power Savings
• Focus on BTU/hr vs. watts supported
Space Savings
Uni Tower
2-way Tower
4-way Tower
Uni Rack
2-way Rack
4-way Rack
8-way Rack
16-way Rack
IBM
Dell
HP
x205 - 20% less W
600SC
ML310
x225 - 25-63% less W 1600SC - 30% more W ML350 G3 - 25% more W
x235
2600 - equal
ML370 G3 - equal
x255
6600 - equal
ML570 - equal
x305 - 1U 25% shorter D
350 - 1U
DL320 G2 - 1U
x335 - 1U
1650 - equal
DL360 G2 - equal
x345 - 2U
2650 - equal
DL380 G2 - equal
x360 - 3U 33% less W
6650 - 4U
DL580 G2 - 4U
x440 - 4U 40% less W
8450 - 7U
DL760 - 7U
x440 - 8U
NA
NA
W – Width D – Depth
Topic #: Topic Title
Availability
Cause of Server Failures
Software
40%
Other
40%
Software
HW
Other
HW
20%
Source: Giga Network World 2/5/01
Topic #: Topic Title
Keeping Your Business Open 24x7
It is estimated that 20–25% of all unplanned downtime is caused by
server failure. (Gartner Group)
Minimum recovery time from server failure is typically 4.5 hours
The impact on costs is severe.
The Standish Group downtime due to server failures can cost
companies as much as $27,000/minute.*
Annual total cost of downtime in mission critical environments is
$4 billion for US businesses, average downtime event results in
$140,000 loss (Retail) and $450,000 loss (Securities industry)**
Server availability affects business results!
* Source: NetworkWorld 2/5/01
** Based on estimates from Network Computing (5/95)
Topic #: Topic Title
High Availability
Software
• Predicts software failures before they happen
► Monitors
for evidence of resource exhaustion and predicts time period
when software aging will bring down server
► 40% of downtime is due to software, IBM's tool is designed to help prevent
a substantial amount of that
Hardware
• Predicts failure before it happens (Extensive PFA)
► Identifies
failing component before failure up to 48 hours in advance of
actual component failure
• Instant visual identification of issues = rapid response
► Light
Path Diagnostics leads the technician to the specific components-even when powered down
Higher availability can = $avings!
* Gartner
Topic #: Topic Title
High Availability – More Hardware Features
Self-protecting memory features* ensure reliability of businesscritical applications
• Memory ProteXion, Chipkill and Memory mirroring
High Availability/Redundant** components help eliminate a single
point of failure
• Including mid-planes on BladeCenter
Run diagnostics on system resources, without impacting users
• Real Time Diagnostics
Superior cooling for faster performing new components
• Vectored cooling with variable speed fans
Higher availability can = more revenues!
* Select models ** some are optional
Topic #: Topic Title
Call To Action
Get in early
Take time to understand your customer
Make sure you understand the competition
Be part of the solution
Leverage current IBM relationships
Team with IBM peers & partners to build solutions
Utilize IBM resources
Communicate our advantages to customers
• Help reduce solution costs (Technology Leadership)
• Better use of IT staff and budget (Systems Management)
• Better investment protection (scale up and out)
• Reduce costs / maximizing revenue (availability leadership)
• Sell solutions
Available only one place – IBM!
Topic #: Topic Title
Legal notes
Competitive information based on publicly available information and is subject to change without
notice. Contact the manufacturer for the most recent information.
© IBM Corporation 2002. All rights reserved.
IBM Server Group, Department LO6, 3039 Cornwallis Road, Research Triangle Park, NC 27709
IBM reserves the right to alter product offerings and specification at any time. IBM makes no
representations or warranties regarding third party products or services. IBM is not responsible
for photographic or typographic errors.
IBM, the e-business logo, the IBM logo, Active PCI, Active Memory, AIX, Chipkill memory,
HelpCenter, iSeries, IntelliStation, BladeCenter, LAN Client Control Manager, Light Path
Diagnostics, Predictive Failure Analysis, pSeries, RS/6000, RISC, ServerGuide, ServerProven,
Tivoli, Xcel4, XpandOnDemand, xSeries, X-Architecture and zSeries are trademarks of IBM
Corporation in the U.S. and/or other countries.
Lotus and Domino are trademarks or registered trademarks of Lotus Development Corporation in
the U.S. and/or other countries.
Intel, Celeron, LANDeck, Pentium, Pentium III Xeon and Xeon are trademarks or registered
trademarks of Intel Corporation. Microsoft, Windows, Windows NT and the Windows logo are
trademarks or registered trademarks of Microsoft Corporation. Linux is a registered trademark of
Linus Torvalds. Java and all Java-related trademarks and logos are trademarks of SUN
Microsystems, Inc. UNIX is a registered trademark in the U.S. and/or other countries licensed
exclusively through The Open Group.
Other company, product and services names may be trademarks or service marks of others.
Miscellaneous Slides
Topic #: Topic Title
Power and Cooling Costs
All costs assume 24 x 7 operation (8,760 hours/year).
Power cost assumes $.08/KWH
Cooling costs assume 12,000 BTUs/Ton; 1.0548kj/BTU; 1.5
KW/Ton, $.08/KWH.
Formulas
• Power Cost ($) = rate ($.08/KWH) * Watts * 8760 (# of hours per year
operation) / 1000 (convert Watts to Kilowatts)
• Cooling Cost ($) = BTUs per Hour / 12000 (convert to tons) *1.5 (to
convert to Kilowatts) * rate ($.08/KWH) * 8760 (# of hours per year
operation)
• Standard conversion factor - BTUs per Hour = Watts * 3.413.
• Total cost for 3 years = (Power Cost + Cooling Cost) * 3 (years)
Power and Cooling Requirements from vendor websites, using
max. configurations.
Using IBM, Dell and HP max. BTU/hr numbers - from online
System Service Manuals and Product Guides
Topic #: Topic Title
8-way Price x440 vs. Dell PowerEdge 8450
IBM ~ xSeries 440 8687 - 4RX Rack
Two 1.5GHz, 512K L3 Foster, 2GB (512MB x 4) Std. Memory
6 x 1.5G 512KB L3 Procsr Upgr
($2,099/each)
SMP Exp. Module
IBM 73GB 10K Ultra160 SCSI Hot-Swap SL HDD (2x$1099)
512 MB PC133 ECC SDRAM DIMM (33L3324) (12x$499)
2 years addition annual maintenance 24x7 4hr same day response
Total Price
$18,099
$12,594
$5,199
$2,198
$5,988
$3,390
$47,468
Dell PowerEdge 8450
8x900 MHz Intel Pentium III Xeon Processor w/2MB Cache
8GB RAM 8X1GB DIMMs
2x 73GB 10K RPM Ultra 160 SCSI Hard Drive
Dell Remote Assistant Card 2.0
3Yrs Same Day 4Hr Response Parts + Onsite Labor (7x24)
Total Price
Incl
Incl
Incl
Incl
Incl
$70,065
Pricing from Dell website 11/18/02
Topic #: Topic Title
Maximum density / performance
BladeCenter Chassis Config
Qty
L is t
Ex t. L i s t
Compaq BL20p Chassis Config
Qty
L is t
Ex t. L i s t
BL20p Chassis Power
Qty
L is t
Ex t. L i s t
BL20p Blade+Chassis Subtotal
Qty
L is t
Ex t. L i s t
Compaq BL20p Blade Config
Blade Server Config
Blade+Chassis Subtotal
Qty
L is t
Ex t. L i s t
* Source: http://www.compaq.com/products/servers/platforms/index-bl.html
Topic #: Topic Title
Implementation and Cost Comparison
Cost per server for implementation
Number of
Servers
5
9
12
20
33
43
64
ACT
(requires 1 switch)
$291.55/server
$224.08
$203.00
$177.70
$162.75
$157.40
$151.61
KVM
(requires switch)
$316.80/server
$282.00
$275.25
$253.35
$237.27
$239.86
$241.73
Total Savings with
ACT over KVM
$126.25
$521.25
$867
$1513
$2459.25
$3545.75
$5768
What is needed to build a complete system
ACT Option
1 KCO per server + 1
4 port LCM
KVM
1 KVM cable per server plus the needed number of
switches/cascaded to accommodate all servers
Topic #: Topic Title
Eliminating costs (purchase, labor and utility)
42 Servers
CT2 Interconnect
KVM Switch Box
$0*
Cables
$54**
Total
$54
Standard KVM
$8,750 ($1458.34 x 6 eight port switches)***
$2,456 ($58.49 x 42)****
$11,206
Standard
server with
KVM
CT2
Interconnect
This...
or
this!
* Each x335 servers comes with a cable to chain to the next server.
** Each chain of 1 or up to 42 x335 servers must have one and only one of these cable kits. This kit includes the cable required to attach the last server in the chain to a monitor, keyboard and mouse.
*** Using the APC 8 port KVM switch (part number AP9278) priced at $1458.34 on www.cdw.com. Price verified 10/22/2002.
**** Using the APC KVM cable kit (part number AP9850) priced at $58.49 on www.cdw.com. Price verified 10/22/2002.
Topic #: Topic Title
Lower Power and Cooling Costs
Less internal heat = greater reliability of system components and
less heat vented externally, which results in lower ambient cooling
costs. Technology innovations help lower server power needs and
therefore lower electricity bills.
• x235 Lower power and cooling costs $1,829 vs. Dell's 2600's $2,724*
• x335 Lower power and cooling costs $660 vs. HP's DL360's $875*
Uni Tower
2-way Tower
4-way Tower
Uni Rack
2-way Rack
4-way Rack
8-way Rack
IBM
x205 - 550
x225 x235 - 2081 max.
Dell
600SC - 1137 max.
1600SC - 2275
2600 - 3100 max.
x255 - 3412 max.
x305 - 512 max.
x335 - 751 max.
x345 - 341 to 2200 max.
x360 - 3566
x440 - 2728
6600 - 4097 max.
350 - 898 max.
1650 - 1033 max.
2650 - 614
6650 - 3073 max.
8450 -
Expense $avings!
HP
ML310 - 1560
ML350 G3 - 1839
ML370 G3 - 2732
ML530 G2 - 2400
DL320 G2 - 682
DL360 G2 - 968
DL380 G3 - 1475
DL580 G2 - 4000 max.
DL760 - 5309 max.
* Based on 3-years, See detailed
calculation in appendix
