Gartner Echoes IDC's Numbers on Server Sales Slide

While Gartner and IDC never quite come up with the exact same numbers to describe worldwide server revenue and shipments for each quarter, they're usually pretty darn close. Gartner's findings earlier this year echo IDC's: Gartner says worldwide server revenue declined 24 percent in the first quarter of 2009 while shipments dropped 24.2 percent, compared to the first quarter of 2008. These were the most significant declines the server industry has experienced on a year-on-year basis, Gartner says.

"The significant decline that occurred in the fourth quarter of last year has extended into the beginning of this year," notes Jeffrey Hewitt, research vice president at Gartner. "While this was not unexpected, the severity of the decline was greater than predicted on a worldwide level."

He adds, "The ongoing weakness of the global economy affected all server segments. X86-based servers fell 23.9 percent in units and 27.1 percent in revenues. UNIX servers also were impacted in quarterly results with drops of 31.3 percent in units and 20.4 percent in vendor revenues."

Of the top five global vendors, IBM, Hewlett-Packard, Dell, Sun and Fujitsu/Fujitsu Siemens all had double-digit revenue declines for the first quarter of 2009, Gartner says. IBM continued to lead the worldwide server market based on revenue ($3 billion in server revenue with market share of 30.7 percent, up 1.4 percent year-over-year). While IBM retained the No. 1 position, it sustained a 20.4 percent revenue decline, with all of its server brands posting year-over-year decreases, Gartner notes.

In terms of shipments, HP led the pack despite a 22.3 percent decline, and all of the top vendors posted double-digit declines as well.

The least impacted server segment was X86 blade servers, Gartner says, which fell 20.6 percent in units and 19.5 percent in vendor revenue for the first quarter. All blade server shipments declined 19.1 percent, and revenue decreased 13.8 percent.

Overall, Gartner expected similar lackluster server sales and shipments in the second quarter of 2009, and the research firm doesn't expect any significant turnarounds until 2010.
—Chris Maxcer, News Editor

Credit Card Tokenization: Watch the One Basket with All Your Eggs in It

System iNEWS editors chatted with Gartner analyst John Pescatore to learn about credit card tokenization. Pescatore, who specializes in Payment Card Industry Data Security Standard (PCI DSS), encryption related to PCI DSS, and overall security of Internet systems for Gartner, explained that tokenization can reduce a company's odds of a data breach as well as the cost and complexity of PCI DSS compliance and auditing. Here's what he said:

"The basic issue we've seen from enterprises is that the PCI mandate says that certain types of data have to be masked or encrypted. However, encryption does carry costs and complexity, plus the real issue is that what businesses really need to do is minimize the number of places where they store the credit card data—because in order to encrypt card data, you need encryption keys. If you're storing this data in more places than you need, the odds get higher that your keys will get compromised. So in the past couple of years, we've seen a lot of movement away from blind encrypting.

"Companies can keep their sensitive data in one database and use tokenization for other applications that need to look up credit card-related data, thereby reducing the odds of a data breach. What's more important to most enterprises, however, is that now all those servers on which they used to store the sensitive data are no longer part of the PCI audit, because the only systems in the scope of the PCI audit are the systems that store and process the sensitive data. So what tokenization really does is limit the scope of the PCI audit, which reduces the cost of the audit and the cost of dealing with the audit.

"What it really gets down to is that there's some public ID and some sensitive value, and what you want to do is break the association between the public ID and the sensitive information. So tokenization or encryption are definitely technologies that, on any of these privacy issues, can be used to break that association. The benefit of tokenization is that it reduces the complexity of handling the keys of encryption.

"Here's one key issue: We have standards for encryptions. Tokenization—no standards for that yet. The tokenization vendors have to pay an outside security firm to test their solution. Probably the PCI will come out with guidelines for tokenization in the next year or so, so that there will be some way to certify tokenization."
—Linda Harty, Executive Editor

Top Concerns Released by COMMON Europe

The results of COMMON Europe's global annual Top Concerns survey are in: The survey showed that "Satisfy internal customers" and "Treat data security and confidentiality as a business risk" are the topmost concerns for worldwide Power System/System i or other IBM systems' users. They are followed by "Improve IT security and continuity," "Receive consistent high quality service and support from vendors," "Keep the skills current for the existing staff," and "Make me grow as a more competent individual." Surprisingly, COMMON Europe notes, "Correctly measure the value of IT to business" and "Assure better datawarehousing" are 14 and 16 in a list of 16.

The survey gathered responses from 547 participants from Europe, Americas, and Australasia, including customers, IBM, IBM Business Partners, and ISVs. Last year's survey had 379 participants.

Participants also expressed their concerns that were not listed in the survey, COMMON Europe reports. "Better marketing of the System i, System i survival," and "Modernize applications" were the most frequently cited unlisted concerns.

COMMON customer responses to current issues were:

• IT running budgets in 2009: 39% decreased, 9% increased, 8% stable and 44% do not know
• New projects investment 2009: 40% decreased, 12% increased, 11% stable and 36% do not know
• Migrate in 2009 to IBM i 6.1: 9.0% already done, 4.2% ordered, 28.2% planned, 45.1% not yet, 7.6% not user and 5.9% no information
• Migrate in 2009 to Power Systems: 23.9% already done, 1.7% ordered, 13.0% planned; 40.8% not yet; 14.1% not user and 6.5% no information
• Migrate in 2009 to Blades with IBM i 6.1: 2.3% already done, 1.1% ordered, 4.5% planned, 56.6% not yet, 28.2% not user and 7.3% no information

COMMON Europe also held its first Top Academic Concerns Survey for IBM Academic Initiative participants. The preliminary analysis showed that "Free academic System i certification (for students)" and "Recycle used systems for students (instead of destroying them)" are the topmost academic concerns for the participating students. They are followed by "Discounted IBM professional certifications for students," "Free or discounted attendance to conferences for students," and "Easier access to demo and training IBM Power Systems."
—Chris Maxcer, News Editor

Rochester Newspaper Reports IBM Layoffs

The Post-Bulletin in Rochester, Minn., reported in June that at least 68 IBM employees were laid off earlier this year from the Rochester facility where IBM i technologies originate.

The newspaper quoted an official with Rochester's Workforce Development office, who said that 68 people attended a meeting at IBM that was held by the office's Rapid Response team. Those 68 workers were helped in May by monies from the state of Minnesota that were earmarked for education and training. That money will now be covered by a $4.8 million National Emergency Grant from the U.S. Department of Labor.

Of course, we still don't know exactly what it means since the Rochester plant manufactures both IBM i and AIX-based Power Systems; but this reporter has heard suggestions through more than one grapevine that IBM was likely to let go of those employees who favored working on one platform rather than branching out to a more Power Systems-friendly workload.

Still, anyone who did get laid off probably got a pretty darn good assistance package from IBM, as Chris Maxcer reported in his May Industry Report, "IBM Posts Record Revenue, Yet Lays Off Employees—What Gives?" (article ID 63383). And now federal grant money is available for education and training assistance to laid off workers.
—Rita-Lyn Sanders, Senior Industry Editor

Japan's IBM BPs and Vendors Rise Up

A group of 71 IBM Business Partners and ISVs in Japan have joined forces to promote and actively provide valuable solutions for IBM i, which the group says is "the miracle in computer history."

The partner community in Japan banded together to launch the IBM i Manifest initiative for the Japan market. The initiative has three basic goals: revitalize the IBM i market in Japan and increase the customer installed base; assure IBM i customer organizations, resellers and ISVs selling IBM i solutions that IBM i will not only survive, but more importantly, continue to prosper; and inform the wider IT community of the unique value proposition of IBM i.

For the primary site—which is mostly in Japanese—check out iforum.ne.jp.
—Chris Maxcer, News Editor