When IBM’s Power Systems sales started to dip this past year, IBM’s Tom Rosamilia, senior vice president of IBM Systems & Technology Group, took immediate and decisive action. Rosamilia, Ginni Rometty (IBM’s president and CEO) and Steve Mills (IBM’s senior vice president and group executive, Software & Systems) needed to make a change at the helm of Power Systems—and they tapped Doug Balog to be the new general manager of Power Systems.

We profiled Doug Balog in our September 2012 issue. At that time, he had recently been promoted to the general manager position for IBM’s System z (mainframe organization). So why did IBM choose to move Balog so quickly from System z into Power Systems? According to Steve Mills, “We always have a number of executives in our lineup who have varying skills. In Doug’s case, he knows this technology and marketplace and has energy and drive.”

Truth be told, IBM has been through a similar platform-decline scenario before when mainframe sales dipped in the ’90s. To put the mainframe back on track, IBM needed to invest more heavily in mainframe innovation. And the same holds true in Power Systems. IBM knows it needs to maintain its installed base of AIX and “i” users while expanding into the Linux, cognitive computing (Watson) and other growth markets—especially analytics because Power Systems are so well-suited from a design perspective to process analytics workloads.

So, Rometty, Mills and Rosamilia knew exactly what credentials they were looking for. They needed someone who understood POWER technology and markets, but they also needed someone who could bring market-changing innovation to the Power Systems product line. Balog was involved in the early research and development efforts to bring Linux onto the mainframe; he brought IBM’s Blade Systems to market, and he was instrumental in helping IBM’s storage organization introduce several new tiering and cloud technologies. When Rometty, Mills and Rosamilia chose Balog, they knew he would need all these skills to turn Power Systems around.

The Road to Recovery: The New Power Systems Strategy

As the new general manager of IBM’s Power Systems line, effective July 1, 2013, Balog knew exactly what he had to do. “We need to refocus Power Systems to grow our Linux-on-POWER base; we need to expand the Watson base, as we’re now doing by introducing new call center applications on this platform; and we need to retool Power Systems to handle even larger data sets for analytics workloads,” Balog states.

“We just committed another $1 billion to Linux development and expansion,” he observes. “Our big challenge in Linux will be to get our customers to recognize Power Systems as the best choice when it comes to distributed Linux workloads.” The problem that Power Systems faces is that in the distributed server world of two- and four-way processors, Linux is almost always associated with x86-based systems. “We have to change that mindset,” Balog emphasizes. “We have to deliver more customer value with our platform—and more innovation.” Balog has been here before when he had to change the mindset of customers who were purchasing discrete x86-based servers and deploying them in “server farms.” In the mid-2000s, Balog launched IBM’s blade architecture and made IBM a blade market leader. “There’s a direct parallel between what I did then and what I need to do with Linux and Power Systems,” he states.

But Linux growth isn’t the only road to success that Balog and his team have planned for Power Systems. Within 90 days of Balog’s arrival in Power Systems, he and his team formulated a three-point strategy to grow Power Systems. The Power Systems organization is now focused on:

1. Expanding the breadth of Power Systems solutions and delivering client value with next generation applications and solutions for Big Data, social, mobile and industry applications
2. Opening POWER architecture to the industry to expand the POWER ecosystem while also leveraging open standards (such as OpenStack) to bring more open source solutions to the POWER platform
3. Reinforcing the POWER charter by demonstrating IBM’s long-term commitment to the POWER platform, including demonstrating the strong economics of the platform and driving leadership innovation.

“I’ve met with literally hundreds of AIX and IBM i clients to assure them that IBM is heavily committed to Power Systems in the long run. As I shared our strategy with them, these customers indicated they’re very much in support of it,” says Balog. “Why? Because we aren’t telling them that we’re running away from AIX or IBM i; we’re clearly showing them that we’re very much committed to these platforms. And we’re also showing them that we’re committed to bringing them innovative new solutions in the future.”

Another important investment in innovation is IBM’s integration of Power Systems with IBM’s DB2 BLU Acceleration and Flash storage technologies to create a powerful, highly integrated POWER-based business analytics environment. Further, IBM is broadening the reach of its Watson artificial intelligence environment—expanding from initial forays in the medical and financial fields into client engagement call center support. This Watson environment runs exclusively on massively parallel POWER technology and systems architecture and represents a potential hot growth market for IBM. In cloud computing, IBM will soon be delivering enhanced virtualization and cloud capabilities that include new tools to monitor and optimize performance—and new, advanced virtualization management facilities that leverage the emerging open cloud standard environment (OpenStack) to expand the Power Systems cloud ecosystem. All these activities demonstrate “a serious effort on our part to bring clients value around POWER,” according to Balog. 

As for IBM’s “open platform” efforts, the company recently announced it will open its POWER architecture to allow outside hardware and software vendors to bring their own unique POWER solutions to market. IBM’s OpenPOWER consortium, which currently includes IBM, Mellanox, Google, NVIDIA and TYAN, will start to deliver OpenPOWER solutions this year with the introduction of IBM’s next generation POWER processor—the POWER8. In addition to consortium activities, IBM is leveraging open standards such as OpenStack and KVM (Kernel-based Virtual Machine, an open virtualization hypervisor) to help customers deploy low-cost open solutions on Power Systems platforms. “We’re committed to openness from a consortium perspective, and we’ve also opened porting centers to help our partners build open solutions for the platform and software stack,” says Balog.

The final leg of IBM’s three-prong strategy is focused on reinforcing IBM’s long-term commitment to Power Systems and POWER architecture. Balog calls this initiative the “Power Charter.” “Its goals are to drive leadership and innovation for core business and new applications; to demonstrate the strong economics of Power Systems; and to ensure that a strong ecosystem of skills and solutions remains in place to support Power Systems long into the future,” says Balog.  “We’re bringing [our customers] innovation based on the fact that, as infrastructure people, we know that applications are being written based on low-budget software and easy-to-deploy software. We want to make it easy to deploy these types of applications on our Power Systems.”

New Announcements

On Oct. 7, 2013, IBM’s Power Systems organization announced several new products and technologies, including:

• Three new solution editions; integrated turnkey, cost-reduced, packaged solutions designed to simplify the deployment of a given solution for IBM customers. These new solutions include the IBM BLU Acceleration solution-Power Systems Edition (described earlier); the IBM Intelligent Operation Center-Power Systems Edition, a turnkey smarter cities analytics solution designed to help cities better manage their resources; and a solution edition for service providers that speeds cloud deployment and delivery and includes utility-based pricing.
• A slew of new virtualization/cloud tools, including enhancements to PowerVM and IBM’s SmartCloud Entry environment, as well as PowerVP, an innovative new virtualization performance analyzer, and PowerVC, an advanced virtualization management environment based on OpenStack 
• IBM’s new “enterprise pool” concept. Enterprise pools enable processor and memory to be dynamically moved so workloads can keep running while other parts of an information system are being maintained.
• Integrated Facility for Linux (IFL) functionality is being placed on Power Systems. To build an IFL solution, IBM takes one of its microprocessor technologies (in this case, a standard POWER processor) and rewrites the microcode to provide optimized support for the Linux operating environment and related applications. The availability of IFLs on Power Systems is particularly important because Linux represents a strong growth opportunity for the Power Systems organization; at present, 37 percent of IBM’s mainframe base is using IFLs, and Balog is hoping for an even stronger adoption over time on Power Systems.

Power Is Here to Stay

Part of the slowdown in Power Systems adoption was caused by a substantial drop in sales revenue derived by migrating competing servers such as RISC-based Oracle’s SPARC line of servers and Hewlett-Packard’s EPIC-based Itanium line to Power Systems. For a few years, the IBM sales force has been feeding on these “low-hanging fruit” opportunities. But as one IBM sales representative put it at a recent IBM conference, “That fruit is much higher up now.” To grow, IBM needs to continue to harvest the competitive migrations while expanding Power Systems’ reach into cloud, analytics, security and other markets. 

IBM’s big challenge ahead is to maintain its sales revenues as it launches its new Linux, Watson, analytics and cloud initiatives. Fortunately for IBM, it has a successful model to follow—the renaissance of mainframe architecture. According to Balog (who directly participated in this renaissance), “This is a long journey play—as we saw on the mainframe—one that we certainly believe we’re where we want to be; ramping from a small start over the years to something we expect to be quite significant.”