Echoes of the migration bell rung by HP in 2001 are rattling some HP Unix customers loose. During a week when HP's business was considered a carcass by a MarketWatch analyst, news bubbled up on a website in the IBM world about a former 3000-migrating company that's now eliminating HP-UX customers. In a four-month period, hundreds of sites have been converted away from HP's enterprise-grade alternative to the 3000.
That Austin-based consultancy Sector7 has been an expertise resource for migrations since early in the 3000's Transition Era, midway through the previous decade. Some MPE experts have even consulted through Sector7. But even after [some part of] it was acquired by IBM, the company has been able to retain its business motif despite selling its consolidation business to IBM's Global Services group. That portion migrates IBM competitors' systems, whether just a database swap to DB2 or a shift onto IBM's iron in the Power Series. In this world, Unix is considered a legacy carcass.
According to a report at the blog System iNetwork, IBM achieved almost 200 competitive takeouts in the last quarter of 2011 off the HP Unix customer rolls. Each one of these takeouts averages about $1 million per displacement in revenues (although not for Sector7, as we're corrected below by Sector7's Jon Power). That's a yearly total of more than three-quarters of a billion dollars off the backs of HP's Unix, if the analysis from Pund-IT's analyst Charles King is to be believed. From the System i website:
Poaching customers when a competitor is weak is nothing new, and both HP and Oracle have programs to help customers migrate to its own solutions. Still, "I don’t know that any program has worked to the degree that IBM’s has," King says. "IBM is seeing accelerating numbers of migrations both from HP and Oracle. IBM basically has the right tools, and they have a very solid strategy in place to take advantage of uncertainty and concern [in the Unix-focused market]."
IBM and HP have been swiping each others' customers for years, dating back to the days when IBM tried to target HP 3000 shops with the AS/400-Series i systems. There were a few displacements announced around 3000 migrations, but that business didn't show much but exceptions that proved the rule of Windows. However, IBM has had some success selling the System i -- a cousin to the HP 3000 in its integrated design. Some Unix sites have switched to IBM's more proprietary and specialized solution.
Continued wrangling between HP and Oracle is doing little to bolster customers' confidence in the platform, In addition, HP's recently announced "Project Odyssey," which aims to "redefine the future of mission critical computing" by developing Superdome 2 systems that support both traditional Itanium servers and Xeon-based c-Class blades, could further confuse the issue.
Every company that's in the business of advising legacy customers strives to portray itself as vendor-agnostic and a trusted partner. IBM even uses that language in describing the Sector7 services. The term "Trusted Advisor" was used in HP's strategic pitches to the 3000 base, before its 2001 migration bell got rung. Both Oracle and HP are serving up those displacements each quarter to IBM's trustees. The scrap between Oracle and HP -- which triggered the Itanium slowdown and Odyssey -- clouds the future for both of these legacy providers.
"Even if HP succeeds or Oracle capitulates," King says, "customers will wonder how deeply or effectively a forced cooperation will extend."