(A Little Bit of) History Repeating… (II)

“The profits in bipolar/TCM-based mainframes have been under steady pressure from machines run by lower-cost microprocessors, using CMOS technology.

The price pressure as servers turn into commodity products has prompted the major server makers to move into software and services. They are particularly focusing on supplying the technology and expertise to operate corporate data centers more efficiently and with less power.

“For years, IBM has been fighting against the commoditization wave,” said an industry analyst…”

That is not the text of an article from 1995, but it could well have been. In that year, while at IBM, I worked on a project which involved spending a few weeks at the corporation’s Poughkeepsie plant in upstate New York (far nicer than it sounds, believe me!). While we were there, our project manager arranged a tour of the mainframe production facilities for us, and it was fascinating. The first 90 minutes of the tour took us through the TCM (Thermal Conduction Unit) manufacturing process, in which maximum processor density was achieved by mounting chips on a multi-layered ceramic substrate and water-cooling them via a heatsink encapsulated in helium. The ceramic substrate was essentially a 30-layer “mille feuille”, run through with a complex 3D array of tiny wires to interconnect the chips. Sometimes this array needed to be hand-patched – a job which skilled operators could do using binocular microscopes and micro-manipulators for a maximum of about half an hour before having to take a break. From there, we went to look at the plumbing which was built into the mainframes to carry all that heat away.

If that sounds complex and expensive, you’re getting the picture.

The last 10 minutes of the tour was a brisk trot from one end to the other of a gymnasium-sized hall in which mainframe parts arrived at one end, in cardboard boxes, and completed servers were collected from the other. This was the CMOS mainframe range under construction. It was an assembly line, with little or no specialist labour and no custom-built parts. I could not have been shown a clearer illustration of why the bipolar technology was losing market share so fast to the new CMOS machines. You might as well wonder why all cars today don’t still have hand-beaten radiator grilles like a Rolls Royce.

Oh – and here’s the real version of that quote I Bowdlerised above… from the NY Times today.

“The profits in proprietary servers have been under steady pressure from machines run by lower-cost microprocessors, made by Intel and Advanced Micro Devices, using personal computer technology. The leading makers of these industry-standard servers are Hewlett-Packard and Dell.

The price pressure as servers turn into commodity products has prompted the major server makers to move into software and services. They are particularly focusing on supplying the technology and expertise to operate corporate data centers more efficiently and with less power. […]

“For years, Sun has been fighting against the commoditization wave,” said Nicholas G. Carr, an industry analyst and author of “The Big Switch,” a book published last year about cloud computing. “

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