IBM has not exited the midrange enterprise server market, just the X86 segment

On August 22, 2014, IBM® announced a program to encourage Big Data and Cloud app development by Linux ISVs for its Power Systems servers. So it should be safe to say, despite selling their X86 hardware server business to Lenovo, IBM is still very much committed to a business strategy segment built around computing hardware architecture.

The notion of encouraging 3rd party application development for IBM’s branded hardware makes sense, but the past history of how well IBM has executed on similar opportunities is spotty, at best. The biggest example of IBM missing on these efforts, of course, can be found in the history of what once was known as the “IBM PC”, which is presently referred to simply as “PCs”. After first opening the market for an operating system, at the application layer, for its X86 processor architecture, in 1981; then partnering with Microsoft® for the O/S, and, later Intel® for mass production of chips running the supporting X86 firmware; IBM found itself exiting the entire business a short 6 years later in 1987. Somehow IBM failed to deliver on the promise of this device, to its own detriment.

Similar patterns of awkward relationships with third parties can be found in the history of what was once IBM’s core revenue segment — the mainframe computer. Almost all of the 3rd party developers for IBM’s mainframe platform have vanished. A brief look at the website of one of these, Cullinet (actually Cullinet came to life on hardware manufactured by GE, but later received a port over to the IBM mainframe) provides the telltale markers repeated many times, by other 3rd party ISVs writing solutions for IBM’s mainframe platform, over the years.

At the same time, the history of the core components of IBM’s Power System Server hardware (principally AIX) has been less than a complete success. Perhaps the promise of attractive margins is worth the effort represented by a program like the one IBM announced on August 22, but if IBM reverts to its familiar pattern of positioning its own mainframe computer line as a better solution to this midrange, distributed computing platform, the program results are likely to be disappointing.

Once again, watching the rollout of this program should be high on the list of activities worth some time for anyone with a substantial interest in IBM.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

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