IBM Denies Plans to Exit the x86 Server Business

By Jessica Davis  |  Print this article Print

IBM has moved to quell rumors that it's looking to get out of the x86 server market. IBM sent a memo to channel partners last week, blaming the rumors on competitors, and addressing questions about its licensing deals with Lenovo and Rackable Systems. IBM says it has a new go-to-market plan dubbed Project X to make channel partners more competitive in the x86 market.

IBM has moved to quell rumors that it's looking to get out of the x86 server market.

In a memo sent to channel partners on Jan. 26, IBM says it is in the x86 server business to stay, according to a report in The New York Times. The Times obtained the memo, and IBM confirmed its authenticity.

"IBM is not exiting or selling its x86 business," writes Adalio Sanchez, general manager of IBM's System x server business, in the memo to channel partners.

The memo states that rumors about IBM looking to get out of the business may have been started by IBM's competitors in the market, seizing upon the news that IBM has licensed some of its x86 server technology to Lenovo and Rackable Systems. 

Lenovo acquired IBM's PC business in 2005, and IBM has sold off other hardware divisions, too, choosing to instead focus on its computer services business. IBM's moves were widely viewed as an effort to get out of the commodity computer hardware business in favor of a business with higher margins.

Analysts everywhere have forecast dismal sales for computer hardware in 2009 as the ongoing recession has end customers pushing off PC and server refresh cycles once again.

But IBM's Sanchez says in the memo from IBM to channel partners that the company plans to stay in the industry standard server business.
"In the last few months competitors have tried to use IBM's licensing agreement with Lenovo to plant doubt in the marketplace about our commitment to the System x business," writes Sanchez. "When Lenovo (and Rackable) selected IBM technology (over the competition) it expanded IBM's x86 technology footprint, provided access to new markets and complemented our R&D commitment to the System x and BladeCenter product lines.

"Over the past 40 years IBM has continually used OEM/IP agreements to expand our technology footprints in semiconductors, UNIX, mainframes and systems software. It's just good business," Sanchez says.

IBM says it has launched a new go-to-market model called Project X, designed to better position IBM client teams and channel partners against the competition, and will soon brief channel partners on the plans.

"Don't let ANYONE get away with ANY attempts to dilute IBM's rock solid commitment to the System x business," Sanchez writes. "Time to fight back!"

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

Submit a Comment

Loading Comments...