IBM In Talks To Sell x86 Server Business To Lenovo 202
FrankPoole writes "According to CRN, IBM is in serious negotiations to sell its low-end x86 server business to Lenovo, which is looking to grow its server revenue. If the deal goes though, it will be the second time in eight years that Big Blue has exited a major hardware business and sold the operation to Lenovo. IBM sold its PC business to Chinese computer maker in 2005."
MBA (Score:2)
Lenovo - a collector of IBM garbage (Score:4)
When IBM decides to throw away its garbage, Lenovo will come begging
Re:Lenovo - a collector of IBM garbage (Score:5, Insightful)
Actually, think of it a being "Business Recycling." IBM is selling it, because it can no longer run it as a successful business. Lenovo is buying it because they believe they can.
When large trash day comes around here at the ranch, there are always folks picking up stuff that I no longer need, but they think that they can do something useful with.
Comment removed (Score:5, Insightful)
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Also, markets can't be distorted very much by speculators. (In anything but the very short term.) They can skim off the middle if they are really good, but there i
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Also, markets can't be distorted very much by speculators.
Do you mean that AAPL is really worth more than Belgium?
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I would mod parent post as extremely insightful. I'm currently living in China and here you realize how expensive our daily lives over there have become. I mean cities like Shanghai are still expensive to the Chinese, but for us it's so extremely cheap that it makes you realize the kind of profits some companies in the West are making. Like I can get a job teaching English here that will pay around 10,000 RMB and I pay 4500 RMB in rent for a fancy studio apartment. Now I have a friend who has a part-time ar
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Actually, think of it a being "Business Recycling." IBM is selling it, because it can no longer run it as a successful business. Lenovo is buying it because they believe they can.
When large trash day comes around here at the ranch, there are always folks picking up stuff that I no longer need, but they think that they can do something useful with.
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IBM makes its money from large corporations, in the form of consulting fees, ERP and database support, High performance hardware beyond 64bit addressing and more. They also feel that with cloud services, that small business marketplace does not match their corporate objectives. Cut staff, keep the cream, and let the PC stuff for others. IBM does not want to make pennies from this marketplace, they want to make dollars from a smaller employee population, and from employees who are in 3rd world countries
Re:Lenovo - a collector of IBM garbage (Score:5, Informative)
IBM PCs were hardly garbage when IBM sold it. The ThinkPad line was highly regarded and the business as a whole was doing ok. The profits were low and declining but that was due to the cutthroat competition and commoditization of PCs rather than anything majorly wrong with IBMs.
Looks like Lenovo has done well since buying the Thinkpad line. They're the only PC maker with a pulse right now.
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Pre-fucked up Thinkpad (Score:2)
The Thinkpads that IBM designed (hell a lot of things that IBM designed) were high water marks for the industry. Lenovo assembled them but they have not shown me that they, as a company, are anymore committed to producing such a high quality product now that they are responsible for the brand than are any of the other mainland shit companies.
I turned to HP for a while, they had something worth buying for a bit, but I'm at a loss for my next round.
I'm seeing a lot of shit right now. Kinda hoping that Mr Del
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Don't know about that, to me Lenovo is among the best brands quality-wise in the PC world. That being said, it does not mean much since the PC market is full of crap in general. IBM computers were truly good in the 80s and 90s, but they couldn't keep up with the competition of the likes of Dell and Gateway.
To this day, I like buying Apple hardware for that precise reason. Even if it is overpriced, it is one of the few companies that will make sure that you get a premium experience. That's why a lot of peopl
Re:Lenovo - a collector of IBM garbage (Score:5, Interesting)
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Actually yes. The x series can be some large 4-way and higher x86 servers IBM sells that typically are used in heavy duty database clusters, large VM farms and high demand app servers. These servers can sell for over $100K depending on the config. And then there's Blade Centers series
Low end x86 tends to be the 1U and 2U varieties that are targeted for one-off web servers, AD servers and such.
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That's Amazon business model. It makes perfect sense. Imagine you are operating like a non-profit. Everybody gets paid their usual salary and the company has millions coming in but it does not matter. Everything is to support the idea of dominating the market.
Summary should probably also mention... (Score:5, Informative)
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You want to rent a teleporter from them?
You'll actually be renting 8 teleporters, but you only get to use one of them at a time if you're on the discount lease.
Re:Summary should probably also mention... (Score:5, Informative)
. . . and Networking Hardware Division to Cisco . . . and Federal Systems Division to Loral . . .
Some companies start as small operations in people's garages.
IBM holds garage sales.
Although, it should be noted that they buy a lot of software businesses . . . like Lotus . . . Tivoli . . . Rational . . .
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Huh? When did this happen? Or do you mean the hard drive business, which is very much not the same as their Shark stuff (and of course the Ramsan, the SVC, and XIV stuff they bought and the various netapp things they rebadge)
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Huh? When did this happen?
After the "Deathstar" fiasco, when IBM realized they'd fucked-up so terribly badly that no informed consumer in their right mind would ever take their hard drives seriously again...
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And the Retail Store Solutions to Toshiba.
Re: Summary should probably also mention... (Score:2, Funny)
And my axe!
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at least hitachi will make something of it... lenovo will just fuck everything up
Hitachi got taken over by Western Digital
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Hitachi sold their hard drive business to WD, not their storage array business. They still make fantastic storage arrays that are rock solid.
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The Hitachi 3.5" hard drive line ended up with Toshiba. I believe the consolidation of all worldwide hard drive business down to just two sources, WD and Seagate, was a bit too much for regulators to swallow.
These are excellent performing high quality drives and currently a rocking good buy. The drives still ID themselves electronically as Hitachi Global Storage with the old model numbers, though of course Toshiba has relabeled them on the outside and in the packaging.
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They have done pretty well with Thinkpads. What makes you say that?
Margins (Score:3)
Margins are pretty tight in that business. They'll do much better stcking to their mainframe business charging ridiculous prices for MIPS to customers that can't afford the cost of migrating.
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companies like Samsung will wipe the data center market clean with new SOC blades in a few years... IBM know the writing is on the wall and they won't be able to compete
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1. Chuck Hardware, 2. BS, 3. Profit (Score:2)
US's comparative advantage is bull$hiting, not cranking out cheap commodity widgets, and there is more room for bull$hitting in services. ...until China realizes there is a bull$hitting gap, catches up, and sticks Vietnam or S. Africa with the hardware grind.
IBM should just drop the M (Score:2)
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That line of business has a list of customers that make Apple fans look rational. They'll buy anything with IBM on it that the salesmen show them. They're set until the last of them retire or die off.
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its got more to do with ecosystem dependence and huge vested interests than fanaticism... you just can't compare an iphone with a mainframe
apple fans aren't as trapped into using apple products as some may think, whereas ibm customers pay millions of dollars to set up infrastructure with a lot of inertia that can't change course with each passing fad
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In all of the 'IBM shops' I've worked in, it's quite close to fanatacism. If it says 'IBM' on it, it will go through purchasing without question. Software or hardware from a competing vendor that is an industry standard, cheaper, with better performance and more features requires massive justifications. It may also be the 'old boys network' of sales people as well.
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IBM sells on RAS, Reliability, Availability and Serviceability. ( http://en.wikipedia.org/wiki/Reliability,_availability_and_serviceability_(computer_hardware) [wikipedia.org] ).
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With the z Architecture you can e g replace (hotswap) CPU's without affecting running applications. Think of banking systems that must have 24/7/365 service.
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With z/OS you also need *much* less sysprogs and operators compared with equivalent sized number of PC (or unix) servers.
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And yet they are pretty much about the same thing, Apple and IBM. Strong brands with a strong following. Don't bother to differentiate because you could also argue about Apple hardware quality-wise, Apple support, etc. To me, Apple IS the IBM of consumer space.
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In the high end server market IBM is the last of the old-school giants. They have support that will pull parts out of their test machines and hand drive them to you if those big iron boxes break. Of course on big iron "break" means a board is dead.., the machine itself is usually still running, just slower. If you find a real software bug, you can end up with the programmer (or the guy who SITS next to him) for that code looking at your machine himself. You are THAT higher up on the food chain than you eoul
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Once they get to one and have room to spare the upgrade slow to a halt.
I think there is a world market for about five computers.
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Migrating 64-bit apps from x86_64 to s390x is pretty straightforward. A recompile is definitely required as the x86 and z-series instruction sets are nothing alike.
Migrating 32-bit apps can be a little trickier, because on z there is no 32-bit addressing mode, it is either 24 (ancient and not used by linux), 31, or 64 bit.
Re:IBM should just drop the M (Score:5, Informative)
but they ought to just drop the M and call themselves 'International Business'.
Correction: 'India Business'.
Re:IBM should just drop the M (Score:4, Informative)
They've still got System Z mainframe line, and I can't see them selling that business unit off
...and they also still have the IBM Power Systems line [ibm.com] (Power Architecture boxes running IBM i, AIX, and Linux).
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System P is much more volatile year to year.. (Score:3)
They don't have a major refresh every year, years with refreshes appear to have crazy year to year growth followed by a year of apparent sharp decrease. One 'bad' year is not unexpected if preceded or succeeded by a certain event on their roadmap.
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I don't think Machine ever refered to ``machine'' as in computer or mechanical thing... it refered to IBM itself being a business machine.
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True (Score:2)
I had a M1 Carbine made by IBM for a while.
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A quick buck from the Chinese (Score:5, Interesting)
All that Western civilisation collectively worked on in the past 200 or so years has been given away to the Chinese for peanuts so we can sit on our collective asses and do nothing for about 20-30 years. Do you think that China will be paying us royalties once they figure out how to make a Core i7 processor themselves? F**k no, experience should tell you better.
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I would mod you up if I could. Well said. And people wonder why the economy here is so fucked up and jobs are so god damn hard to come by. They all went to fucking China.
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We should tariff lopsided trading countries like non-plutocracies do. The "Adam Smith" models that suggest even lopsided trade is "good" only focus on general averages and ignore stability (bank/currency bubbles) and unequal distribution (richer rich & gutted middle).
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Yea, well those Chinese are so stupid that they're happy with a 10% profit margin while paying their workers enough to buy their products. Just stupid when they could sell everything and make a killing in the stock market.
You sir are a genius (Score:3)
You sir are a genius! How could no one in any of those huge companies with thousands of attorneys and accountants come up with your idea? Please give me your contact information so I can warn them of their impending errors.
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If they should sell out to China I don't know, but IBM should have gotten out of commodity hardware sometime around the PS/2 flop in the late 80s. They got out of the desktop business after their ass was handed to them by cheap clones. They ditched the storage unit after the infamous IBM "Deathstars". So they created the original IBM PC, the Model M keyboard and I guess the PS/2 port is the lone survivor of that line but who is really going to miss their IBM hardware? Yeah ThinkPad was built like a tank and
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"Yeah ThinkPad was built like a tank and made to last twice as long at thrice the price but their performance/$ has been more than questionable for a very long time. IBM just isn't the right kind of company to be in that business."
The problem is nobody wants to be in that business. That's going to hurt everybody in the long run. Buying shitty products wastes far more money than it saves.
Ummmmm (Score:4, Insightful)
IBM sold them a division that builds commodity hardware. You know, the same shit you can get from, Dell, HP, Supermicro, ASUS, and so on. They just assemble tech bought form other companies. Now that isn't worthless, people buy a lot of servers, but it isn't something hard to figure out.
They didn't sell their processor division, which doesn't make i7s anyhow, that's Intel.
In terms of making their own i7, well ok, good luck. IP issues aside (they don't have an x86 or x64 license like AMD does) there's the whole thing that designing a processor is pretty hard. China decided they needed their own, home grown, processor, and by "home grown" they mean "used MIPS architecture because designing an architecture is hard." So they've thus far managed to produce a MIPS64 processor, that they don't fab (STMicro fabs it for them, they are European) that runs at 1GHz on a 65nm process.
That might be impressive (well minus the using other people's architecture thing, and the fab thing) except that Intel is making 4GHz processors on a 22nm process right now, and has a 14nm fab that is getting ready for pre-production in Arizona (will be up fully next year).
This idea you have that the US does nothing, particularly nothing high tech, is badly misguided. You might want to do a bit more research and find out all the things it does do. Processors would be a big one, being that not only is Intel a US company but most of its fabs are in the US but it is hardly the only one.
Not speaking to the business wisdom of IBM's move (IBM has been making bad decisions for awhile IMO) but stop acting like this is some super secret tech they sold. This is commodity manufacturing. For that matter it is commodity manufacturing that Lenovo already does some of. They make servers, just not many of them. This is an effort to grow their market quickly.
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Re:A quick death from a dying market. (Score:4, Informative)
A quick buck, or a quick death in a dying market?
Well said! IBM might not be the giants they once were but they're still pretty clued up. They sold off Thinkpad to Leveno and it's pretty clear now that the PC* market is dying.
The server market may well be about to choke it with cloud servers becoming so popular (AWS and whatnort). It doesn't seem sensible for a company of IBM's size to hold on to a market that is fast becoming a niece market.
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*I use "PC market" to mean "desktop/laptop market"... I hate it how Apple commandeered the term PC as if it somehow doesn't apply to Macs
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When home built gaming rig range from $600 systems to $4000 6-core Intel i7 with up to three GPU boards in SLI/Crossfire configurations, corporate customers are looking at cloud computing services to centralize heavy computing power and protect proprietary algorithms, is there any future for low-end corporate PC's?
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High school computer labs . . .
They should head back to being thin clients on a server running a bunch of virtuals - one per kid.
Easier deployment. Easier monitoring. Central backup.
Lets the kids customise their setup and then log in anywhere and get their machine.
Should cut power bills too.
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Get out while you still can (Score:3, Insightful)
If how Lenovo shat all over the ThinkPad line is any indication, you'll be sorry if you don't abandon ship now.
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I don't know what they might have done to their ThinkPad line, but the IdeaPad I bought from Lenovo a few months back has proven to be rock solid, reliable, and fast. It runs on batteries longer than I need, and it has more bells and whistles than I want or need.
Methinks people are just yearning for glory days that weren't as great as they remember in the first place, much like any other reminiscing people tend to do.
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No parts have failed. Everything works. The keyboard is just fine. This crap about "good build quality" is just that -- crap.
No, it doesn't have a brushed aluminum or forged titanium case. It doesn't have that little rubber nub instead of a trackpad (which I wish it did.)
But there is nothing wrong with the "build quality" of the machine I bought. It's cheap. It has a plastic case. But I'm not planning to sit on it or drop it, so good enough.
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IBM hasn't built a good keyboard since 1991 when they spun off Lexmark.
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The later models had drains for funneling your coffee spit-takes out the bottom instead of in the mechanism or electronics. And of course they can also double as an impromptu assault weapon.
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Yep.
One thing I always admired about IBM Servers is that IBM would support the things practically forever as long as you kept a service contract on it. I highly doubt Lenovo will support a server for 10+ years.
Are they just an offshorer now? (Score:2)
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Why would I bother hiring IBM to do that when I can do it myself?
I think more (former) IBM customers are starting to figure that out. Here's an interesting story about IBM losing the contracts for Hilton Hotels and ServiceMaster due to bad service [cringely.com]. The ServiceMaster one is particularly interesting. Despite the incredible shortage of good IT people, which necessitates tripling the H-1B quota, they had a job fair one Saturday and were able to hire everybody they needed for their new in-house IT operation. I'd bet they saved money on it too. So the offshoring that IBM does
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CE's don't even carry proper toolkits anymore. All the FRU's come with whatever tools are required to replace them, and larger items shipped by IBM come with wrenches and tools necessary for install. So the customers end up with a tool and supply pile if the CE comes often. And its not just screwdrivers and sockets. Its hard hats, klein cable fishes, and tons of single use tools like 3" wrenches, etc. Each with a specific purpose, but replacing a common tool like a crescent wrench with some stamped steel si
Should read the low-end of the x86 business (Score:2)
So International Business Machines... (Score:2)
...will no longer sell any business machines. Interesting.
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...will no longer sell any business machines. Interesting.
Someday that might be true, but, for now, they're selling these [ibm.com] and these [ibm.com] business machines.
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they won't be selling commodity x86 server crap, you mean. they'll be selling their mainframes, supercomputers, i-series (the successor to AS/400 that can run system i, Linux and Windows), and system P (linux and AIX)
It's a fine line there anyways (Score:2)
This is silly (Score:2)
GE, HP, Sun, Dell, etc were once top notch companies ran by engineers or business ppl who actually care about their companies.
Now, they are ran by MBA's that destroy the companies just so that they can get a fast buck.
So sad.
What about the network, storage and software (Score:4, Insightful)
That they sell to go with the servers? All three of those items are high margin and more than make up for the lack of margin on the servers themselves. How long is it going to take Lenovo to start selling enterprise storage or networking gear? They had better get some kind of agreement from lenovo that they won't sell gear in any of those categories for the next decade or two.
I can't really see people calling up lenovo and ordering a bunch of servers, and then calling up IBM and ordering storage. If nothing else they are going to call up netapp, EMC and Snoracle as well.
Maybe IBM doesn't care about the "low end" stuff people are connecting to their x86 servers. Sell a few less DS3500s milk the DS8k customers some more.
The problem is that "low end" x86 hardware is slowly but surely eating into what remains of the unix/midrange "server" market. Sure a couple customers here and there buy a mainframe and run zlinux on a couple IFL's they basically get for free after buying the mainframe. But in the end, can they support a business on such a tiny portion of the market? Even major mainframe customers like American Airlines have publicly stated they are moving away from the mainframe.
I suspect they will continue as they have for the last decade, selling pieces of the company, moving all the engineering to cheap labor countries, and charging their existing customers a heavy ransom for the privilege. But at this point in time IBM is beginning to look like Sun circa 2001.
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pseries aren't mainframes. Those are just big unix machines, and the markup on them is nowhere near the zseries mainframes. Plus AIX basically doesn't have any vendor lock. Applications ported to AIX from some other unix can just as well be ported somewhere else like linux. Try porting the mess of cobol/JCL/etc running on z, or even i series apps. That takes real money/development effort.
The problem is that eventually someone notices the cost price/performance between z/p and x86 if everything is running in
You guys are all missing the point (Score:2)
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Leaving all the people that did all those previous things of interest in the west saying, "WTF ?"
Of course I grew up with the "knowledge" that Japan's cheap wages were going to kill the west. But that didn't work out for them. I'm really interested in seeing how long China can keep their slave population in check.
Re:Makes sense... (Score:4, Insightful)
I'm currently in China and can tell you that you are very diluded if you think of everyone here as a slave. They will be able to keep it up because life in here is very cheap. So when you see what you would consider a crappy wage in the west, it turns out that is a lot of money here. Plus the high school system is one of the best in the world, at least in Shanghai, and free nonetheless. So I think you might want to take a trip here and see for yourself what's going on.
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Dude I am in Shanghai so drop the crap. The only reason for a license to cost that much is because of the auction and limited license plates. It is a measure of the city in its fight to reduce pollution, and much like New York, you don't need a car in Shanghai. Second of all, very rarely you see people in here buying Chinese cars. Most of the cars you see out there are Buicks and Volkswagen. It was funny to me that anybody was buying Buicks anymore. Again, kind of pointless in a city where you pay $2.30 for
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You know in China when you go to some nightclubs and restaurants, you will have people in the bathrooms that will handle you a towel, pour liquid soap in your hands, etc. People at every metro station with flags when you come out "directing traffic", as well as two or three cops telling you to put your bags in the x-ray machine but that almost everybody ignores. Literally hundreds of people cleaning the street in the morning with brooms made out bamboo sticks and leaves, and cleaning ladies that charge you
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Well, I am in Shanghai and believe me, this feels like anything but socialism. The only indication of the political system I could see was with the great firewall thing and even that is easily bypassed with a vpn.
The cleaning ladies or ayis, as they are called here, are not only used by fat lazy foreigners but by a lot of Chinese too. Remember that not all Chinese are poor and there are quite a bit of people here driving Ferraris and Lamborghinis.
From what I have seen and talking with my Chinese friends, th
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What do you mean, "still"? I imagine most people are using them. Why? Because they're cheap and, most importantly, standardized.
I'll admit, I'm a big fax of Unix, but we decommissioned our last pSeries server a couple of years ago. The last straw was when we tried to add some additional disk space to the machine. Our distributor wanted about $25,000. After a little research, I discovered we could get a whole new x86 server with twice the disk space for l
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When outages cost you millions of dollars per minute, you're willing to spend the money on having a well-tested walled garden. This isn't appropriate for every business case, but there are definitely those who need that level of reliability.
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Who here is still using the x86 in their server farms? I'm interested in hearing why.
Because Windows only runs on x86, and once I've built up my VMWare or HyperV infrastructure to run the Windows side, why use a completely different processor architecture for the non-windows servers?
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we use 603e power PC's dropped that x86 garbage 15 years ago for the latest fad that no longer exists tyvm!
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You really need to look at the competition. HP is miles ahead of IBM in terms of servers (and IMHO the best maker out there). The iLO alone absolutely destroys the IBM RSA and the Dell DRAC in terms of functionality.
If you want price, you go with Dell
If you want features, you go with HP
IBM gives you the features of Dell at the price of HP
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IBM RSA
Has it been that long since you looked at IBM products? As of the Nehalem generation of servers, RSA no longer applies.
Guess my question would be what the perceived feature gap between HP and IBM on this front. It's probably no longer valid. That's not to say that there is good reason to run to IBM to the exclusion of HP, but probably not a strong reason to avoid IBM anymore.
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