IBM's x86 Server Business Back On the Market 71
itwbennett writes "It was widely reported last year (including on Slashdot) that IBM attempted to sell off its x86 server business to Lenovo, which seemed logical as Lenovo had bought out the IBM's PC business a decade ago. However, the two firms could not come to financial terms and the deal was never struck. Well, the rumors have started up again, only this time Lenovo has some competition, as Dell and Fujitsu are now being thrown into the mix as possible suitors."
Does anyone check these summaries anymore? (Score:5, Informative)
the rumors have started up again, only this time Lenovo has come competition, as Dell and Fujitsu are now being throw into the mix as possible suitors.
Come one, that's just sloppy writing there. We can do better than "Lenovo has come competition" and "being thow into the mix".
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To be fair to the editors, this is exactly how it reads in the source. The use of quotes is warranted and allows the editors to escape my wrath....this time..
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The use of quotes is warranted and allows the editors to escape my wrath....this time..
Wrath on, because an editor is supposed to mark such atrocities with [sic].
That being said, the summary is now corrected to proper English, so I'm terribly confused.
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Wrath on, because an editor is supposed to mark such atrocities with [sic].
The submitter is supposed to write their own submission and not just copy-and-paste a paragraph or two from the article.
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...you should use brackets and they should not be italicized...
"...the rumors [sic] have started up again...Lenovo has come [sic] competition...now being throw [sic] into the mix..."
Huh?
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To be fair to the editors
They're supposed to fix these things - that's why they call themselves editors.
this is exactly how it reads in the source
And submitters are supposed to write their own summaries:
Please try to use your own words; if you're quoting another source, make that clear.
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Come one, that's just sloppy writing there. We can do better than "Lenovo has come competition" and "being thow into the mix".
See? That's what happens when you don't buy IBM Chipkill(TM) memories for extra error correction!
Don't even proofread the submission, guys... (Score:5, Insightful)
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Is it fitting that IBM has one that would do a fine job? [ibm.com]
Re:Don't even proofread the submission, guys... (Score:5, Insightful)
No, this is quite intentional. Now there will be quite a few comments to the bad grammars -- which everyone can participate in [i.e. you don't need to know physics or electrical engineering] which generates activity, participation and ad impressions on the cheap.
Oldest trick in journalism to foster activity, sadly.
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The oldest trick in journalism is a strategy that came into existence within the past several years?
I guess The Internets have not only destroyed old journalism's business models, but eradicated any memory of the 200+ years of its existence.
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They don't care because Dicedot makes money, and it's not as if standards matter any more since it ceased being a tech site.
Re:IBM strategy (Score:5, Insightful)
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Well, we really don't make much on the hardware.
Consider the lowly x3550 m4, a box we sell in large quantities. It costs around 3K basic and $22K nicely decked out to handle quite a few virtual images with 384GB of memory (you can double that).
Figure a nice 40% margin, less if you are buying more of them. Say 20%. Buy a service contract we might even take a significant loss.
Now, if you have us support that device in a datacenter, I can tell you that we will make many more times that in basic sysadmin servic
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But still, we don't make money off the server itself, so why make them?
Actually, we do make money on other systems. I've been told iDataplex actually came in at around 20% margin. From what I hear, x86 Flex came in at around 20% margin too, despite aspirations of 50-60% margin. The problem with IBM is that if you try to *plan* for 20% margin (which some companies would not at all mind), then you are laughed out of the room. There is no way that all the money that went into Flex would have been spent if they had known at the time how much volume and how much margin they *re
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And herein lies a big chunk of the problem for IBM's hardware group and the rest of IBM after that group goes away. When there is a bid involving software and/or services together with servers, the servers get cut to the bone or sold at a loss to advance the welfare of software and services. This is due to a partially self-fulfilling prophecy that being in the hardware business is low margin and therefore should be screwed over to make room for the more successful parts of IBM. Part of IBM's hardware failings is because they make it fail because they think it is failing. Keeping in mind IBM continually wants to do this and executives force STG to take the hit for the sake of SWG and GTS, what happens when STG products are no longer under the same executive umbrella? Those suicidal discounts won't happen anymore because the external vendor doesn't answer to some executives that want to see IBM succeed at all costs.
YES.
I would guess their logic is that customers in the segments they divest don't actually care about the hardware, and if they do really want Thinkpads or IBM x86 hardware, they can pay a little more to get it from Lenovo. Hard to believe with Thinkpads being gone, but the strategy seems to be to keep the hardware that customers demand to the extent they're willing to pay.
Deal to lenovo is done:
Research Triangle Park, North Carolina, and Armonk, New York - 23 Jan 2014: Lenovo (HKSE: 992) (ADR: LNVGY) and IBM (NYSE: IBM) have entered into a definitive agreement in which Lenovo plans to acquire IBM’s x86 server business. This includes System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. The purchase price is approximately US$2.3 billion, approximately two billion of which will be paid in cash and the balance in Lenovo stock. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.
$2.3billion isn't much. Sheesh.
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But still, we don't make money off the server itself, so why make them?
If this is what passes for IBM logic these days, then the sooner they die the better.
You sell/manufacture them, so that you can bundle higher margin products and provide a one stop shopping/support experience. How many Dells are running Tivoli software, or better yet how many places are running Dells and hiring IBM to manage them? I'm betting those numbers are far lower than the places with IBM hardware.
So cry me a river, Lenovo is doing
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I'm betting those numbers are far lower than the places with IBM hardware.
You would lose that bet.
We manage anyone's hardware in our datacenter. Totally agnostic. You want dell? Sure. HP? Sure. SUN/Oracle? No worries.
It does not matter.
Now, we give them a good discount if they want our hardware, but they are welcome to spec any hardware they want.
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Just like you can buy a glorified desktop from IBM as a "tower server" rather than having to go to Lenovo
"Having to go to Lenovo"?
What exactly do you think those tower System x boxes are, anyways?
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Are they Lenovo? I knew IBM outsourced their x86 servers, but I wasn't sure if it actually was Lenovo.
If it is Lenovo then Fujitsu et al would be stupid to buy it. If Lenovo doesn't think the asking price would be profitable for them, even though they'd have the lowest costs in transferring the business, then IBM must be demanding way too much.
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I knew IBM outsourced their x86 servers
Actually, currently, they don't outsource their servers (in the sense of 'rebadging') for the most part. They are usually manufactured by the likes of foxconn, and sometimes much of the fine grained design work is done outside, but at the very least IBM does high level design (if not down to the nitty gritty). They even write their own UEFI implementation where pretty much everyone else goes to AMI. This doesn't necessarily mean good or bad things about the systems, it just happens to be that way.
Excepti
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IBM's UEFI implementation is a big reason I switched to Dell.
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No, crap.. Some of these UEFI servers are amazing...
Amazing that they can take 5+ minutes to get to the grub menu.
Of course the RS6k/pSeries machines I've used are worse. Stack a few IO drawers/FC cards in a machine and be prepared to wait a 30 minutes to boot to AIX.
I didn't realize dell was better. I'm going to have to give them another look. We have HP, IBM, and supermicro.
The supermicros we have boot in 1/10th the time with similar system configurations.
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Of course the RS6k/pSeries machines I've used are worse.
The benefit of pSeries (or in my case System z) that hardware reboots are very rare indeed. We POR our System z EC12 max twice per year for z/VM upgrades and the like and our pSeries guy's last reboot of any significance was for some fibre channel firmware or hardware replacement. I think, on the whole, it's a moot point and we could all do with less Lennart Pottering-esque conflating of server vs. desktop priorities.
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I think, on the whole, it's a moot point and we could all do with less Lennart Pottering-esque conflating of server vs. desktop priorities.
I think boot times matter on server gear too, and for a while so did IBM, back when they were pushing availability numbers because a single hour long reboot, once a year can put the system availability in the three nines category. Sometimes the hardware needs actual reboots be that for firmware or hardware upgrades... None of my machines have physical hotplug memory fo
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Dell and I had a falling out around the early 2000s, and I switched to IBM. The upgrade in support was no contest, and the servers were solid. I had a not-so-good run with IBM Opteron servers, but otherwise I had no complaints. Later on I had increasing issues with the company across the board, culminating in a server which took 8 months to be delivered (that's no typo). And for the wait I got one of the IBM EUFI wonder-systems. (I was also weary of how it interacted with Redhat and didn't want to see how
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They will draw a line somewhere that keeps some x86 server architectures in the IBM stable
I'd guess the line could be somewhere around 'we can slap the IBM badge on the server on the way out the door' at best. Or else they'll have their brand completely removed from the boxes presuming that opens things up for IBM to be viewed as a logical provider for services and software on top of HP, Dell, or whatever server in x86 land.
Keeping some x86 business back from a divestiture could be pretty catastrophic for the bit that stays. When IBM sold PC, procurement got hit *hard* due to reduced volumes a
What does IBM do anymore then? (Score:1)
What does IBM do anymore then?
Intragalactic Bowel Movements?
http://www.schlockmercenary.co... [schlockmercenary.com]
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How is it that Lenova is able to make money (Score:3, Funny)
off of a PC business that IBM was not able to. Is it because USian workers are all lazy? You know what we really need to do is to give China the cream of the USAian elite managers. I think we should export all the Harvard school of management graduates along with all our intellectual property lawyers to China. Think of all the exponential improvements the Chinese economy would undergo. Sure the Chinese are great at making things, but they have no management skills. We need to help these poor Chinese o
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IBM switched to services over a decade ago. They were the first and largest computer hardware vendor to do it, and other companies have been fruitlessly trying to emulate them. IBM's strategy is, AFAIU, actually studied in business school (anyone with a recent MBA care to chime in?), because they were one of the largest companies ever to successfully make such a fundamental switch to their business model, and their execution was near perfect.
Yes, IBM still sells mainframes and other systems, but the actual
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It wasn't widely reported at the time, but Apple acquired their Itty Bitty Machines division several years ago. So, they don't even make phones and MP3 players anymore.
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Software development and management services are their big bread and butter nowadays, not hardware.
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Lots of software: http://www-03.ibm.com/software... [ibm.com] . Click on W-Z to see all their WebSphere brand products:
WebSphere Application Server .
WebSphere Business Compass
WebSphere Cast Iron Cloud integration
WebSphere Bigboote ("It's big-boo-TAY! TAY!")
WebSphere Small Berries
WebSphere Lord Whorfin
WebSphere Many Jars
WebSphere Littlejohn
WebSphere O'Connor
WebSphere Parker
WebSphere . . .
LOL (Score:1, Troll)
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IBM does not make innovation, they make money. commodity x86 server market is not the place to make money
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Not to mention PureFlex, which is the densest x86 (and RS600) "datacenter in cabinet" blades in the business.
Moonshot might eventually beat it when they get the Atom based cards on the market.
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Not to mention PureFlex, which is the densest x86 (and RS600) "datacenter in cabinet" blades in the business.
How sense is that?
Compared to the old single socket CPU in a 2U box that server vendors love to compare too, sure. Frequently the super-dense "solutions" hawked stack up badly compared to commodity 1U quad socked boxes, even given an extra U for a switch.
By stack up badly, I mean in terms of FLOPS/U and RAM per U.
I've worked with those commodity boxes and have been impressed. Basically, substantiall
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Love the idea of a cheap 1U quad socket commodity server. Got to love Enterprise level budgets.
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Love the idea of a cheap 1U quad socket commodity server. Got to love Enterprise level budgets.
They really are cheap. If you instead buy cheap-ass desktops in cheap cases with crap PSUs, you can get double the bang for the buck, at the cost of taking up masses of space and having no ILM or other remote management, no ECC ram (this is doable in cheap desktops with AMD) and no large system image.
The base price for such a system is GBP 1200 for the chassis and motherboard. Fully maxed out with .5T of RAM and 4
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I was not saying that they where not a good value. Just the idea of that much compute power being cheap is amusing. 8k for a server is still in enterprise pricing to me but well worth the money
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Maybe I'm stupid and haven't worked out how to make everything run in cloud like box can fail without taking anything down and you just swap the entire box, but IBM has some real value adds in the x86 space. (I have to guess other vendors do as well, but I use primarily System X).
The ILM (IPMI/ IMM whatever it's called) is really really useful if you don't want to have to be in the server room (or haul it out of a rack and then haul it back in) to do OS installs or BIOS configuration or low level troublesho
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Not to mention PureFlex, which is the densest x86
I don't see how anyone could claim that. Flex is a 10U enclosure that holds, at best, 28 dual socket servers. The Dell M1000e can hold 32. IBM's own nextscale gets 12 in a 6U leading to theoretically 84 in a rack (which matches the low-speed bladecenter).
Of course, *highest* density is an overrated metric, since the densest solutions are rarely deployed since the power and cooling footprint frequently exceeds a datacenter's designed capacity. Atom based servers may mitigate that issue, but it is unclear
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I feel like IBM is doing something other vendors really aren't, and don't know if anyone but Lenovo would continue to do (I am going by Lenovo's continued excellence in the workstation and thinkpad hardware).
And that is make products that work well for mid-sized businesses. Of course, that's not a market IBM really wants, hence the attempted sale in my opinion. I find their price premium buys you some great engineering as you said, as well as good, no-nonsense support on hardware issues (ESC+ is a revelatio
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The x86 server market doesn't have to be all "commodity". Look at a company like HP, who's NonStop and Tandem systems look likely to switch over to x86-64 processors in the near future.
As long as you can maintain some simple value-add on your servers, the CPU architecture really doesn't matter. Apple figured that out on their desktops/workstations. Cray has that figured out in their supercomputers. And IBM... Wants as much vendor lock-in as they
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Not a whole lot of room for innovation in the sever space.
Case design? Not really everyone uses racks.
CPU? Not in the X86 space.
Software? Linux, Windows, maybe BSD or Solaris.
Servers == following standards.
Once you get to the big iron running Power you have room for innovation.
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That is more evolution the innovation IMHO.
Component selection is just good QA.
There is nothing wrong with good solid engineering and frankly that is what you want and need in the x86 space.
Of course when you get to blades, HPC with custom interconnects, and CPU GPU compute systems you are in a different category and one I believe offers a lot of room for innovation.
Fujitsu and IBM enterprise a good fit (Score:2)
Fujitsu is known for making some solid never fail tank style servers. I admin a few of these myself and didn't even realize the hardware vendor for many years until a cluster failover card failed and needed to be replaced. In this case it was a Fujitsu Sun system. I can only assume Fujitsu IBM systems would carry on the overbuilt stability minded servers you come to expect from an enterprise server like IBM.
I can't say the same for the other two contenders.