PowerWire.eu

Independent IBM i, AIX and Linux news and tech tips for Europe and beyond

  • Home
  • News
  • Technical Articles
    • IBM i
    • AIX
    • Linux
    • VIOS
  • Subscribe
  • About Us
  • Contact Us
  • Advertise with PowerWire.eu

Opinion: IBM needs more focus on Power

October 24, 2014 by Seamus Quinn

businessman hand working with new modern computer and business s

Call me biased, but isn’t one of the primary messages from IBM’s latest disappointing quarterly figures simply that it needs to sell more Power Systems?

Big Blue certainly made no bones about fingering its Systems and Technology server and storage division for some of its failings in its earnings announcement on Monday. Revenues from Power Systems were down 12% compared with the third quarter of 2013. Revenues from System z mainframes decreased 35% compared to a year ago.

Now, all things considered, that could be painted as not too bad given the current economic backdrop. System z and Power i revenues swing hugely one way or another from quarter to quarter anyway. As the installed enterprise Unix base matures and contracts, such swings will become more common for Power p servers too.

But the more chilling line in the press release that IBM issued to announce its woes was, to my mind: “Systems and Technology pre-tax loss increased $91 million to a loss of $99 million.”

Whichever way you cut the mustard (and IBM’s bean counters appear to know every which way there is), that’s not very good. It was also very baldly stated. It was up there with IBM’s senior vice president and CFO Martin Schroeter’s comments in January when he said that the company recognised “that the size of the Power platform will not return to prior revenue levels”.

IBM admitted on Monday that it was the end for its self-imposed deadline to hit earnings of $20 per share by 2015. Most seasoned IBM-watchers would probably agree that this is no bad thing.

Insiders had dubbed this quest Death March 2015. In their view, the savage headcount losses in its pursuit was hollowing out the company from within. So, having thrown off what looked like a rather unnecessary financial straightjacket, perhaps the hundred year-old firm can now concentrate on some basic principles.

It doesn’t matter whether they are scale up, scale out, or whether they are destined for huge cloud data centres or traditional on-premise users, Power Systems are, in reality, IBM’s only game in town.

Every single unit sold, be it AIX, IBM i or Linux-flavoured (or all three), is a gateway to further software and services revenue. And every one feeds the ecosystem of distributors, business partners and ISVs that surround the platform.

However, the corporation’s attitude towards its own servers appears to be in a state of flux. On the one hand, you have super-confident announcements about new Intel-killing Power-based hardware. On the other, we’ve got the news this week that it has offloaded its Power-processor making business.

More focus is needed here. IBM’s alternative (mainframes aside) is to jettison the rest of its hardware and concentrate on the SoftLayered cloud. The odd thing is that, even if Big Blue were to bail out on Power at, say, the next processor generation or the one after that, there would still be considerable demand for Power-driven servers anyway.

It won’t matter if they don’t come from IBM because, in the meantime, a whole new generation of hardware could have sprung up as a result of the OPENPower Alliance. Taiwan’s Tyan is already out of the box on this one and others may follow soon.

Now is the time for a steady hand and a clear direction. After all, with its huge dowry to GlobalFoundries, IBM has pretty much paid for its Power microprocessors for years to come. It’s either that or put Watson on Azure and be done with it.

Filed Under: News Tagged With: AIX, IBM, IBM i, OpenPower, Power system, Tyan

Free monthly newsletter signup

News

A screen a story – Not our problem anymore

Last week I ran into an issue, which did teach me something new about the command WRKPRB. After checking a … [Read More...]

Raspberry Pi and Machine Learning

In my last article, I demonstrated how I used Machine Learning on the Raspberry Pi to determine if a … [Read More...]

Shield Advanced Solutions – new Messaging and Monitoring solutions

September 2022 – Toronto As Shield Advanced Solutions celebrates the significant milestone, 25 years of … [Read More...]

More articles from this section

Quick Links

  • Advertise
  • Subscribe

Follow Us…

  • Email
  • LinkedIn
  • Twitter

Search This Website

Copyright © 2023 · Cue Communications · All Rights Reserved

Log in