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By | Simon Sharwood 20th January 2014 06:27

IBM renews attempts to offload server biz: report

Probably ditching commodity x86 kit that the cloud and Quanta are eating alive

IBM is trying to offload its “low-end” server business, according to The Wall Street Journal.

The Journal's report suggests Dell hasn't turned up its nose in disgust at the idea of buying Big Blue's server unit and that Lenovo could also be sniffing around.

IBM's motivation for selling off low end servers is not clear, nor is just what is up for sale. Let's guess that the System X boxen are in peril, as these unremarkable x86 devices come in tower, rack and blade form factors and possess no immediately apparent competitive differentiation. Perhaps the x86 iterations of the Pure server range are also on the block.

It's hard to imagine the Power range is up for sale, as Dell and Lenovo are not the kind of company that would want the baggage that comes with owning the stack of silicon and operating system associated with such hardware. It's also hard to see IBM walking away from the customers who appreciate the mutually optimised rigs that Power and its ilk delivers.

As for why IBM is walking away, the company has a long history of leaving markets that offer low and/or declining margins, the better to pursue opportunities that let it sell services and deeper expertise.

If, however, IBM is offloading the X series, any claim to offering a comprehensive small business offering could go with the servers.

Whatever Big Blue's intentions, the server market is becoming a less friendly place by the day. Sales aren't stellar, thanks in part to cloud adoption. The cloud is also coming to compete in other ways, with Facebook's server supplier of choice Quanta signalling plans to sell its servers in smaller volumes through local outposts. ®

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