IBM Signs Tech Data, Ingram Micro For Power-Based Servers

IBM signed distribution deals with Tech Data and Ingram Micro in a bid to expand the potential market for its Power processor-based servers and enterprise-class storage to midmarket solution providers.

Tech Data and Ingram Micro, which already partner with IBM on its System x x86 processor-based servers and midrange storage, will help recruit those midrange solution providers looking to develop enterprise server and storage expertise, according to IBM.

Avnet and Arrow have been IBM's primary distributors in North America for its Power-based Unix servers and enterprise-class storage.

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IBM's goal with the new distribution deals is to expand its enterprise business reach to both traditional IT solution providers and to global ISVs, said Bill Donohue, vice president of IBM's North America business partner and midmarket sales.

"We believe the new relationships will help us expand into the midrange business segments," Donohue said.

The addition of Ingram Micro and Tech Data to IBM's Power processor-based server distribution list should not be seen as diluting the value of IBM's existing relationships with Arrow and Avnet, Donohue said.

"Arrow and Avnet both remain very strategic to our strategy," he said. "This is about expanding our market. We're looking for lift, not shift, in our market."

When asked about his comments that IBM's Unix market is growing despite research reports that show Unix to be a shrinking market, Donohue said there are untapped opportunities for the servers in customers currently served by midrange solution providers.

"We have a growing market in Unix, but it's not growing like we want," he said. "Solution providers and distributors will not have a complete package of solutions to sell. There will be opportunities to grow the existing Unix market."

Heidi Dethloff, vice president of IBM's North America business partner and midmarket marketing, said IBM's Power-based servers are not only for Unix. "Don't forget Linux on Power," Dethloff said. "It's an important part of the business."

Gartner, however, wrote in its third-quarter 2012 server report that third-quarter shipments of Itanium and other RISC-based processor servers, which include IBM's Power family, fell 31.1 percent compared to the same period the year before. Total revenue fell 16.4 percent, Gartner said.

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Of the top three Unix server vendors, IBM saw shipments fall 15.5 percent while revenue fell 2 percent; Oracle saw shipments fall 45.3 percent while revenue fell 35.5 percent; and Hewlett-Packard saw shipments fall 38.1 percent while revenue fell 28.2 percent, Gartner said.

However, thanks to high-performance computing and cloud infrastructure demand, sales of Linux servers rose 6.6 percent over those of last year to reach $2.6 billion, or about 21.5 percent of all server vendor revenue, Gartner estimated.

Chuck Bartlett, vice president and general manager for Tech Data's Advanced Infrastructure Solutions division, said his organization has over the six years since its founding built the capabilities needed to take advanced server and storage products to its midrange partners. There already is a strong untapped business for the high-end servers, especially for customers who have invested heavily in Linux, he added.

"It's important for IBM to have the ability to talk to partners about a wide range of requirements," Bartlett said. "If we're talking to an IBM System x partner, we don't want to stop the conversation if it moves toward Power-based servers. Tech Data can be there to facilitate the conversation."

The new relationship is an important addition to Ingram Micro's IBM portfolio as it gives the distributor a complete product line, said Scott Zahl, general manager and vice president of the distributor's Advanced Computing Division, which currently partners with HP on that company's Unix servers.

Ingram Micro will target the IBM Power-based servers at both Unix and Linux markets, Zahl said. "Ultimately, it will be the end user and partner community who will drive the platform focus," he said.