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IBM Counters Falling Hardware Sales By Open-Sourcing Power Server Line

IBM and its channel partners hope building an open-source business around IBM's Power-based server technology will help shore up IBM's declining hardware sales.

IBM, which is experiencing plummeting hardware revenue, is looking to shore up at least a part of its hardware business with a unique strategy: Open-source it.

IBM, a major supporter of open-source communities, is now applying the open-source model, long a mainstay in the storage industry, to its flagship Power-based server family.

The move to take its Power server technology to the open-source community via the OpenPower Foundation comes in the wake of IBM's decision to sell its x86-based server business to China-based Lenovo, and at a time when IBM's server sales continue to fall.

[Related: We're Still In The Ring: IBM Comes Out Swinging With New Storage Products, Partner Incentives]

The most visible aspect of IBM's opening up of its Power server technology came in April when Google blogged about a prototype server based on the Power processor.

However, at least one other server motherboard manufacturer and nearly 30 other developers of server-focused technology and components have signed on to OpenPower.org, said Bradley McCredie, vice president and CTO for IBM's Systems and Technology Group, and an IBM Fellow.

Google's development of a dual-socket server based on IBM's Power platform is only a small part of IBM's push to build an open-source ecosystem around the technology. Motherboard makers Google and Tyan, three memory makers, graphics developer Nvidia, and several software companies all support the platform.

Taking its Power server platform into open-source comes at a critical time for IBM's server business. While IBM just this month released four new servers based on its new Power8 processors, the company is dealing with a rapidly falling market for servers built on RISC processors, which include the Power processors.

Research firm Gartner in December said total third-quarter 2013 shipments of RISC-based servers fell 4.5 percent, leading to a revenue decline of 31 percent. IBM was the only vendor to grow its RISC server shipments, with a year-over-year rise of 19 percent, but it still saw revenue for the line drop 29.8 percent during that time, Gartner said.

NEXT: IBM Channel Partners See Open-Source The Right Move For IBM Power


The move to open-source IBM's Power server technology is the right one to bring back market share and keep the technology viable in the long term, said Pete Elliot, director of marketing for Key Information Systems, a Woodland Hills, Calif.-based solution provider and longtime IBM partner.

"Frankly, I thought IBM should have done this years ago," Elliot told CRN. "We're delighted to see it. We believe in Power. This is a step in the right direction. Power has always been an IBM-only technology. But the more it expands, the better it is for everybody."

Tom Hughes, director of alliances for the Technology Solutions Group at Ciber, a Greenwood Village, Colo.-based solution provider and longtime IBM channel partner, told CRN opening the Power server business to the open-source community was the right decision.

"IBM needed to have more of an open approach to Power," Hughes said. "It's good for customers, and good for the channel. We're seeing price comparisons pretty competitive between open Linux and open Power systems in terms of price vs. performance."

The move is the start of a must-do reintroduction of IBM Power technology to non-Power customers, Hughes said. "Now IBM has to put systems in the hands of customers," he said. "It needs to be willing to provide seed systems to customers."

IBM has had to do something to build up its Power systems to compete vs. the Intel-based servers in the market, said Chris Pyle, president of Champion Solutions Group, a Boca Raton, Fla.-based solution provider and longtime IBM partner.

"IBM needs a big 'air attack' to tell customers they can run their Linux applications on Power," Pyle told CRN. "IBM is getting really aggressive in price, but in my opinion it's not doing enough to promote the technology."

IBM is facing a lot of FUD about its server business, and needs to step up its work with the ISV community to expand its Power server business, Pyle said.

"Some of the moves IBM is making, like bringing Power to open source, are not for the faint of heart," he said. "These are massive shifts."

Solution providers, whether they work with IBM or with partners in the OpenPower Foundation, will have access to IBM and white-box servers as well as a variety of other solutions from multiple vendors, IBM's McCredie said.

"We are generating innovations and differentiation for Power systems from many, many companies," he said. "And we are bringing the innovations of our partners to our channel. We also look forward to having channel partners participate in OpenPower. They can then bring some of their own innovative solutions to the wider market."

This article originally appeared as an exclusive on the CRN Tech News App for iOS and Windows 8.

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