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IBM bows out of servers. Will storage be next?

IBM’s recently announced decision to bail out of the X86 server market and sell it to Lenovo has caused quite a stir and much speculation. Naturally, I’m most interested in what this means for its storage business, its customers and partners and the industry as a whole. To say that it seems like a bold and potentially hasty decision would be an understatement, and it certainly makes me wonder what this means for IBM’s converged strategy overall.


Another step in IBM’s withdrawal from the hardware market?


IBM was one of the first vendors (along with HP) to explore the idea of using servers as storage, and its storage portfolio is based on its X86 servers. They may not have fully exploited the potential advantages of this close relationship, but nonetheless the intention and opportunity was there. Selling its X86 business to Lenovo sends a clear signal that IBM is no longer committed to its server business and has all the hallmarks of yet another step in the company’s withdrawal from the hardware market.


This brings us to the implications for IBM’s storage business. What is perhaps less known is that IBM and Lenovo also plan to enter into a global OEM and reseller agreement whereby Lenovo will resell IBM’s entry and midrange storage solutions. Once he deal is finalized, Lenovo will assume responsibility for the associated customer service and maintenance operations. IBM will continue to provide maintenance delivery on Lenovo's behalf initially, so in the short-term customers probably won’t notice much of a difference. Longer-term however, questions arise concerning IBM’s dedication to the storage market and how much it will really invest in R&D and enhancing the portfolio.


No doubt organisations currently using IBM’s storage products will be wondering what this means for the future of their data centre and whether they need to completely re-think who they partner with moving forwards. This uncertainty will have extended to IBMs partners too as they scratch their heads wondering what – if any – future engagement they will have.


So who is meeting the increased demand for converged infrastructure?


Given the increased demand for converged infrastructure – including servers, storage and networking – I also find these latest developments somewhat strange. Customers want end-to-end, holistic solutions with common management tools and a clear future development path. IBM abandoned the networking market some time ago, and is now bowing out of servers – and by implication storage – as well. To me, this is a clear signal that IBM is ceding the entire converged infrastructure to its competitors.

You might expect me to welcome this, and in my opinion it does confirm HP’s position as the only vendor offering a completely converged offering. That said, I believe that competition in any market is a good thing. It motivates all of the players to push the boundaries of innovation and raise the bar as they jostle for position. Fortunately in the storage space there is no shortage of creativity and invention. We are far from reaching the peak as new start-ups and established players continue to offer up new solutions to the market. HP is very much leading the pack, and with a solid converged foundation to build upon I don’t see that changing anytime soon – irrespective of the waves caused by the ups and downs of the Big Blue…


You can find me on Twitter @ChrisJohnsonHP if you wish to comment...


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