Different Markets

By eweek  |  Posted 2004-03-01 Print this article Print

You seem to be looking at different target areas, different markets. I think that would be fair to say. For the last six quarters, according to IDC, we have outgrown Dell [in Intel servers], which is an important thing for us because Intel servers are the fastest growing part of the market. And we want to make sure, not only are we just growing faster than the market, but that were growing faster than anybody in the individual segments in the market.
2004 looks to be an important year for IBM and its servers. Youve got the Power5 processor coming out, youre continuing to push Linux on the Power platform, blades are going to become an even larger part of the market. What are the crucial points for IBM this year?
I agree that 2004 is a critically important year for IBMs server business and in the systems business overall for the reasons that you talked about, but also because over that last three years, we have been gaining in a down market. We have been gaining by virtue of taking share from others as the market declined. It is pretty clear that the market is coming out of its decline. Its not going to grow probably like it did in 99 and the first part of 2000, but the last two quarters have been flat [or] up a little bit and I think youll see that going forward. Youll see people invest in new kinds of applications, new kinds of systems uses for a whole variety of reasons, not the least of which there has been kind of a step-level improvement in price/performance, and any time you see that—and it came because of Linux, and it came because of accelerating commoditization and things like that—it eventually opens up new uses for technology, new applications areas. We have an enormous amount of product coming to market [in 2004], which is the result of the investments that we have been making over the last couple of years. [The newly released four-way Xeon blade server is] going to keep the really solid momentum we have behind BladeCenter and the whole BladeCenter Alliance program. What were trying to do here is define kind of the de facto industry standard. We and Intel think one of the biggest inhibitors to the adoptions of blades was the fact that there was no standard. That is why we have been pretty freely licensing this. Weve got something on the order of 200 companies part of this alliance, and I think this is going to see continued acceleration this year. Weve got the Power blade shipping in volume this quarter, the four-way shipping this quarter and a whole host of things coming. The second major program we have coming this year is the "Squadron" program, which is going to be the new Power5 refresh for all of iSeries and all of pSeries and all of our storage subsystems. We have been working very diligently on not just the hardware technology but the systems control technology that we think will differentiate these products and allow us to continue to gain share, particularly in the high end of the Unix space. Next page: Importance of Linux on Power.


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