While we all get excited about the big quad core and multiway boxen, most of the sales come from one and two processor servers. As IBM say, this is a way to extend the combined reach of IBM and Lenovo into areas which they couldn't reach.

This is Dell territory, where all that will ever be purchased is hardware and break/fix service. The key (perhaps only) differentiator here is price, and this will enable IBM and Lenovo together to kick Dell. Sun have shown that you *can* break into the x86 server market from above (though the big three are still miles ahead), and I would be amazed if Lenovo can't do so from below.

IBM has ~ 12% market share, which is dwarfed by HP and Dell's share of the X86 space.

They have the worst blade story of the top 3 and their products are overpriced in comparison to Dell's.

Net, IBM is unable to compete with Dell and HP, who have a better range of products, better blades and better management story.

In the case of Dell, they will never catch up in terms of price-performance, performance-per-watt and superior direct enterprise support model.

I suspect that the only reason that IBM even has that much share is due to the amount of X86 they throw in with P-series and z-series sales to keep the competition at bay, their services hosting business and/or selling into obscure regions of the world that aren't yet well served by Dell.

@AC: Don't work for Dell by any chance? Seriously - anybody who says that Dell have a better range of products and a better management story than IBM needs to wake up and smell the silicon. IBM may have their faults, but their range of products and *services* (which are all-important considering they're not in the market of competing at commodity level) exceeds that of Dell and HP combined.

"Overpriced in comparison to Dell"

It's called a Value Proposition as opposed to a commodity market. Glad the customers understand the difference even if you don't (see IBM Q4 results for proof).

"IBM is unable to compete with Dell and HP"

See above - IBM Q4 and FY07 results.

See, you're making me angry now. I'm not claiming to be completely unbiased (I purchase, install and use IBM products on a regular basis), but your uninformed Dell trolling gets my goat.

</rant>

The higher end xSeries stuff is way superior technology to Dell (i.e. custom chipsets, not PC servers) but won't compete on price. Might as well hand that off to the cheap box pushers to do instead, not much money there any way its only something you have to do to save face.

".... it's a tactical withdrawl to more easily defended territory!" Namely, their mainframe bizz! Guess there x86 business model last year went something like "Sell Dell license to BladeCenter...."

XD

Dells PSU's are typically the worst AC to DC conversion from all of the Tier 1 manufacturers. They have changed their blade design 3 times with no backward compatibility.

Tell us again how good they are.

Here me thinking most of Dell's components were reused and IBM's, hence the quality difference of IBM and the price. Lenovo will keep the design, buy components and tech from IBM and lower the price.

AC: "overpriced in comparison to Dell's"

I'm sorry? How the f*** can you compare Dell's offering to that of IBM? It's all about bang for your buck.

Having worked for both Dell, IBM and Lenovo I can tell you all that this move by IBM has been expected since shortly after the sale of the PC business to Lenovo.

I shall refrain from speculating about who has the best quality - the black & white world of fan boys never stops to amaze me.

I would very much doubt any massive inroads made by Lenovo in server market. They will most likely hang on to the present % IBM has and then hope that in time they will be able to bring in HW from their existing server business in China/Asia.

I think it is naive to think that Lenovo will be better to execute in this market space, using IBM technology, than IBM already was.

This history of the PC business merger already shows that. Lenovo has used the well known old think brands from the IBM days to introduce and leverage their own branded HW - and still they have been overtaken by ACER the last year.

It makes sence for IBM to get rid of a business they have no interest in any longer - and Lenovo get's a chance to take over an existing market share and presence. The outcome to the markets will be extremely insignificant and the losers will be the buyers who will no longer get servers driven through the R&D machine of IBM.

As an old school avid fan of IBM servers and notebooks I am unhappy to hear they are going to put there servers in the hands of Lenovo who imo have managed to ruin Thinkpad's.

Anyone that thinks I'm wrong should compare an IBM made T42P with a Lenovo made T60P. Also driver issues abound especially in the Wireless and VGA sections.

IBM's one and two way servers or Lenovo's ability to make them.

i can however speak from experience on dells one and two way servers, and their support for them, they suck, the servers suck, and for their support, it should be illegal to call what they offer their customers support, its anything but.......

I've worked for IBM and Dell and have hands-on experience of HP, IBM, Dell and several other X86 vendor products, having consulted in this space over the last few years.

IBM's custom chipset in the 4+ slot machines although interesting when it was first released is inferior to that now provided by Intel with their latest chipsets. I think that IBM didn't feel the need to keep up, or couldn't justify the R&D.

AC has a point on systems management - Dell's Open Manage has come a long way on their regular servers and anyone in the X86 space who hasn't taken a look at their new blade product will be pleasantly surprised - Mac/IP assignment to slot Flex IO and 17th blade for management. You can get more from IBM but you have to pay for it via Tivoli. Director is free and it's got most if not all as Dell's free stuff, but it's not as simple to use for installation and maintenance in my opinion.

AC is correct regarding price point - IBM is unable to compete in this space with Dell. It's the same as the PC business - they got out of consumer because they were unable to compete. They got out of the business PC business because they were unable to compete. IBM is making money (very good money!) globally on services, mainframe, software etc but not in the X86 server space. Why else would they turn this over to Lenovo?

I have a concern about the future - is Lenovo buying existing design IP? Rumour had it that OBM laid off most of the blade design team and has moved to an ODM process versus an OEM model. Will Lenovo just do to the same SE Asian design houses and cut out the middle man?

Street price right now favours Dell over IBM. As a consultant, I constantly advise IBM customers to get a quote from Dell - and to let their IBM reseller know that they are doing that. Even if they are not serious about switching, the Dell price will be an eye opener and the IBM price will go down significantly.

Regarding the comment about PSU's, Dell has had best price-performance for quite a while - they also have an Energy Smart range of servers with high efficiency power supplies and other components (HP and IBM do not).