Reports of the demise of IBM’s hardware business continue to be proven dead wrong as Big Blue pulled into a first-place tie with Hewlett-Packard for world leadership in server sales in the second quarter, according to a market study.
Indeed, IBM is moving into the second half of this year with not only great momentum across its hardware lineup, but also without the distractions and/or difficulties that some of the other leading hardware players are experiencing.
While IBM’s surging server business grew 24.5% in the second quarter and allowed it to claim a share of the top spot with HP in rankings compiled by research firm IDC, HP, Oracle, and Dell failed to keep pace as each was coping with strategic hardware issues that IBM dealt with long ago. That point was underscored recently when an IBM executive who was a central player on the small team that created the IBM PC said the personal computer is going the way of the dodo. (For the full story, please see “Personal Computers Becoming Obsolete, Says IBM PC Architect”.)
HP and Oracle are entangled in a snarky legal battle over ongoing support for systems running on the Itanium chip, and that fight cannot mean anything good for the many thousands of customers whose businesses are currently running Oracle software on HP Itanium systems. Oracle says HP is phasing it out and that Oracle is therefore planning to drop support for Itanium, while HP says it has no such plans and will attempt to force Oracle to continue its support for the chip.
By contrast, IBM’s ongoing and extensive investments in its systems architecture—from its entry-level products to its top-of-the-line mainframes—continue to boost the confidence of enterprise customers in the old saw that nobody will ever get fired for buying IBM hardware.
On top of that, HP is now very likely to sell off its massive PC business, which could well have long-term benefits for the company but in the short term will require some serious internal restructuring and external consultations with big customers who will want detailed answers about what they can—or can’t—expect from HP’s hardware business in the years to come.
Over at Oracle, some financial analysts are starting to question whether Larry Ellison’s multibillion-dollar investment in Sun Microsystems was overly generous as it appears Sun hardware will be used at least primarily in Oracle Exadata and other purpose-built systems, rather than being given a chance to compete broadly in the open market. Conversely, IBM has mastered both options.
Dell, meanwhile, has made great strides in retuning its hardware business toward the enterprise market but continues to wrestle with how to improve the performance of its consumer business, and could face the same sort of disruptive transformation HP is now undergoing. IBM took care of that several years ago when it sold its PC business to Lenovo.
Source:http://www.forbes.com/sites/sap/2011/08/28/ibm-thumps-oracle-and-ties-hp-in-servers/

