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IBM System i division filing for divorce

Big Blue will split the midrange System i server platform into two pieces: one that is enterprise focused and aligned with System p and another that's geared toward SMBs.

IBM Corp. is splitting up its midrange System i server division between high- and low-end models.

The more powerful horses such as IBM's System i5 570 and System i5 595 will be combined with IBM's Unix servers (or System p) and will be called the Power Systems unit. Meanwhile, the smaller boxes will become part of a division of their own that focuses on the small and medium-sized business (SMB) market and will be called the Business Systems unit.

Customers can't stand it when they have to talk to different people for different elements of their infrastructure.
Mark Shearer,
former general manager of System i

The Power processor-based System i servers, which run primarily on the i5/OS , have seen seven consecutive quarters of decreasing revenue. Charles King, senior analyst at Hayward, Calif.-based research firm Pund-IT Inc., said he thinks the move to create separate midrange server divisions is strategic but that it also reflects the difficulty IBM has had in trying to sell the System i line. But he noted that the split is not an indicator that IBM is ready to fold up the server platform.

"I think that the platform has not grown as robustly as IBM would have hoped," he said. "The company has really been pushing hard to move System i into new workload areas to position System i as a platform for applications and workloads outside the traditional System i customer base."

According to King (and to IBM folks as well), System i is caught in a crossroads. Higher-end models compare better with enterprise Unix boxes, while lower-end models -- in particular the i5 515 and 525 Express boxes-- are trying to appeal to the SMB market and compete with x86 servers.

In an internal IBM memo written by William Zeitler, senior VP and group executive of IBM's systems and technology group, the reorganization is meant to "address the accelerating bifurcation in our System i client base between large enterprise and SMB."

The move is part of a larger strategy announced by IBM to create a unified sales and marketing face so that, for example, customers don't have multiple salespeople from multiple divisions selling multiple platforms and confusing things in the process.

"What customers tell me all the time," said Mark Shearer, the former general manager of System i who will now oversee product roadmaps for all Power-based servers, "is that they view us all as IBM, and they can't stand it when they have to talk to different people for different elements of their infrastructure."

As part of the reorganization, next week IBM will announce the first Power6 -based System i machine, months before it initially said it would. At first, Big Blue said Power6-based System i machines would hit the market next year, preceded by Power6-based System p boxes. Shearer said yesterday that the first Power6 System i server will be the i5 570 (although it may be called the i6) and will be available by the end of September. He also hinted that other Power6-based System i servers would be announced before year's end.

Next week, IBM will also announce the latest iteration of i5/OS: version 6, release 1. Again, this release may eventually be called i6/OS, but Shearer referred to it as i5/OS. A main feature of the new release, according to Shearer, will be the "pay-for-what-you-use requests that we receive from clients." Thus users will be able to decide which features of the operating system they need and pay for them accordingly rather than pay for features they don't want. It will be available across the System i product line.

Finally, Shearer said that later this year IBM will introduce a Power6-based blade server that will be capable of running i5/OS, AIX and Linux. This echoes what Bradley McCredie, an IBM systems and technology fellow, said in May when the Power6-based System p servers were announced.

Let us know what you think about the story; e-mail Mark Fontecchio, News Writer.

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