IBM launches Intel server challenge

IBM and a consortium of semiconductor players are planning to build the userbase for IBM microprocessors beyond its limited current market, essentially staking a claim on Intel’s traditional territory.

Although IBM Power chips are primarly found in the company’s own servers, a group of semiconductor companies are planning to open them up to licensing, with licensees then able to use IBM’s designs in their chips. Nvidia is backing the plans, while Mellanox and Tyan are also on board.

This may in part be a reaction to a 25 percent year-on-year decline for Power based systems, the WSJ points out. Intel’s dominance in servers, with its x86 chips, is challenged somewhat by IBM but revenues have declined.

If it can spur on the industry to accept further competition, IBM may be able to drive up revenues for Power.

IBM veep Bradley McCredie told the WSJ that the company “absolutely wants to get into a broader ecosystem, that is why we are doing this”.

First from IBM will be Power8, which the company is expected to explain in further detail some time this month.

Nvidia hopes that IBM opening up its target market could help it further push its graphics chips in Power servers. An Nvidia GM, Sumit Gupta, said IBM “knows enterprise computing best” and has “one of the best sales teams out there”. Tyan’s GM Albert Mu, meanwhile, hinted that IBM-led competition is essential, telling the Wall Street Journal that server buyers “now have no choice – it’s like 100 percent Intel”. Tyan has top server customers like Amazon and Tencent Holdings that the group will be trying to woo.

Intel maintains a tight grip on the server market, but is beginning to face challenges from ARM licensees who believe power efficiencies and wider customisation could undermine the company’s near-monopoly. AMD is on board with that idea, recently committing to ARM chips as well as x86.

IBM has its work cut out, but considering its industry relationships, cash, and dedication to R&D, if a company has a fighting chance, arguably it is Big Blue.