IBM's reported interest in selling parts of its x86 server business to Lenovo may bring major changes to the global market.
IBM is the third-largest seller of x86 servers by factory revenue, with 15.7% of the global market in 2012, according to IDC. That represents $5.6 billion for a company that earned $104.5 billion in revenue last year.
IBM's share of the x86 server segment has declined over the last several years. In 2010, it had 17.4% of the market and $5.5 billion in revenue.
By divesting at least part of its x86 server line, IBM gains additional investment dollars that it can spend on its higher margin efforts, especially its analytics and business intelligence, putting more pressure on rivals in these areas.
Lenovo, which is on its way to becoming the world's top PC vendor, may gain more than an x86 server line. It may also get, as part of any deal, IBM executive talent and capability to reach North American customers served today by Hewlett-Packard and Dell, said Richard Fichera, an analyst at Forrester.
"No Asian company has figured out to date how to sell to North American enterprises," Fichera said.
But there is no guarantee that Lenovo will be able to keep and expand on IBM's x86 server market share. It could lose it as well.
"Anytime there is a shift in players, there is always an opportunity to shift market share," said Jean Bozman, an analyst at IDC.
Analysts don't believe IBM will divest all of its x86 systems. It is expected to keep its new integrated systems, its PureSystems, which have been engineered for specific tasks, such as business intelligence and data analysis.
The only unexpected part of an IBM divesture is the timing. The company sold its PC business to Lenovo, it has also exited the hard disk drive and printer manufacturing business.
"IBM has never been shy about divesting businesses," said Charles King, an analyst at Pund-IT. And as with the PC, printer and disk drives, the low-end x86 server market "is heading further and further into commodity territory."
Ginni Rometty, IBM's CEO, appears as interested in jettisoning commodities as her predecessors.
Richard Partridge, a Gartner analyst, said in IBM's most recent annual report, Rometty makes clear that the firm has no interest in being a commodity seller. "Ours is a different choice: The path of innovation, reinvention and shift to higher value," she wrote.
For IBM's x86 customers, Partridge's advice is to sit tight. It will take months for any divesture to complete. "Once details become clear, then customers can ask how well the different x86 servers integrate with other IBM server lines," he said.
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