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IBM to Exit Hardware Business?

Could IBM be looking to lighten their workload and workforce by re-basing all of their OS offerings on top of Linux?

A few weeks ago, IBM threatened patent infringement against Hercules, an S/390 emulator. This was very odd, both because IBM was breaking its patent pledge it made for Linux and because IBM itself recommended customers use Hercules. Why would they do this? … unless they were getting into the business themselves. IBM wants to own Hercules, somehow, it’s fully working and debugged, and they don’t want anybody to be able to get it except from IBM.

Now, there is rumor afoot that IBM is going to redo OS/2 as a set of libraries on top of Linux.

In parallel, IBM is looking to move as much of its operations to low-wage jurisdictions as fast as possible. But surely they have to keep some of them in the US to service the vast hardware base, right?

Not if IBM is getting out of the computer hardware business. And at the same time, offering all of their operating systems platforms on top of Linux. The Linux guys will keep the commodity hardware supported, that hardware is plenty fast and scalable, is becoming reliable enough, especially with Xen and KVM hypervisors. Heck, linux can already run on most of IBM’s hardware, but even that will appear slow compared with commodity Intel servers five years from now (that’s 3 Moore’s doublings, or 8 times faster than today). And if you need more power, just add nodes, the IBM software will probably handle that too (though they may be reserved enough not to call it ‘cloud’ anything). Say, even non-IBM Linux customers might buy that.

How hard would AIX compatibility be, really? OS/400 already runs well along-side Linux on the IBM hypervisor, running on top shouldn’t be that big a deal. Yet customers expect IBM’s operating systems to keep pace with the features that Linux is providing, and IBM doesn’t have the resources to do that across its OS line – nobody does.

Not to mention that many IBM customers are leaving IBM for Linux already, so why not get out in front of these folks, and provide them with a migration path where they can continue to pay IBM some recurring revenue for an easier migration plan? Maybe buying some IBM services to implement it?

Sure, there’s revenue in all that hardware, but is it really more profitable than a software-only play, considering all the expense that goes into it, especially the cost of US employees? Software is easier and cheaper to produce, and more so when all of it can be done from India and China.

Look for a letter soon to IBM’s biggest customers, advising them to plan to migrate their systems (perhaps without any downtime) to IBM Services for (whatever) on Linux by the end of 2015. And there won’t be Open Source competition for those services – IBM will hit them with patent suits if they try. At the end of it all, IBM will be the reason everybody realized GPLv3 was a good idea.