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IBM Aims to Threaten x86 Server Dominance

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Aug. 25 2015, Updated 6:06 p.m. ET

OpenPower and SuperVessel seek to threaten x86 server dominance

In the last part of this series, we discussed IBM’s launch of SuperVessel. Through SuperVessel, it opened access to software tools and cloud applications in the areas of analytics, IoT (Internet of Things), and machine learning. IBM aims to enhance and broaden the adoption of Power Architecture-based hardware.

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Earlier in the series, we discussed the price performance of IBM’s OpenPOWER chips compared to Intel’s (INTC) Xeon offerings. The comparison showed that its OpenPOWER offerings provide better performance per dollar spent. The Power platform has higher memory bandwidth and multi-threading capabilities compared to Intel’s designs. It appears that IBM’s POWER 8 will successfully fill the void left from its divestment of the x86 server business that’s dominated by Intel.

In a targeted vertical market like education, where x86 is dominant, IBM aims to strengthen its foothold through its recently launched SuperVessel and OpenPOWER Foundation.

IBM has identified HPC to boost its Power processors

In 2Q15, IBM along with its OpenPOWER partners—NVIDIA (NVDA) and Mellanox (MLNX)—announced the HPC center in Montpellier, France. This center aims to provide technical support to developers to create high-performance computing, or HPC applications, using IBM, NVIDIA, and Mellanox’s technologies.

IBM aims to launch its branded HPC solutions in 2015 and 2017. To cater to the HPC demand, IBM along with its OpenPOWER partners will also offer a vast array of Power-based solutions.

If you’re bullish about IBM, you can invest in the Technology SPDR ETF (XLK). XLK invests 3.51% of its holdings in IBM.

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