IBM Partners with Samsung for Cutting-Edge Chip Technology

IBM looking to grow its Systems segment’s revenue

IBM (IBM) suffered from an overall revenue decline last quarter. However, its Systems segment showed positive revenue growth. This segment comprises three sub-segments: IBM Z, Power Systems, and Storage Systems. IBM Z is the family of mainframes while Power Systems are the processors based on the Power architecture.

To boost the Systems segment’s growth, IBM announced a partnership with Samsung (SSNLF) today. As per the press release, Samsung will manufacture seven-nanometer microprocessors for IBM Z, IBM Power Systems, and its cloud products. The press release explains, “This combination is being designed to drive unmatched systems performance, including acceleration, memory and I/O bandwidth, encryption and compression speed, as well as system scaling.”

IBM needs to grow its IBM Z systems business in order to compete with Cisco (CSCO). According to Datanyze, Cisco Unified Computing System leads the server hardware market with a 28% share. IBM System i and Nutanix (NTNX) are ahead of the fourth-ranked IBM Z. EMC Vblock and NetApp’s (NTAP) FlexPod are smaller players in this market.