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IBM Plans Major Hardware Upgrade Next Year

By ComputerWorld Mon, Oct 19, 2009

IBM has disclosed its plans to ship a new mainframe and the Power7 chip as part of its major hardware upgrade next year In a third quarter earnings call, Mark Loughridge, CFO, IBM, said that the company's third quarter mainframe revenue declined by 26 per cent from the year-earlier period.

Nonetheless, Loughridge said IBM is optimistic about the hardware business in the near future in a climate of what he called a return to general stability. The new Power7 chip will offer up to eight cores and increase support for virtualized environments, executives said. IBM has slowly been releasing specs for Power7, which it says will support 1,000 virtualized machines, almost four times the 254 supported by the dual core Power6 chip that was released in 2007. IBM's Power chips support AIX, Linux and the older System I computers.

IBM released its last mainframe, the z10, in February, 2008, and typically releases a new mainframe every three years. If it keeps with that schedule, the new mainframe probably won't be shipping until late next year.

IBM has tried to cut user costs in the current mainframe line by using specialty processing engines, such the Linux IFL processor.

Loughridge also noted that IBM's software's sales improved in the third quarter. He cited a 2 per cent increase in sales of the company's major middleware products, such as the WebSphere, Tivoli, Lotus and Rational product lines.

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