With AMD's fade out from the server market and the rapid decline of RISC systems, Intel has stood atop the server market all by itself. Its server share is well over 90% and growing as the top of the Xeon family gain mission critical features and it becomes a viable alternative to RISC in mission-critical scenarios.
But now there's a new threat to Intel, and it comes from a firm that never went up against Intel in the past. IBM, through its OpenPOWER Foundation, could give Intel and its server OEMs a real fight in China, which is a massive server market.
IBM created OpenPOWER in late 2013 as an ARM-like effort to license its Power CPUs and motherboards in an effort to get more server vendors selling Power servers. Hey why not, that's how the PC grew into ubiquity in the 1980s. IBM has rapidly gathered more than 100 partners, from Nvidia and Tian to Google and Ubuntu.
Now, as the investor group Motley Fool notes, OpenPOWER is a threat to Intel in the Chinese server market because the government has been actively pushing homegrown solutions over foreign technology, and many of the Foundation members like Tyan are from China.
This means Chinese companies can build locally sourced Power servers and even Power chips, which would be more agreeable to the Chinese, even if the technology ultimately did originate in the U.S. The OpenPOWER servers use IBM designed CPUs and motherboards as well as Nvidia GPU technology for compute acceleration.
Tyan will be the first manufacturer to offer a non-IBM Power server. It will be a two-socket system aimed at Internet Service Providers and cloud providers, and it's expected to be available during the second quarter of this year. The Fools believe this server will be far less expensive than an IBM branded Power server, which will get around the price barrier.
This may be one market but it's a big one. The article says that in 2014, China imported $23 billion worth of servers, which is about half of the $50 billion in server sales for 2014, according to IDC. You better believe HP and Dell will take notice.
The Fools forgot one important element though: Lenovo. It purchased IBM's x86 server business last year and it's very much a Chinese firm. The company is huge in its native China already in PC, tablet and smartphone sales. Having servers will only enhance its offerings because now it can offer Chinese businesses a complete bundle.
If China is as anxious to buy locally as the Fool article claims, Lenovo is going to make some serious bank. With x86 servers there is a much larger software stack than there is on Power. I'm rather surprised there is no mention of Lenovo at all, if the driving force behind OpenPOWER is to buy locally, because it certainly has to be taken into consideration.
Closer to home, I'm curious to see how well OpenPOWER takes off. IBM is now offering bare metal Power systems through its SoftLayer subsidiary and Rackspace is preparing to do the same thing. Are we seeing a RISC revival, with OpenPOWER and Oracle's commitment to Sparc? I hope so. The server business is boring these days.