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IBM announces Power7 servers

On Tuesday, IBM CFO Mark Loughridge announced that the company's Power7 chip will begin shipping by the end of the first quarter of 2010.

On Tuesday, IBM CFO Mark Loughridge announced that the company's Power7 chip, which is expected to give two to three times the processing power with the same energy consumption, will begin shipping by the end of the first quarter of 2010. The information was dropped during a conference call regarding the company's 2009 Q4 financial performance. IBM plans a phased roll out of the chips based on customer demand and could try to make a play for Sun customers, who may be dismayed depending on the contents of the Oracle announcement about Sun next Wednesday.

Although the best of the new processors will outperform anything made by competitors Intel and AMD, x64 chips from those companies are expected to be comparable in performance to the lower end chips in the Power7 line. The new offerings from IBM are manufactured using a 45 nanometer process and come with four, six, or eight cores. The new chip line represents the processing power of the 1 (sustained, not peak) petaflop supercomputer dubbed "Blue Waters" installed at the University of Illinois late in 2009. IBM will offer field upgrades to customers with Power 570 and 595 products.

IBM is hoping that the new chip line will inject some life into the hardware division, as commoditization and the global economic woes have cut into sales. The division that contains the p- line of servers had sales that were down by 14%, compared to the 27% decrease in mainframe hardware. The division saw a modest revenue decline of 4.3% because the x86 based System x line increased its sales by 37%.

Big Blue has continued to consistently make a profit and increase revenue, even through the burst of the tech bubble in the early oughts and during the most recent economic downturn. The company has done this by constantly revamping its offerings, driving more of its business to services, and offloading business units whose products were becoming commodities.

Do you think IBM's new hardware offerings will help to buoy the lagging hardware division's profits? Share your thoughts in the discussion.

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