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Big Blue Has a New Angle
Charles King, principal analyst at Pund-IT, told us the $1 billion investment obviously resonates with the $1 billion Linux investment IBM made in 2000. But now that the situation is completely different than it was then, he believes Big Blue's new investment is more tactical.
"That's partly because Linux today is deeply in the IT mainstream, and a known entity that is core to the operations in thousands of data centers," he said. "That's especially the case in hyperscale cloud computing infrastructures like those owned by Google and Facebook."
As King sees it, IBM's strategic investment in Linux helped make that reality possible but the effort also delivered profound tactical value and financial benefits to the company, especially its mainframe division. IBM's Power Systems are particularly well suited to the cloud and big data applications, he said, and this new Linux investment should also help bolster the market presence of Power solutions.
Should Microsoft Be Worried?
"I doubt Microsoft is directly concerned about this effort but it does underscore one of the company's biggest problems -- that despite the commercial market leadership position of Windows Server, its presence in cloud and hyperscale data centers outside Microsoft's own Azure is miniscule," King said. "Plus, if IBM's new investment triggers a boost in Power Systems sales analogous to what the 2000 Linux investment did for IBM's mainframe systems, it would also effectively shut the door to Microsoft in many lucrative, high-end markets."