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IBM Introduces New Power Server Amid ‘Repositioning’ of Unit

April 23 (Bloomberg) -- International Business Machines Corp., seeking to revitalize hardware sales, introduced a new Power Systems server with an open platform that gives programmers more flexibility to develop uses for the device.

IBM spent $2.4 billion in more than three years to create the hardware, which is used in data centers. The system has more than 11 miles (18 kilometers) of copper wiring, which helps the servers process large amounts of data, the company said today in a statement.

The new offering comes after a 22 percent decline in first-quarter sales for Power Systems, a unit which Chief Financial Officer Martin Schroeter this month said the company is “aggressively repositioning.” The new products are designed to address growing areas like cloud computing and data analytics, helping IBM counter weak demand for older hardware that has dragged down total revenue for eight straight quarters.

“We are thinking differently about how to help clients transform their business with the right infrastructure,” Tom Rosamilia, IBM’s senior vice president for systems and technology, said in an interview. “This is leveraging a lot of the things we’ve done with open systems before but never really around the hardware.”

IBM, based in Armonk, New York, got advice in building the servers from fellow members of the OpenPower Foundation -- a 25-member group of companies that support open-source technology. Members of the group, which includes Google Inc. and Nvidia Corp., are working with IBM and on their own on other technology based on the same Power8 processor chip that the new Power Systems servers use.

The new IBM systems will sell for around $8,000, which is about $2,000 less than past models, Rosamilia said.

To contact the reporter on this story: Alex Barinka in New York at abarinka2@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison, John Lear

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