IBM Acquires Sequent Computer Systems for $810 Million to Enhance Server Line

Strategic Insights -

IBM aims to boost its flat revenue in the server line with the acquisition of Sequent Computer Systems, a move that will allow the tech giant to integrate Sequent's NUMA-Q technology into its product portfolio. This technology enables complex computing networks with both Unix and Windows operating systems to work together seamlessly. The acquisition is crucial for IBM, as it will enable the company to string together its Netfinity servers, which run on Intel processors and Windows NT. According to Bob Stephenson, in charge of IBM's $15 billion server business, "NUMA will be the defining technology on Unix and NT servers."

Key Takeaways:

  • IBM is acquiring Sequent Computer Systems for $810 million to enhance its server line and integrate Sequent's NUMA-Q technology.
  • The acquisition will enable IBM to string together its Netfinity servers, which run on Intel processors and Windows NT.
  • Sequent's NUMA-Q technology allows complex computing networks with both Unix and Windows operating systems to work together seamlessly.
  • IBM's server business revenue has been flat, with a growth of about 10 percent to $15 billion in 1997, according to International Data Corp.
  • The acquisition is part of a broader initiative by IBM to enhance its product portfolio and compete with industry leaders such as Sun Microsystems and Hewlett-Packard.
  • Sequent's 2,500 employees will remain part of the merged entity, which will be based in Austin, Texas.

Statistics:

  • IBM is spending $810 million to acquire Sequent Computer Systems.
  • Revenue from IBM's server business grew about 10 percent to $15 billion in 1997, according to International Data Corp.
  • International Data Corporation forecasts that sales of Windows systems in the enterprise market will grow from about $9 billion last year to $27 billion by 2003.
  • Sales of Unix systems are expected to total $37 billion, up from about $27 billion last year.
  • Sequent lost $52.5 million on $784 million in sales last year.

Sources:

  • "IBM Acquires Sequent Computer Systems," The Statesman
  • "International Data Corp."
  • "Robert Foster Group research company"
  • "Casey Powell, Sequent Chief Executive"
  • "Gerry Hackett, vice president of AIX development"
  • "Intel Corp."