You’ve seen IT silver bullets come and go before? Make no mistake: IBM truly expects data centers to transport to the cloud.

Last week, IBM announced that it was selling its low-end server business to Chinese hardware manufacturer Lenovo. The deal have been widely summarized inside the trade press because the logical results of the commoditization of x86-based servers, in much an analogous way PCs were commoditized a decade ago. And since IBM tends to not compete in low-profit product lines, this transaction was inevitable and makes simple, straightforward sense. If only things were that straightforward!

While it’s true that IBM have been steadfastly moving out of commoditized hardware sales, the timing of these moves was significant. When it sold off its disk-drive business, disks were still good business, however the company saw a way forward for declining margins and shed its HDD unit. Then came the sale of its PC division to Lenovo in 2005. Eight years ago, PCs weren’t yet the low-profit, commodity items they’re today. (Only three years before, HP purchased Compaq largely as a result of its PC market share.)

The pattern here’s that IBM gets out of profitable businesses before they begin a steep descent. Industry analyst IDC projected in 2013 that IBM grossed $3.3 billion inside the low-end server market and affirmed that the corporate was the most important vendor within the space, slightly previous to HP and significantly sooner than Dell. For IBM to drag out of a market sector wherein it held the pinnacle spot, something greater than a straightforward, logical event should have occurred. The corporate need to have seen something others didn’t see or didn’t recognize. And, in truth, it did.

Read the remainder of this story on Dr. Dobb’s.

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