Single-minded IBM joins server groups

Big Blue's vision of a single server division starts taking shape with the AS/400 and RS/600 resources under one banner.

IBM is combining AS/400 and RS/6000 manufacturing and marketing in ath the AS/400 and RS/600 resources under one banner. bid to cut costs worldwide and establish a single server division that will eventually encompass mainframe and PC servers.

The organisational overhaul was initiated by Bob Stephenson, IBM's former PC chief, who replaced Nick Donafrio earlier this year as head of servers.

Stephenson will head the server group. Working with him is William Ziegler, recently appointed general manager of server brand marketing and former head of AS/400 worldwide.

As part of the consolidation, products will be manufactured in Rochester, Minnesota. Stephenson will be based at the combined worldwide marketing headquarters which will remain in Somers, New York.

An IBM representative confirmed this was a preparatory step towards merging the two divisions and instituting headcount reductions, but refused to say how many people would be affected.

Dave Andrews, head of US consultancy DH Andrews, said: 'The server business has been struggling over the past year and Stephenson's brief is to cut costs. The long-term aim is to have all four server businesses consolidated into one, and it's a very positive move if he can pull it off.'

He added: 'There is a high degree of creativity coming from Rochester and IBM wants it to impact the rest of the company, to let Rochester flow everywhere. But it's wrong to say the division will be under Rochester's control. There has been a fair amount of cross-pollination between AS/400 and Unix. Even at its most competitive, IBM loaned talent across the two businesses. The important thing to come out of this restructuring is that there will not be four server divisions but only one with the requisite skills and staff.'

Keith Woods Holder, managing director of UK market forecaster KWHR, commented: 'We don't know the practical consequences yet in terms of channels and jobs, but the surprising thing is that it has taken IBM so long to do this.'