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IBM, Intel to Allow Patent Use for Free

The move will make it easier for companies to make products that will work on blade servers.

September 03, 2004|From Bloomberg News

IBM Corp. and Intel Corp. said Thursday that they would let companies use the patents behind some server computers for free to help spur demand.

The change will make it easier for hardware and software companies to develop more products that work with IBM's so-called blade servers, computers shrunk to a single circuit board, IBM Vice President Jeff Benck said. More choices will drive interest from new customers, he said.

IBM is trying to widen the acceptance of blade servers, now used by only the most tech-savvy clients. The machines can cost less than full-size servers and let companies add more computing power as needed. The market will grow to $9 billion by 2008 from $580 million in 2003 and will represent almost 29% of the servers sold, according to market research firm IDC.

"This is something they needed to do to drive growth and innovation," IDC analyst John Humphreys said. "They already got the first adopters. Now they have to get the mainstream."

The increase in blade sales also adds to IBM's support of the Linux operating system, which competes with Microsoft Corp.'s Windows. More than half of the blades shipped run Linux.

Armonk, N.Y.-based IBM, the world's biggest computer maker, and Intel, the largest chip maker, developed and introduced BladeCenter servers about two years ago. IBM had 44% of the worldwide market in the second quarter, according to IDC. Hewlett-Packard Co. had 32% and Dell Inc. had 3.3%.

IBM shares rose 35 cents to $84.57 on the New York Stock Exchange.

Shares of Santa Clara, Calif.-based Intel rose 20 cents to $21.63 on Nasdaq.

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