IBM Pushes Competitiveness as it Opens Its Source Code to China

October 20, 2015

IBM took most of the world by surprise as it made a pivotal decision by opening up its
source code for review by the Chinese government. The proprietary technology is usually
heavily guarded by companies of the industry.

The Wall Street Journal was first to report about IBM’s decision allowing China’s Ministry of
Industry and Information Technology to view its source code in a safeguarded environment
to avoid the leakage of information. This, combined with IBM’s move to license its Power
chip architecture to China’s chip designers in the year 2014, emphasizes the fact that IBM is
looking to compete against Intel in the server CPU market with the assistance of China’s IT
industry.

At this time, the x86 architecture accounts for 95% of the global server processors. The
increasing demands of the server markets have undoubtedly given Intel a distinct advantage
over other companies. IBM’s tactic of opening up its platform through the Open Power
Alliance is in anticipation of co-operation from China’s IT industry.

IBM is hoping to secure a position in the highly profitable Chinese tech industry where IBM
has seen a notable drop in power server shipments because of the US PRISM program.
Sources from the server supply chain believe that IBM’s move can create a change in the
Chinese IT market for IBM servers.

IBM strategically timed its move as it comes just days after the company’s decision to make
its Bluemix platform available in the Chinese market. IBM may have made a strong move
under the Obama administration, however, it is not the first company to open its source
code for viewing. Microsoft took similar steps earlier to open the Windows source code to
the governments of China, Russia and UK.

With the competitiveness of the IT industry, there is a possibility that other companies may
follow down this path, however IBM has made it clear enough that it has no intention to
leave the Chinese IT industry unexplored.