IBM Ramps Up i5 Line So That Supply Meets Demand

by Timothy Prickett Morgan

For a while there, demand for the new eServer i5s was outstripping supply. Now IBM is able to meet demand. That's a good sign, right? I surely hope so. According to internal IBM reports on the situation that I have seen, the lag between order and shipment dates for i5 machines is shrinking, and the lags IBM had in the first few weeks of shipments were nowhere near as serious as the delays it experienced with iSeries shipments in early 2000.

That is a relief, to be sure. In early 2000, IBM's copper chips were the hottest things in the market (because they ran so cool, ironically), and Big Blue could not keep up with demand for the PowerPC chips that used silicon-copper technology among its various server units and OEM customers, like Apple. The AS/400 and iSeries line got the short end of the stick when it came to PowerPC chips and order fulfillment, and shipments took a dozen or more weeks to be filled for many machines. IBM likes to build and ship a machine ordered by a customer or a reseller in one week, and sometimes will settle for a two-week window.

A few weeks ago, when IBM first started shipping the new eServer i5 machines, some models of the Model 520 servers took as much as eight weeks to be shipped upon order, and Model 570 configurations took two weeks to ship. According to a report dated June 28, IBM's Rochester factories were estimating that they could ship an order for a Model 520 server in about eight weeks, and a Model 570 took four weeks to be shipped. The iSeries Model 825 machines using Power4 processors took three weeks to ship, according to that report, and Model 870 servers using the same CPUs took seven weeks to ship; the other iSeries models took one or two weeks. Like many people watching this situation, I thought, "Here we go again."

But as I write this article on July 1, IBM has either ramped up production or demand has tailed off as we enter the Independence Day holiday week (or a little of both has occurred). Now IBM says that it can make and ship a Model 520 or Model 570 server in two weeks, and that all the machines in the iSeries line can ship in one or two weeks.

By comparison, the pSeries servers that are also made in the Rochester, Minnesota, factory, where all of the i5 and iSeries machines are made for the Americas market, are taking anywhere from one to three weeks to ship, and some features for these machines take as much as 18 weeks to ship. By comparison, the i5s are doing fine.

Let's just hope this means the machines are selling well and that demand is not weak. There really won't be any way of telling until the third quarter (the first full quarter of availability of the i5s and i5/OS) is finished, at the end of September, whether the lack of shortages of i5s right now have to do with ramped up IBM production or tepid demand.