While the NBA is busy crowning a new champion, IT hardware vendors have their own, courtesy of a top-10 list from the London-based market research firm Business Insights. The number one spot is held by none other than IBM.

According to a report released in September 2006, IBM's revenues in 2005 were $91.1 billion. The IBM figure was slightly higher than that of second place Hewlett-Packard and substantially more than that of third place Dell.

Unlike those two companies, however, IBM captured the top slot while exiting the commodity PC business. The company attained its ranking through a combination of continued innovation, timely acquisitions, and appropriate marketing efforts. Even if the System i hasn't had a stellar recent performance, "They [IBM folks] have been been getting it right on many levels," says Eunice Johnson-idan, business development manager for technology at Business Insights.

On the server front, Business Insights found that IBM has been moving technical innovations from its mainframes down into lower tiers. Some of these enhancements are found in the chips within the servers, with advanced processes such as silicon on insulator devices. At the same time, implementation of virtualization and partitioning technologies, originally developed for high-end servers, has benefited less powerful systems. There have also been improvements specific to particular products, such as the hardware refresh of the System i server line with Power5+ processors in 2005.

Bob Djurdjevic, president of market research company Annex Research, isn't surprised by IBM's ranking. He notes that hardware as a whole has been one of the bright spots in the company's performance for the last couple of years. System i in particular had a good year in 2005, reversing a downward revenue trend that had been evident for awhile. However, he doesn't believe the uptick happened because of any changes to the hardware platform, in part because hardware sales make up only one-fourth to one-third of the total sales for the product line.

System i revenues come from a combination of hardware, software, and services — all enhanced by the offerings and efforts of independent software vendors (ISVs). Indeed, that last component is the most important, according to Djurdjevic. "Probably 70 percent plus of IBM's revenues from System i come from independent partners."

Customer buying decisions support the impact that ISVs have on System i sales. Many times customers purchase a System i because a particular ISV application runs on it. In addition to application pull, there are also cases of the hardware push in which a customer buys the platform first and then discovers the software necessary for a particular job.

One consequence of the application focus is that System i customers are largely immune to technology tweaks, Djurdjevic says. Thus, he contends, 2005 marked a turnaround from previous years not because of the technology refresh, but because IBM put some marketing muscle behind the platform. As for the recent sour note of 2006, he says the System i suffered in comparison to 2005 because 2005 was such a strong year. Beyond that, the revenues of the product line are likely to be driven by what boosted sales before. "It's marketing and not technology," Djurdjevic says.

Looking at the larger picture, analysts expect that overall, IBM will stay at the top by fostering innovation and bringing companies on board to push products. There also may be a stronger effort coming from IBM and other vendors to provide a one-stop shop for customers by linking and unifying different types of hardware and services. Customers would then be rewarded for loyalty with upgrades that impact other business areas.

Johnson-idan of Business Insights notes there's a reason why vendors are offering one-stop solutions. It's the same reason why top-10 lists may not need to be as extensive in the future as they have been in the past. "There's a lot of consolidation going on, especially in hardware development."