After another dismal performance in its System i server division last quarter, IBM ( IBM) is apparently shaking up its hardware group to re-invigorate the longstanding product. According to longtime IBM observer and shareholder Bob Djurdjevic of Annex Research, IBM has recently created a small- and medium-sized business SMB division in the hardware group to develop the SMB market, with System i "as the vehicle chosen to underpin the effort." Amid its fourth-quarter earnings report earlier this month, the company said System i revenue fell 10% (14% at constant currency) compared with the year before. It was a familiar result: This was the fifth sequential quarter that System i revenue declined. In the third quarter, System i sales dropped 22%. While not a cash cow like IBM services are, the company's hardware segment is still an important part of the business, representing about a quarter of overall revenue. IBM does not break out revenue for its individual server products. Many IBM investors agree that System i needs a shot in the arm, and targeting smaller businesses would make sense. "One issue with IBM is so much of their customer base is large corporations," says Bill Gorman, vice president of PNC Wealth Management, which holds IBM shares. In terms of the company's exposure to SMB, "I would say there's room to grow there."