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IBM Spins Down
beggs writes "IBM and Hitachi have signed an agreement which will take IBM out of the hard drive market in three years. This press release on IBM's web site gives some details of the deal. 18,000 IBM employees and all their hard drive related patents will join about 6,000 Hitachi employees to form a new company that will be a subsidiary of Hitachi. Sad to see big blue out of the hard drive business, they have made a lot of contributions to computing." We did a story when they announced their plans back in April.
Especially if they have some inside knowledge on a technology that will wipe out the hard drive market in 10-15 years...
:)
Cash now, AND cash later
All conjecture, of course... but isn't that what Big Blue is about these days? Research, research and more research?
What will stop Hitachi from firing everyone after three years and moving production to cheaper Asia?
Nothing. But that's not a bad thing. All that will happen is 24,000 or so people will be freed up to do something else in our economy. A company like this sounds like it belongs in Asia anyway - America isn't known for cheap duplication of already wide-spread technology. We're more well known for our R&D efforts contributing to the latest in technology. So, I wouldn't worry too much about it - with the speed that our economy is changing, we won't even notice the flux of 24,000 jobs.
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The harddrive market is not really a lucrative bussness anymore. The costs of developping harddrives with larger capacity is almost outgrowing the earnings of selling drives.
IBM has a good reasearch facility which have come up with new methods for storing data. Probably they want to raise money for the production of some of those methods. It's not that that division was skyrocketing their sales revenue anyway...
Umm. IBM has a PATENT division/business, in and of itself. All that arm does is collect royalties, and sign licensing deals.
That alone should be enough to keep IBM in business for decades.
Also note: Certain IBM HDD operations are not included in the deal.
I would suspect this is the research area that is working on the next-generation HDD stuff. I don't think IBM would transfer any existing patents it hasn't already milked all the royalties out of.
"I can't give you a brain, so I'll give you a diploma" - The Great Oz (blatently stolen sig)
Most likely IBM has already technology that will obsolete hard disks. What would be a better way to get rid of expensive manufactory lines than selling them before they get obsolete?
and take some away for his lack of personal experience on the issue, see how he feels about being "freed up" to pursue other employment avenues in 20 years time.
Hey, now, don't get me wrong - nobody likes to be laid off. The reason I can deal with it is because I understand the economics of it all - the economy is a delicate thing. Anything man has ever done to hinder the invisible hand of the free market has always backfired. I'd rather be out of a job for a few months in a prosperous country than to have a stable secure job working for the government in a country of distributed poverty. If you give me a hand-out when I'm laid off and make it easier on me, you stifle my innovation and rob the world of the ideas I would think up when it's sink or swim and I've got to swim if I want to feed my kids. One man's temporary discomfort is better to have than the wasted dreams of a nation living well below its potential because it chooses to distribute the weath of those who have earned it to those who have not.
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IBM has always been tops on the Research and Development in the field of Computer Science. It is not too bad that they are leaving the hard drive market, but actually good that they are doing this. The Hard drives have turned into a commodity. People are making them cheaper and cheaper. At some point, there will so cheap that 1) there will be very little profit margin 2) only a handful of companies will be able to profit.
I'd rather see IBM dump this branch and be able to earn royalty or have stock ownership in this new company than bog down their budget with this sector. By dumping this sector, they can now effectively use their R&D to develop something new. Maybe a new hdd technology, that they will license to the new company.
_______________________________
"I'm not Conceited...I'm just a realist..."
IBM still does a lot of semiconductor fabrication research and licenses the patents out. I would guess this will happen to hard drive technology.
Making chips and hard drives is basically a commodity business. The real money is in developing new methods, products, etc. that can be licensed. IBM is very good at this.
What exactly have you been missing with regards to drivers for your hard disks? Hardly the area where drivers are needed..
According to him, IBM has told its hard drive employees they will not be allowed to move out of that division into anywhere else within IBM until at least one year after the completed sale.
To me, that sounds like something Hitachi might have required, to make sure they're actually getting the teams that are part of the deal.
Basically, what IBM is saying is that the market for storage based on mechanical devices will be gone in the not so distant future. Expect IBM to be a major player in one if not all of these disruptive technologies:
1. Solid State non-volatile memory
2. Bio-electro non-volatile memory
3. Nano-MEMs based non-volatile memory
All this is good, and just a sign that the guys up top at Big Blue know when to get out of what should have been the first thing to be replaced in PC's.......a moving mechanism and primary point of failure in computers.
Real men don't need signitures!!!