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IBM In Talks To Sell x86 Server Business To Lenovo
FrankPoole writes "According to CRN, IBM is in serious negotiations to sell its low-end x86 server business to Lenovo, which is looking to grow its server revenue. If the deal goes though, it will be the second time in eight years that Big Blue has exited a major hardware business and sold the operation to Lenovo. IBM sold its PC business to Chinese computer maker in 2005."
The summary should probably also mention that IBM sold off their entire storage division to Hitachi...
Margins are pretty tight in that business. They'll do much better stcking to their mainframe business charging ridiculous prices for MIPS to customers that can't afford the cost of migrating.
That's it, boys! Sell all that you own to the Chinese so you might have another decade of living the high life while doing nothing to earn it.
All that Western civilisation collectively worked on in the past 200 or so years has been given away to the Chinese for peanuts so we can sit on our collective asses and do nothing for about 20-30 years. Do you think that China will be paying us royalties once they figure out how to make a Core i7 processor themselves? F**k no, experience should tell you better.
When IBM decides to throw away its garbage, Lenovo will come begging
Muchas Gracias, Señor Edward Snowden !
but they ought to just drop the M and call themselves 'International Business'.
Correction: 'India Business'.
If how Lenovo shat all over the ThinkPad line is any indication, you'll be sorry if you don't abandon ship now.
They've still got System Z mainframe line, and I can't see them selling that business unit off
...and they also still have the IBM Power Systems line (Power Architecture boxes running IBM i, AIX, and Linux).
You sir are a genius! How could no one in any of those huge companies with thousands of attorneys and accountants come up with your idea? Please give me your contact information so I can warn them of their impending errors.
Only the State obtains its revenue by coercion. - Murray Rothbard
A quick buck, or a quick death in a dying market?
Well said! IBM might not be the giants they once were but they're still pretty clued up. They sold off Thinkpad to Leveno and it's pretty clear now that the PC* market is dying.
The server market may well be about to choke it with cloud servers becoming so popular (AWS and whatnort). It doesn't seem sensible for a company of IBM's size to hold on to a market that is fast becoming a niece market.
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*I use "PC market" to mean "desktop/laptop market"... I hate it how Apple commandeered the term PC as if it somehow doesn't apply to Macs
its got more to do with ecosystem dependence and huge vested interests than fanaticism... you just can't compare an iphone with a mainframe
apple fans aren't as trapped into using apple products as some may think, whereas ibm customers pay millions of dollars to set up infrastructure with a lot of inertia that can't change course with each passing fad
The article should read the low end of the x86 business. IBM has already picked over the best parts of System X and moved them into PureSystems and has also started co-designing x86 server hardware with Hitachi for PureSystems. So they are going to be focusing on integrated server, networking, and storage plays instead of just plain standalone servers. Really trying to mimic the success EMC and NetApp have had partnering with Cisco and their UCS platform.
In all of the 'IBM shops' I've worked in, it's quite close to fanatacism. If it says 'IBM' on it, it will go through purchasing without question. Software or hardware from a competing vendor that is an industry standard, cheaper, with better performance and more features requires massive justifications. It may also be the 'old boys network' of sales people as well.
They don't have a major refresh every year, years with refreshes appear to have crazy year to year growth followed by a year of apparent sharp decrease. One 'bad' year is not unexpected if preceded or succeeded by a certain event on their roadmap.
XML is like violence. If it doesn't solve the problem, use more.
IBM sold them a division that builds commodity hardware. You know, the same shit you can get from, Dell, HP, Supermicro, ASUS, and so on. They just assemble tech bought form other companies. Now that isn't worthless, people buy a lot of servers, but it isn't something hard to figure out.
They didn't sell their processor division, which doesn't make i7s anyhow, that's Intel.
In terms of making their own i7, well ok, good luck. IP issues aside (they don't have an x86 or x64 license like AMD does) there's the whole thing that designing a processor is pretty hard. China decided they needed their own, home grown, processor, and by "home grown" they mean "used MIPS architecture because designing an architecture is hard." So they've thus far managed to produce a MIPS64 processor, that they don't fab (STMicro fabs it for them, they are European) that runs at 1GHz on a 65nm process.
That might be impressive (well minus the using other people's architecture thing, and the fab thing) except that Intel is making 4GHz processors on a 22nm process right now, and has a 14nm fab that is getting ready for pre-production in Arizona (will be up fully next year).
This idea you have that the US does nothing, particularly nothing high tech, is badly misguided. You might want to do a bit more research and find out all the things it does do. Processors would be a big one, being that not only is Intel a US company but most of its fabs are in the US but it is hardly the only one.
Not speaking to the business wisdom of IBM's move (IBM has been making bad decisions for awhile IMO) but stop acting like this is some super secret tech they sold. This is commodity manufacturing. For that matter it is commodity manufacturing that Lenovo already does some of. They make servers, just not many of them. This is an effort to grow their market quickly.
It really did refer to machine. When Watson named the company International Business Machines it manufactured all sorts of machines. Actual, real machines. Punch card tabulators, clocks, scales and cheese slicers. During WWII they even made rifles. At one time, machines were the heart of IBM.
That they sell to go with the servers? All three of those items are high margin and more than make up for the lack of margin on the servers themselves. How long is it going to take Lenovo to start selling enterprise storage or networking gear? They had better get some kind of agreement from lenovo that they won't sell gear in any of those categories for the next decade or two.
I can't really see people calling up lenovo and ordering a bunch of servers, and then calling up IBM and ordering storage. If nothing else they are going to call up netapp, EMC and Snoracle as well.
Maybe IBM doesn't care about the "low end" stuff people are connecting to their x86 servers. Sell a few less DS3500s milk the DS8k customers some more.
The problem is that "low end" x86 hardware is slowly but surely eating into what remains of the unix/midrange "server" market. Sure a couple customers here and there buy a mainframe and run zlinux on a couple IFL's they basically get for free after buying the mainframe. But in the end, can they support a business on such a tiny portion of the market? Even major mainframe customers like American Airlines have publicly stated they are moving away from the mainframe.
I suspect they will continue as they have for the last decade, selling pieces of the company, moving all the engineering to cheap labor countries, and charging their existing customers a heavy ransom for the privilege. But at this point in time IBM is beginning to look like Sun circa 2001.
I'm currently in China and can tell you that you are very diluded if you think of everyone here as a slave. They will be able to keep it up because life in here is very cheap. So when you see what you would consider a crappy wage in the west, it turns out that is a lot of money here. Plus the high school system is one of the best in the world, at least in Shanghai, and free nonetheless. So I think you might want to take a trip here and see for yourself what's going on.
Dude I am in Shanghai so drop the crap. The only reason for a license to cost that much is because of the auction and limited license plates. It is a measure of the city in its fight to reduce pollution, and much like New York, you don't need a car in Shanghai. Second of all, very rarely you see people in here buying Chinese cars. Most of the cars you see out there are Buicks and Volkswagen. It was funny to me that anybody was buying Buicks anymore. Again, kind of pointless in a city where you pay $2.30 for a cab ride in the inner ring.
Regarding food, you could not more wrong. I never cook at home since restaurants are so cheap. And I usually eat either at European or American restaurants, Hong Kong style chains like Bi Feng Tang or Japanese Teppanyakis. In those places you end up paying around 100 RMB for really good food. Now you can also go very cheap and eat noodles and the typical Chinese food for as low as 12 RMB. The quality of the food is good since this is not exactly industrialized food like milk powder or things like that that are usually the problem. Here the only overpriced stuff is imported goods. Like a box of Kellog's Smacks can go for 88 RMB in expensive stores like City Shop or Ole (think Dean and De Luca in the US), but if you go to Carrefour you can get Cheerios for 25 RMB.
And for school quality, I suggest you inform yourself better. Here is something for you http://m.theglobeandmail.com/news/world/shanghai-educational-triumphs-a-lesson-in-test-taking/article2234418/page1/?service=mobile
Oh and believe me, people in here care a lot about quality. I have seen very fancy 3 bedroom serviced apartments in the top commercial district for as low as 10,000 RMB.
And don't get me started with the nightlife, especially if you know a promoter. Just to name a few: M2, Muse, Hollywood, Feebe's, Perrys and Zapata's are all reasonably priced.
To be honest, I was just like you before I came here. After living here for a while I realize how screwed we are in certain areas. Having said that, they do have issues. To me, the worst one is the great firewall, but the Chinese in general do not care since people use their own services here anyway, like Youku, QQ, Weibo, Baidu, etc.
Well, I am in Shanghai and believe me, this feels like anything but socialism. The only indication of the political system I could see was with the great firewall thing and even that is easily bypassed with a vpn.
The cleaning ladies or ayis, as they are called here, are not only used by fat lazy foreigners but by a lot of Chinese too. Remember that not all Chinese are poor and there are quite a bit of people here driving Ferraris and Lamborghinis.
From what I have seen and talking with my Chinese friends, they work like that is just because they are taught like that more than anything else. Understand that for them, high school is hell, where you need to study like mad to get into a good university. University is relaxed for them, and when they finally get a job, it's a walk in the park. I'm attending a good university here and after getting my major in the US, I can tell you that it's not that their education system is better, but they demand a lot of the student. Tons of homework, research, you name it. And for them that is easy so go figure. So that's why when they end up working in the US they think that we complain too much since everything is really easy.
The other thing is that being here, you don't truly feel the high population like say, being in Times Square. It is spread out if you will, with good malls and services in every district. But jobs in here are the same as everywhere else, if anything there are a lot of opportunities right now because of the booming economy. For instance, if you are Chinese and know English very well it is almost guaranteed that you will get a job. If you know Spanish, German or some other European language your luck is kind of the same. As for foreigners, China is awesome, you get even better deals than the local Chinese.