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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...
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'.
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).
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
I asked some PMs from Intel who they thought the next big competition was and everyone thought Samsung had all the tech and talent to turn into a major adversary over the next couple years.
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.
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.