Slashdot Mirror
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.
but they ought to just drop the M and call themselves 'International Business'.
Correction: 'India Business'.
Actually, think of it a being "Business Recycling." IBM is selling it, because it can no longer run it as a successful business. Lenovo is buying it because they believe they can.
When large trash day comes around here at the ranch, there are always folks picking up stuff that I no longer need, but they think that they can do something useful with.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
IBM PCs were hardly garbage when IBM sold it. The ThinkPad line was highly regarded and the business as a whole was doing ok. The profits were low and declining but that was due to the cutthroat competition and commoditization of PCs rather than anything majorly wrong with IBMs.
Looks like Lenovo has done well since buying the Thinkpad line. They're the only PC maker with a pulse right now.
One man's trash is another man's treasure. Selling off PC group was a huge win for both companies. IBM shed a low margin business, margins that were so low investing the money the put into PC group into t-bills would have yielded more profit. Lenovo had a leaner operating structure and different business options being a Chinese company that would let them run higher margin and they've made more then enough profit to pay off the acquisition several times over. IBM also got a nice revenue stream from licensing IP to Lenovo as well as the services for running Lenovo's first line support as well as coordinating their break fix.
And considering the figures on Levovo last I saw them they are on to something as they seem to be able to do just fine with the lower profit margins that IBM scoffs at.
Of course i believe this is part of a larger disease that is infecting the west and is really gonna bite us in the ass, I call it "iMoney or bust". What happens is a company will just throw away a successful business because it isn't making double digit profits like iToy and end up hurting the company in the long run. the best example of this right now is MSFT, as PCs are still selling hundreds of millions a year (or at least they were before Win 8 came out) and making billions but because they aren't making iMoney on them MSFT will happily burn that entire business rather than accept low margin high sales business is still good business.
This is one thing I have to give the Asian companies a LOT of credit for, they realize that consistent single digit profits? Is still fucking PROFITS and are more than happy to gobble up businesses where they can make a solid 4%-10% profit whereas thanks to the stock market being badly distorted by speculators here in the west a company that makes profits but not iMoney is punished by falling stock prices. This is why Dell wants to take it private, if you look at their stats they are actually back to making what they were before the 07 downturn yet because that ain't iMoney their stock still sucks.
You watch Lenovo will buy it, make solid single digit profits with it quarter after quarter and use that money to better their business. that is fucking smart but sadly being smart in business is punished here in the west, either you make iMoney or you watch the stock burn. Ironic as even Apple isn't able to keep making iMoney, hence why they are still selling previous versions and came out with a cheaper 7 inch.
ACs don't waste your time replying, your posts are never seen by me.