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IBM In Talks To Sell x86 Server Business To Lenovo

timothy posted about a year ago | from the biggish-blue dept.

IBM 202

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."

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MBA (1)

Mystakaphoros (2664209) | about a year ago | (#43499237)

Lower overall revenues for higher profit margins? Smells like an MBA.

Lenovo - a collector of IBM garbage (3)

Taco Cowboy (5327) | about a year ago | (#43499395)

When IBM decides to throw away its garbage, Lenovo will come begging

Re:Lenovo - a collector of IBM garbage (5, Insightful)

PolygamousRanchKid (1290638) | about a year ago | (#43499607)

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.

Re:Lenovo - a collector of IBM garbage (-1)

Anonymous Coward | about a year ago | (#43499667)

It's like the anal sex. Some people love a dick in their ass, some people don't know how much fun it is!

Re:Lenovo - a collector of IBM garbage (5, Insightful)

hairyfeet (841228) | about a year ago | (#43500047)

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 [youtube.com] 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.

Re:Lenovo - a collector of IBM garbage (2)

swalve (1980968) | about a year ago | (#43500285)

I'm sure IBM figures it isn't worth the effort. If they don't sell it off, they figure that Lenovo will start selling their own line of x86 servers, and then what? Who are they going to sell the business off to then? IBM isn't *that* stupid, they know there are other places where they can expend the same effort and make double digit profits.

Also, markets can't be distorted very much by speculators. (In anything but the very short term.) They can skim off the middle if they are really good, but there is only so much supply and demand for equities and commodities. If someone buys up more than they need to drive up the price, demand falls away and the price equalizes. When they sell off, the price drops. They might make some money off of the slack, but there are easier ways to make money.

Re:Lenovo - a collector of IBM garbage (1)

swalve (1980968) | about a year ago | (#43500247)

I agree. Why should IBM waste a bunch of money propping up a line of business that isn't really growing and is basically mature? Spend money, maybe make some of it back, still have to do something in another 5 years. Or, sell it to Lenovo and invest the cash in some new adventure of the future? Seems like an easy answer to me. Its much better than just letting it peter out and eventually having to mothball it. I like the idea of IBM as a sort of modern big time thinktank, making new ideas work and then unloading them to come up with other new ideas. And selling services!

Re:Lenovo - a collector of IBM garbage (0)

Anonymous Coward | about a year ago | (#43500309)

Except they aren't being much of a thinktank. They are playing shell games with their money and brand, slurping up profitable companies with some cash reserves, putting the wieght of their brand of it, sucking the husk dry, and then selling/discarding it when the margins get too thin.

Re:Lenovo - a collector of IBM garbage (4, Informative)

Spy Handler (822350) | about a year ago | (#43499651)

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.

Re:Lenovo - a collector of IBM garbage (5, Interesting)

rayzat (733303) | about a year ago | (#43499687)

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.

Re:Lenovo - a collector of IBM garbage (1)

Anonymous Coward | about a year ago | (#43499749)

Agreed. The original sale to Lenovo went surprisingly well. As a long-term customer we have been very pleased at the outcome of this transaction.

Hopefully the x86 server sale will follow the same pattern.

Re:MBA (-1)

Anonymous Coward | about a year ago | (#43499471)

Ignorant thinking from a tool with no social skills? Smells like a code monkey.

http://www.linuxadvocates.com/p/support.html (-1)

Anonymous Coward | about a year ago | (#43499255)

Dear Linux Advocate,

Money doesn't grow on trees. And, Linux Advocates is growing. Naturally, we anticipate operating costs and hope to be able to meet them.

But, any amount you feel you are able to donate in support of our ongoing work will be most surely appreciated and put to very good use. Your contributions keep Linux Advocates growing.

Show your support by making a donation today.

Thank you.

Dieter T. Schmitz
Linux Advocates, Owner

http://www.linuxadvocates.com/p/support.html [linuxadvocates.com]

Re:http://www.linuxadvocates.com/p/support.html (-1)

Anonymous Coward | about a year ago | (#43499265)

where da mods at???

scam? (-1)

Anonymous Coward | about a year ago | (#43499335)

Registered through: GoDaddy.com, LLC (http://www.godaddy.com)
Domain Name: LINUXADVOCATES.COM
Created on: 24-Jan-13
Expires on: 24-Jan-14
Last Updated on: 24-Jan-13

Registrant:
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Re:scam? (0)

SJHillman (1966756) | about a year ago | (#43499403)

I'll be back in Herkimer in two weeks, I'll be sure to stop by.

Summary should probably also mention... (4, Informative)

Type44Q (1233630) | about a year ago | (#43499267)

The summary should probably also mention that IBM sold off their entire storage division to Hitachi...

Re:Summary should probably also mention... (1)

Mystakaphoros (2664209) | about a year ago | (#43499295)

They're focusing on teleportation now, I hope?

Re:Summary should probably also mention... (1)

Anonymous Coward | about a year ago | (#43499311)

The summary should probably also mention that IBM sold off their entire storage division to Hitachi...

And their printer division to Lexmark.

Re:Summary should probably also mention... (2)

NighthawkFoo (16928) | about a year ago | (#43499921)

And the Retail Store Solutions to Toshiba.

Re: Summary should probably also mention... (2, Funny)

Anonymous Coward | about a year ago | (#43500009)

And my axe!

Re:Summary should probably also mention... (4, Informative)

PolygamousRanchKid (1290638) | about a year ago | (#43499463)

. . . and Networking Hardware Division to Cisco . . . and Federal Systems Division to Loral . . .

Some companies start as small operations in people's garages.

IBM holds garage sales.

Although, it should be noted that they buy a lot of software businesses . . . like Lotus . . . Tivoli . . . Rational . . .

Re:Summary should probably also mention... (1)

Anonymous Coward | about a year ago | (#43499573)

And their UniVerse non-relational database business sold to Rocket Software...

Re:Summary should probably also mention... (1)

crutchy (1949900) | about a year ago | (#43499599)

at least hitachi will make something of it... lenovo will just fuck everything up

Re:Summary should probably also mention... (1)

citizenr (871508) | about a year ago | (#43500005)

at least hitachi will make something of it... lenovo will just fuck everything up

Hitachi got taken over by Western Digital

Re:Summary should probably also mention... (1)

crutchy (1949900) | about a year ago | (#43500187)

western digital is a key brand in hard disks

if you can't beat them, join them

from http://en.wikipedia.org/wiki/HGST#History [wikipedia.org] hitachi sold off their global storage business to western digital, but from that deal hitachi now owns a 10% share of western digital

hitachi as a multinational conglomerate is still hitachi though... hitachi city in japan hasn't changed its name to western digital city :)

Re:Summary should probably also mention... (2)

Junta (36770) | about a year ago | (#43499695)

Huh? When did this happen? Or do you mean the hard drive business, which is very much not the same as their Shark stuff (and of course the Ramsan, the SVC, and XIV stuff they bought and the various netapp things they rebadge)

Re:Summary should probably also mention... (1)

Type44Q (1233630) | about a year ago | (#43500391)

Huh? When did this happen?

After the "Deathstar" fiasco, when IBM realized they'd fucked-up so terribly badly that no informed consumer in their right mind would ever take their hard drives seriously again...

Re:Summary should probably also mention... (1)

rayzat (733303) | about a year ago | (#43499745)

IBM sold their hard drive division to Hitachi, storage is still in STG Lexmark was essentially a spin-off of the consumer printer group Ricoh purchased IBM's enterprise printer business Lenovo purchased IBM's PC group Network Hardware Group was sold to Cisco, NHD was drunk on token ring, although IBM is back into networking by purchasing BNT. Point of Sales systems was sold to Fujitsu IBM sold their low end PowerPC business to Applied Micro. Lenovo's also been OEMing low end IBM servers for years and if I understand it correctly selling them for a lower price at higher margin.

Margins (2)

Nerdfest (867930) | about a year ago | (#43499269)

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.

Re:Margins (0)

Anonymous Coward | about a year ago | (#43499613)

If I remember correctly, less than 15% of their revenue comes from hardware anyway. They're a big ass consulting / global strategy company now.

1. Chuck Hardware, 2. BS, 3. Profit (1)

Tablizer (95088) | about a year ago | (#43499729)

US's comparative advantage is bull$hiting, not cranking out cheap commodity widgets, and there is more room for bull$hitting in services. ...until China realizes there is a bull$hitting gap, catches up, and sticks Vietnam or S. Africa with the hardware grind.

Re:Margins (0)

Anonymous Coward | about a year ago | (#43500073)

2010 annual report the plurality of revenue was Software Group, but the majority of the profit was Software Group.
And if you went drilling down deeper you'd see that the most profitable software was the crap that didn't actually work.

I'm sure it hasn't improved since.

Re:Margins (2)

crutchy (1949900) | about a year ago | (#43499621)

companies like Samsung will wipe the data center market clean with new SOC blades in a few years... IBM know the writing is on the wall and they won't be able to compete

Re:Margins (3, Interesting)

rayzat (733303) | about a year ago | (#43499769)

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.

Makes sense... (0)

Anonymous Coward | about a year ago | (#43499281)

...sell off the one division that does something useful, leaving you with a company that sells useless, bloated "services" that no-one really needs. I know this, I worked for those services. Worst fucking three years of my life, they totally wasted my skill set. At least I was able to extract a lot of money from them, though.

Re:Makes sense... (1)

ickleberry (864871) | about a year ago | (#43499331)

Thats it. People in the "west" doing nothing of value or interest while thinking highly of themselves while all the real work and all the production has moved to China years ago.

Re:Makes sense... (1)

crutchy (1949900) | about a year ago | (#43499709)

the majority of first world economies is driven by the services sector... because first world consumers are fat and lazy and will quite happily pay for the convenience of having someone else do something for them, especially those who pay with government welfare (apparently over a third of americans rely on some form of government benefits)

i guess "useful" depends on your perspective though

IBM should just drop the M (1)

hrvatska (790627) | about a year ago | (#43499289)

They've still got System Z mainframe line, and I can't see them selling that business unit off, but they ought to just drop the M and call themselves 'International Business'.

Re:IBM should just drop the M (1)

Nerdfest (867930) | about a year ago | (#43499371)

That line of business has a list of customers that make Apple fans look rational. They'll buy anything with IBM on it that the salesmen show them. They're set until the last of them retire or die off.

Re:IBM should just drop the M (2)

crutchy (1949900) | about a year ago | (#43499755)

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

Re:IBM should just drop the M (2)

Nerdfest (867930) | about a year ago | (#43499879)

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.

Re:IBM should just drop the M (1)

crutchy (1949900) | about a year ago | (#43500129)

there are a few mainframe vendors out there, but when you're spending that much money surely trust has a role to play and ibm has built a brand over decades in mainframe development and support

it's kinda the same reason why businesses go with microsoft... just as nobody ever got fired for buying microsoft products, nobody is going to be fired for spending a truckload of money on ibm mainframes

not saying that there isn't any fanaticism at all, but i wouldn't go so far as to conflate apple fanbois with trust in ibm... it is a brand trust for sure, but it's trust that the company won't leave you holding the bag, not that you will be the most popular kid in your class

Re:IBM should just drop the M (1)

rayzat (733303) | about a year ago | (#43499799)

The problem is Mainframe performance is growing faster then demand for MIPS, so most customers or consolidating more and more Mainframes with every release. Once they get to one and have room to spare the upgrade slow to a halt.

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43499875)

In 4Q of last year IBM shipped more mainframe MIPS than ever before. More importantly, over HALF of those MIPS were in the form of 'new workload' specialty engines. That means those MIPS are being used to run Linux or Java. There is consolidation going on, but much of that consolidation is OFF of x86 servers and ONTO the mainframe.

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43500217)

My question is, how many of those mips are actually enabled? Basically every mainframe person I've spoken to in the last couple of years is running just a tiny percentage of the machine capacity unless they have zlinux. Or they are buying z114 at 26 mips and just letting them sit idle unless there is a DR situation where they call IBM and give them a load of cash to unlock the machine.

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43500547)

IBM sells machine capacity, not capability. The 'capacity' is basically the MIPS, the capability is the number of physical processors running at max speed.

When IBM talks about 'MIPS shipped' they mean just that - what capacity they have sold. Therefore, every one of those MIPS is 'enabled'. If a customer wants to increase the number of MIPS that counts as another sale, even though no hardware may be involved.

You must know very few mainframe people (if any), because most mainframes are high capacity (enabled MIPS) machines, and customers are using every bit of that capacity.

Re:IBM should just drop the M (1)

crutchy (1949900) | about a year ago | (#43500319)

makes me wonder whether linux is helping that consolidation

how difficult is it to migrate x86-64 linux software to linux on system z? just having a quick browse of wikipedia without having ever used system z or understanding z/architecture it seems like it might even be possible to run software without having to recompile?

i can see how multi-threaded transaction applications would have a huge performance advantage on mainframes with 100+ 4GHz+ processors... that is some serious computing grunt

Re:IBM should just drop the M (1)

mabhatter654 (561290) | about a year ago | (#43499861)

In the high end server market IBM is the last of the old-school giants. They have support that will pull parts out of their test machines and hand drive them to you if those big iron boxes break. Of course on big iron "break" means a board is dead.., the machine itself is usually still running, just slower. If you find a real software bug, you can end up with the programmer (or the guy who SITS next to him) for that code looking at your machine himself. You are THAT higher up on the food chain than you eould ever see from WinTel.

It takes Apple-sized margin to deliver that kind of service. Not many are willing to pay for it. You also compensate with really small IT departments. My IT department had about 3 admins and a few managers, mostly for self-written app support. You have departments wher 30 year-olds are the NEW kids and hard to find. It's totally the opposite of the "throw everybody at everything" world if Googles and Facebooks.... We rarely work weekends.. Or at least not because of the "system".

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43499947)

The problem being that IBM has run their x86 business more inspired by Dell and HP than their own mainframe and POWER sensibilities. Respectable, but not godlike support. Instead of the solid management strategies they have provided in mainframe and POWER, they want to push their crappy Director software down your throat which pretty much demands you throw more people at the problem (they thankfully have more industry standard instrumentation so you can manage them like commodity servers, but at that price why in the world are the free alternatives better?)

Re:IBM should just drop the M (1)

crutchy (1949900) | about a year ago | (#43500457)

push their crappy Director software down your throat

not trying to defend big blue here but just playing devils advocate; apart from the obvious profit motive, i wonder if IBM perceives the use of their own management software on their hardware platforms as being part of a QC/QA strategy

to use a car analogy... it might be like an engine manufacturer requiring the use of particular software in the engine management computer because freely allowing 3rd party software would introduce risks not only to increased warranty claims from buggy software that they have no control over or threat to the overall brand's image of reliability and performance... i know staff who manage expensive mainframes probably don't fuck around as much as car enthusiasts but it might be possible

Re:IBM should just drop the M (4, Informative)

ebno-10db (1459097) | about a year ago | (#43499397)

but they ought to just drop the M and call themselves 'International Business'.

Correction: 'India Business'.

Re: IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43500245)

India Business Management

Re:IBM should just drop the M (3, Informative)

Guy Harris (3803) | about a year ago | (#43499465)

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 [ibm.com] (Power Architecture boxes running IBM i, AIX, and Linux).

Re:IBM should just drop the M (1)

hrvatska (790627) | about a year ago | (#43499805)

Revenue from power systems was down 32% compared to a year earlier. If they don't improve soon they'll get sold just like System X.

System P is much more volatile year to year.. (2)

Junta (36770) | about a year ago | (#43500051)

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.

Re:System P is much more volatile year to year.. (1)

crutchy (1949900) | about a year ago | (#43500475)

agreed... mainframes likely have a different business cycle to most other areas, probably more akin to film studios like pixar maybe?

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43499823)

Power is a really fun platform to work on!

Re:IBM should just drop the M (1)

Prof.Phreak (584152) | about a year ago | (#43500431)

I don't think Machine ever refered to ``machine'' as in computer or mechanical thing... it refered to IBM itself being a business machine.

Re:IBM should just drop the M (0)

Anonymous Coward | about a year ago | (#43500463)

And the 'i' -- don't forget the iSeries... (formerly AS/400).

A quick buck from the Chinese (4, Interesting)

ickleberry (864871) | about a year ago | (#43499321)

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.

Re:A quick buck from the Chinese (1, Informative)

UltraZelda64 (2309504) | about a year ago | (#43499405)

I would mod you up if I could. Well said. And people wonder why the economy here is so fucked up and jobs are so god damn hard to come by. They all went to fucking China.

Re:A quick buck from the Chinese (1)

Anonymous Coward | about a year ago | (#43499623)

Lima Declaration of 1975

Re:A quick buck from the Chinese (1, Insightful)

Tablizer (95088) | about a year ago | (#43499677)

We should tariff lopsided trading countries like non-plutocracies do. The "Adam Smith" models that suggest even lopsided trade is "good" only focus on general averages and ignore stability (bank/currency bubbles) and unequal distribution (richer rich & gutted middle).

A quick death from a dying market. (0)

Anonymous Coward | about a year ago | (#43499445)

A quick buck, or a quick death in a dying market?

Re:A quick death from a dying market. (3, Informative)

telchine (719345) | about a year ago | (#43499593)

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.

--
*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

Re:A quick death from a dying market. (1)

mikael (484) | about a year ago | (#43499771)

When home built gaming rig range from $600 systems to $4000 6-core Intel i7 with up to three GPU boards in SLI/Crossfire configurations, corporate customers are looking at cloud computing services to centralize heavy computing power and protect proprietary algorithms, is there any future for low-end corporate PC's?

Re:A quick buck from the Chinese (-1, Flamebait)

deepestblue (206649) | about a year ago | (#43499453)

Racist much? IBM is not somehow a triumph of Western civilisation, whatever that is. IBM is a triumph of 20th century America, a melting-pot of people from all over the world.

Re:A quick buck from the Chinese (1)

Anonymous Coward | about a year ago | (#43499751)

Racist much?

Oh fuck you, you self-righteous asshole. He was referring to China as a national entity, not as a race.

Does it physically hurt being as stupid as you are?

You sir are a genius (2)

ArchieBunker (132337) | about a year ago | (#43499475)

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.

Re:You sir are a genius (1)

crutchy (1949900) | about a year ago | (#43499779)

thousands of attorneys and accountants

they're all paid for by Chinese interests... and every good lawyer and accountant knows the first rule of business is "don't bite the hand that feeds you"

Re:A quick buck from the Chinese (2)

Kjella (173770) | about a year ago | (#43499743)

If they should sell out to China I don't know, but IBM should have gotten out of commodity hardware sometime around the PS/2 flop in the late 80s. They got out of the desktop business after their ass was handed to them by cheap clones. They ditched the storage unit after the infamous IBM "Deathstars". So they created the original IBM PC, the Model M keyboard and I guess the PS/2 port is the lone survivor of that line but who is really going to miss their IBM hardware? Yeah ThinkPad was built like a tank and made to last twice as long at thrice the price but their performance/$ has been more than questionable for a very long time. IBM just isn't the right kind of company to be in that business.

Re:A quick buck from the Chinese (1)

crutchy (1949900) | about a year ago | (#43500521)

who is really going to miss their IBM hardware?

if i had the money i would prefer ibm over dell anyday

the problem is that money talks... over everything else

Re:A quick buck from the Chinese (0)

Anonymous Coward | about a year ago | (#43499863)

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

You guys are the ones who have been shelling out big bucks for Chinese made gadgets and then loading them with ripoffs of the IP created by American musicians, software developers, filmmakers and writers. You've spent the last ten years parroting that Tech Dirt blogger's babble that everything that Americans are good at (relative to the rest of the world) should be available for everyone for free, as in beer, which implicitly leaves China's industries as main beneficiaries of what's left of our consumer dollars. Why do you think that 8 percent growth is considered a "recession" over there?

Whenever anyone points here that these priorities are backward, they get modded down. Flamebait, trolls.

Re:A quick buck from the Chinese (1)

crutchy (1949900) | about a year ago | (#43500489)

uncle sam has already sold the country to china... ibm is merely going with the flow

A question for you (0)

Anonymous Coward | about a year ago | (#43499353)

Who here is still using the x86 in their server farms? I'm interested in hearing why.

Re:A question for you (1)

Dadoo (899435) | about a year ago | (#43499691)

Who here is still using the x86 in their server farms?

What do you mean, "still"? I imagine most people are using them. Why? Because they're cheap and, most importantly, standardized.

I'll admit, I'm a big fax of Unix, but we decommissioned our last pSeries server a couple of years ago. The last straw was when we tried to add some additional disk space to the machine. Our distributor wanted about $25,000. After a little research, I discovered we could get a whole new x86 server with twice the disk space for less than $18,000. I'm pretty sure it was more powerful than the pSeries system. too. For the price of an IBM pSeries or iSeries machine, you can get a couple of x86 machines and use the second one for a backup.

Also, when you're dealing with IBM, you're locked into IBM. I suppose I'm not surprised that you can't just drop any old PCI card into an IBM system and expect it to work, but very few non-IBM SCSI peripherals worked with the system, either.

I hated to give up on IBM, but they're just too difficult to work with, any more.

Re:A question for you (1)

crutchy (1949900) | about a year ago | (#43499787)

one word... cheap

Re:A question for you (1)

hawguy (1600213) | about a year ago | (#43499893)

Who here is still using the x86 in their server farms? I'm interested in hearing why.

Because Windows only runs on x86, and once I've built up my VMWare or HyperV infrastructure to run the Windows side, why use a completely different processor architecture for the non-windows servers?

Thinkpads (0)

Anonymous Coward | about a year ago | (#43499359)

Yeah, because this worked out so well for the Thinkpad.

From geek laptop of choice, to cheapl plastic Chinese crap.

Get out while you still can (2, Insightful)

FuzzNugget (2840687) | about a year ago | (#43499437)

If how Lenovo shat all over the ThinkPad line is any indication, you'll be sorry if you don't abandon ship now.

Re:Get out while you still can (0)

Anonymous Coward | about a year ago | (#43499713)

It took a couple of years before Lenovo really fucked up the Thinkpads, so at least people have time to switch over to HP.

Re:Get out while you still can (0)

Tablizer (95088) | about a year ago | (#43499741)

StinkPad

Re:Get out while you still can (2)

msobkow (48369) | about a year ago | (#43499813)

I don't know what they might have done to their ThinkPad line, but the IdeaPad I bought from Lenovo a few months back has proven to be rock solid, reliable, and fast. It runs on batteries longer than I need, and it has more bells and whistles than I want or need.

Methinks people are just yearning for glory days that weren't as great as they remember in the first place, much like any other reminiscing people tend to do.

Re:Get out while you still can (1)

FuzzNugget (2840687) | about a year ago | (#43500109)

Yeah, who wants good build quality and keyboards that you can actually use for typing?

Re:Get out while you still can (1)

msobkow (48369) | about a year ago | (#43500199)

No parts have failed. Everything works. The keyboard is just fine. This crap about "good build quality" is just that -- crap.

No, it doesn't have a brushed aluminum or forged titanium case. It doesn't have that little rubber nub instead of a trackpad (which I wish it did.)

But there is nothing wrong with the "build quality" of the machine I bought. It's cheap. It has a plastic case. But I'm not planning to sit on it or drop it, so good enough.

Re:Get out while you still can (1)

FuzzNugget (2840687) | about a year ago | (#43500495)

Anyone who believes ThinkPads are built well today never used one designed by IBM.

Re:Get out while you still can (0)

Anonymous Coward | about a year ago | (#43500115)

Um... no. The original ThinkPads were rock solid, and many of the people complaining are still using 5, 7+ year-old ThinkPads and are pissed they have nowhere to go for a new laptop. Everything else sucks by comparison.

ThinkPads were tanks, but not bulky. You can't find anything like them anymore after Lenovo cheaped them out. New ThinkPads are just shells of their former glory.

I say this as someone who has used various Apple laptops for almost 10 years.

Money for lobbying (0)

Anonymous Coward | about a year ago | (#43499455)

They need money for shit like this:

felt strongly enough to send 200 executives to Capitol Hill to convince lawmakers to back the cybersecurity bill.

http://www.ibtimes.com/cispa-2013-passes-house-why-ibm-champions-controversial-cybersecurity-bill-despite-obamas-veto

Are they just an offshorer now? (1)

rsilvergun (571051) | about a year ago | (#43499523)

last I heard anyone doing real (read: not sales) work was being outsourced to whatever country was cheapest at the time. Why would I bother hiring IBM to do that when I can do it myself?

Re:Are they just an offshorer now? (1)

ebno-10db (1459097) | about a year ago | (#43499817)

Why would I bother hiring IBM to do that when I can do it myself?

I think more (former) IBM customers are starting to figure that out. Here's an interesting story about IBM losing the contracts for Hilton Hotels and ServiceMaster due to bad service [cringely.com] . The ServiceMaster one is particularly interesting. Despite the incredible shortage of good IT people, which necessitates tripling the H-1B quota, they had a job fair one Saturday and were able to hire everybody they needed for their new in-house IT operation. I'd bet they saved money on it too. So the offshoring that IBM does is basically a way of taking money out of the pockets of productive Americans and funneling it to their execs and shareholders. It does not save money, and it certainly doesn't get anything done better.

I hope this trend of seeing that the emperor has no clothes continues. For decades the conventional wisdom was that IBM wasn't cheap, but you always got quality and reliable service. Now the three letters mean nothing.

Re:Are they just an offshorer now? (0)

Anonymous Coward | about a year ago | (#43500297)

Yah, IBM service.... Hahaha. There was a time where a customer with a problem knew the IBM CE could fix it. Now the CEs are little more than handholders reading the manuals and sending emails to indian or chineese engineers that take 24 hour to be turned around.

Their push to offshore the engineering has affected quality too. Its pretty shocking how bad the quality is on many of there products. I have a z114, and I would rather try to run an IT shop with windowsME. At least you knew rebooting would solve your problem. Now, its more like the CE comes out and tries all the same crap you tried, then uses some secret CE mode password to act as a keyboard monkey for an engineer somewhere. Just about the only skill a CE brings is the ability to understand some foreign accent so thick that most of the conversation has to take place on I'M.

MSS & ISS (0)

Anonymous Coward | about a year ago | (#43499533)

I just hope they are not going to be relying on ISS and their managed services..

Re:MSS & ISS (1)

crutchy (1949900) | about a year ago | (#43499803)

ISS

i'm assuming you're not referring to one particularly large piece of orbiting space junk

Should read the low-end of the x86 business (2)

rayzat (733303) | about a year ago | (#43499855)

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.

Re:Should read the low-end of the x86 business (0)

Anonymous Coward | about a year ago | (#43499999)

Flex isn't so bad, but it seems to buy a 'Pure' system, you must buy into a much much more expensive scheme with a useless management appliance. In general, IBM is slapping switch, storage, and servers physically into the same chassis and they kind of coexist but by no means are they seamlessly managed. They seem to hope they can 'integrate' as an afterthought in a subpar management appliance. The components are nice and all and if you know how to use them, they will outperform competing offerings, but IBM has to learn a *lot* about the sensibilities of management.

The other challenge is that the market for things like UCS, like Flex, and like other high-value, but high-cost is pretty much slated to diminish to near nothing in the face of software architectures that aren't as adversely afflicted by hardware shortcomings as was historically the case, Sure, they can carve out a niche in high-end enterprise computing, but they really need *some* competent low-cost strategy if they, for example, have ambitions of creating their own hosting service that might be considered to be remotely in the same pricing ballpark as EC2.

So International Business Machines... (1)

scottbomb (1290580) | about a year ago | (#43499881)

...will no longer sell any business machines. Interesting.

Re:So International Business Machines... (1)

Guy Harris (3803) | about a year ago | (#43500019)

...will no longer sell any business machines. Interesting.

Someday that might be true, but, for now, they're selling these [ibm.com] and these [ibm.com] business machines.

Need more details.. (0)

Anonymous Coward | about a year ago | (#43499913)

Basically, this could be tolerable to very bad for the rest of IBM. For the x86 business being ejected, it's probably overall the best hope it has.

A good chunk of the candidates to buy IBM equipment consider IBM a competitor on *some* front. Many doors to sales are closed simply because companies do not wish the fund their competitor in any way whatsoever. x86 seller might want to partner with software vendors to have a nice reference platform, but those options are limited by the same reality.

On the flipside, you might think at least their x86 gets a boost from being the platform of choice for IBM service and software. The thing is, when other groups *do* bundle or otherwise bolster number of IBM x86 servers, it's pretty much always under the scenario of the servers being sold at cost to let the other more favored divisions take the credit, exacerbating the perception of the x86 business as a 0 margin endeavor (in part a self-fulfilling prophecy). If an independent company, they no longer have a common leadership forcing the stepchild to take the beating for the favored child to experience heightened success.

So for the x86 business hypothetically on the way out, they have a bit more free reign and perhaps a leadership that can do things with more efficiency and perhaps accept a profitable business as a success rather than leadership that wants to chase high margin opportunistic that are not sustainable with a goal to always throw it away in short order (basically pumping the fortune and reputation acquired through a century of legitimate effort into get-rich-quick schemes until the well runs dry)..

Now for the rest of IBM, this might be neutral or it could be fairly bad. Internally the speculation is that they retain only the Flex system stuff and jettison the rest. I'd call this the worst case scenario for IBM endeavors like pre-loaded software appliances and service. Groups are under pressure to use IBM hardware first, and if they are forced to cram their offerings into Flex, they will frequently be settling for a poor fit. Any architecture like that one makes compromises (notably, storage density for scenarios like Hadoop cannot be well served by Flex). For other workloads, Flex offers value at higher cost, but sometimes that extra value is simply irrelevant to a usage scenario. This means that the hosting provider ambitions get crippled because they are forced to use Flex at higher cost despite not offering substantive value relevant to the needs. I'm a fan of Flex and in some places the value is highly relevant, but the pricing makes it a challenge for a lot of places that have moved on from premium priced x86 offerings to lower end scenraios where quality servers are still appreciated, but some of the more stringent resiliency requirements are met by software architecture eliminating the need for particularly resilient hardware designs..

Now if IBM keeps both their Flex line and their weird, low-cost 'high density' lines, then maybe it's ok. However, I don't see how just bladecenter, rack and tower servers would present 6 billion of value to anyone, so I must presume that nothing more than Flex might be withheld. IBM might also be ok if they rebadge/resell the hardware developed by the external party, but I don't see them having such will (their sales force already avoids talking about certain *IBM* products that might work out of fear that they don't get commission as it might migrate to another sales teams turf).

In the long term, the leadership in IBM seems hell bent on the '2015 roadmap', even though the only path there basically means scrapping most of the business for parts and not having much to work with come 2016, leeching the life out of the company as they go. From what I've seen, the 'leaders' willing to put the most outlandish stuff in a powerpoint to executives wins, regardless of how much it relates to reality. One group with real positive results loses to another that actually loses money because the first group presents a sustainable, realistic view of where things are going and the latter presents that while they haven't yet demonstrated results, they project crazy good growth in the next years without a particular credible explanation as to how that comes to be, but they say it with such *conviction* that the execs eat it up.

It's a fine line there anyways (1)

damn_registrars (1103043) | about a year ago | (#43500255)

Being as the intellistations and some intelliservers were already done by lenovo, the deal won't be noticed by many.
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