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Lenovo To Buy IBM's Server Business For $2.3 Billion

timothy posted about a year ago | from the bet-watson-had-this-sewn-up-weeks-ago dept.

Businesses 160

itwbennett writes "Well, that was fast. Earlier this week the rumor mill was getting revved up about a potential sale of IBM's x86 server business, with Lenovo, Dell, and Fujitsu reportedly all interested in scooping it up. On Thursday, Lenovo Group announced it has agreed to buy IBM's x86 server hardware business and related maintenance services for $2.3 billion. The deal encompasses IBM's System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances." SlashBI has some words from an analyst about why Lenovo wants the x86 product line more than IBM does.

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Thinkpad line (1)

Anonymous Coward | about a year ago | (#46045253)

They must have loved their Thinkpad line of laptops so much that they just HAD to have more!

CAPCHA: Reinvent

Re:Thinkpad line (5, Insightful)

dintech (998802) | about a year ago | (#46045595)

A public consumer buying a laptop is one thing, but I can imagine certain blue chip institutions (banks for example) will be slightly less interested in buying servers from Lenovo as opposed to HP. I have some IBM servers on order right now and there isn't usually a lot in it when deciding whether HP or IBM is better for my use case. If it was Lenovo or HP, that decision would probably only go HPs way.

Branding / Covering Your Job (2)

Etherwalk (681268) | about a year ago | (#46045703)

A public consumer buying a laptop is one thing, but I can imagine certain blue chip institutions (banks for example) will be slightly less interested in buying servers from Lenovo as opposed to HP. I have some IBM servers on order right now and there isn't usually a lot in it when deciding whether HP or IBM is better for my use case. If it was Lenovo or HP, that decision would probably only go HPs way.

This was definitely my first thought--a lot of value is in the IBM mark. If Lenovo can't brand the hardware and services and IBM, they're going to lose a lot of business relative to the value of the sold hardware and related services business prior to purchase. I would think a bunch of people would continue to use them for legacy equipment or when they want new hardware to function especially smoothly with legacy equipment, but for a lot of institutional clients, I think you just wouldn't consider Lenovo.

I would think that when you're purchasing a solution to a tech issue for a major institution, you're looking for three things: (1) that the solution will work, (2) that the solution is something you can justify spending money on to your bosses, and (3) that the solution is something that will cover your ass at least somewhat if it fails (i.e. you can point to a major brand name the CEO will know and they are more likely to believe that it should have worked, but if you point to a brand without a reputation or that they feel at all sketchy about they will blame you for picking it).

Of course, YMMV

Re:Branding / Covering Your Job (0)

cayenne8 (626475) | about a year ago | (#46045971)

I have worked with IBM thinkpads...and a year or so ago, I got a Lenovo "thinkpad" for a job, and I was highly disappointed in it.

More plastic-y and fragile than the old line thinkpads. I found the usb slots to be cheap and noisy, as that I was trying to do some USB to serial communications, and it was not pretty at times.

I'd guess the servers will likewise degenerate into cheaper states.

Re:Branding / Covering Your Job (2)

SpzToid (869795) | about a year ago | (#46046597)

Say it ain't so. I have had my eyes on a top o' line Lenovo W540 notebook because it specs very well, is Ubuntu Certified, and HP's alternative was rated as 'noisy' in the few reviews available for me to read so far.

That notebook stuck out for those reasons, while I found no other alternatives; mainly because linux support is such a crap-shoot.

http://blog.laptopmag.com/leno... [laptopmag.com]

Re:Branding / Covering Your Job (0)

Anonymous Coward | about a year ago | (#46046817)

The "plasticy" materials are partly due to changing the case materials around 2008 to accommodate arrays of wireless-N antennas. While I noticed that my T420s is much more plasticly than previous Thinkpads, I haven't experienced any actual reduction in durability.

Re:Branding / Covering Your Job (1)

default luser (529332) | about a year ago | (#46046951)

I believe you two are talking about different sorts of noise.

I believe GP was referring to SIGNAL noise on the USB line playing havoc with his RS-232 adapter. It does not mean that the laptop FAN is loud. It's also not certain that you would have issues with normal USB devices, give what a corner case RS-232 adapters are.

Re:Branding / Covering Your Job (1)

SpzToid (869795) | about a year ago | (#46047157)

Sorry, but I should made my concern for fan noise more clear in my text. The HP & Dell reviews I've read for workstation-type notebooks said they suffered from fan noise which seems like a poor design implementation.

The last notebook I bought was an HP Prosumer piece of junk, and the fan noise was terrible and impossible for me to overlook. I sold the notebook at a loss because it wasn't useful to me at all and would only become less valuable as time passed. If I pay $2000 for a W540 I want it quiet and Ubuntu Certified, along with all the published specs to be true.

My concern in my original comment simply had to do with quality. I just want to buy a quality notebook to spec which is silent to my ears, and easy on the eyes.

Re:Branding / Covering Your Job (1)

chmod a+x mojo (965286) | about a year ago | (#46046667)

Yeah, I bought a "thinkpad" type laptop about 6 months ago. Decent-ish specs, but absolute shit keyboard. I had to put a large spacer between the mainboard and the keyboard tray base just to get the spacebar to work consistently. I hate that almost everybody is going with the shitty chicklet keyboards nowadays, it feels like you need to either be an elephant or hit the damn keys with a big hammer when typing.

Other than the shitty keyboard ( one thing I DO like is the full numpad for number entry), I can't complain about the hardware for the price I paid, it was cheap enough to toss 16gigs of ram in to make the i5 hum along for most things.

Re:Branding / Covering Your Job (2)

Third Position (1725934) | about a year ago | (#46047435)

This was definitely my first thought--a lot of value is in the IBM mark. If Lenovo can't brand the hardware and services and IBM, they're going to lose a lot of business relative to the value of the sold hardware and related services business prior to purchase. I would think a bunch of people would continue to use them for legacy equipment or when they want new hardware to function especially smoothly with legacy equipment, but for a lot of institutional clients, I think you just wouldn't consider Lenovo.

That may be true for American companies, but consider Chinese companies, who have no small concern about the US's spying activities. It's a lot more likely a Chinese company is going to be able to sell into the Chinese market than a US one would. Remember that after the Snowden revelations China cancelled a hefty number of orders for IBM equipment, sufficient to do some pretty substantial damage to IBM's revenues and stock price. I suspect Lenovo is going to be a lot more successful in China than IBM has any hope of being.

Presumably IBM will retain an interest in Lenovo's server business as part of the deal, the same as they did with their PC business, but will have no involvement in running the business.

Re:Thinkpad line (1)

Anonymous Coward | about a year ago | (#46045713)

A public consumer buying a laptop is one thing, but I can imagine certain blue chip institutions (banks for example) will be slightly less interested in buying servers from Lenovo as opposed to HP. I have some IBM servers on order right now and there isn't usually a lot in it when deciding whether HP or IBM is better for my use case. If it was Lenovo or HP, that decision would probably only go HPs way.

So it will be a choice between MSS and NSA?

Re:Thinkpad line (1)

Anonymous Coward | about a year ago | (#46045805)

A public consumer buying a laptop is one thing,

Weird that you got tagged insightful, when your comment shows such a lack of understanding of the Thinkpad line of laptops. The Thinkpad line of laptops were marketed to blue chip institutions, those consumers who bought one generally did so as a result of experience using one provided by a big corp.

It took Lenovo years to majorly damage the Thinkpad reputation inside big corps.

Re: Thinkpad line (1)

eyegone (644831) | about a year ago | (#46046643)

It may have taken them years, but persistance apparently pays off. I don't know of anyone who thinks current generation ThinkPads are anything but junk.

That was fast but... (-1)

Anonymous Coward | about a year ago | (#46045269)

I'm faster! First post bitches!

Re:That was fast but... (-1)

Anonymous Coward | about a year ago | (#46045307)

you. you really failed.

It Makes Sense For Lenovo (1)

rmdingler (1955220) | about a year ago | (#46045315)

Their dominance in the shrinking PC market has to be a cause for concern regarding future revenue streams.

Diversify, innovate, or die.

Re:It Makes Sense For Lenovo (0)

Anonymous Coward | about a year ago | (#46045335)

Just let Lenovo go away permanently , they are terrible

Re:It Makes Sense For Lenovo (0)

Anonymous Coward | about a year ago | (#46045723)

Just let Lenovo go away permanently , they are terrible

He is going away.

Jimmy Fallon is taking over in just a few weeks. I still miss Johnny.

Re:It Makes Sense For Lenovo (1)

alexander_686 (957440) | about a year ago | (#46045493)

Really? Where are you getting your information from?

IIRC, last year Lenovo was gaining market share. (This was back when Dell was trying to take Dell inc. private, one of the reasons was that Dell was losing market share to Lenovo and HP.)

Re:It Makes Sense For Lenovo (2)

jythie (914043) | about a year ago | (#46045529)

But... but.. the PC is doomed! 3 months from now there will be nothing but tablets and cell phones!

Re:It Makes Sense For Lenovo (-1)

Anonymous Coward | about a year ago | (#46045551)

Richard Stallman's Tentacles.

Is anyone surprised? Nope.

Re:It Makes Sense For Lenovo (3, Insightful)

CastrTroy (595695) | about a year ago | (#46046087)

It's not quite that bad, but unless something significant changes, I'm at the point where I buy a new PC or Laptop only when the previous one dies. And I'll only buy a new PC if the old one is unrepairable, or repairs cost more than a new one. The current computer I have is 8 years old, and still works fine for my uses. I have a newer laptop (3 years), but it was a $400 laptop, bottom of the line. Still does everything I need it to. The PC market is definitely different than 10-15 years ago when you need to buy a new machine every 2-3 years just to run the latest OS and Office software. There is nothing interesting about going out and buying a new computer, and there's very little reason to spend more than the minimum amount.

Re:It Makes Sense For Lenovo (1)

karnal (22275) | about a year ago | (#46047127)

I am with you on this - and nowadays, small upgrades can make an unusable machine very usable! Best bang for the buck as follows in my opinion:

1. SSD - I bought two in the last six months; one for an older core2duo laptop and one for a core2quad desktop. Both machines run circles around the other hard drive based machines in my house.
2. Memory - even though DDR2 prices are seemingly through the roof compared to DDR3, still less expensive than a new machine. Max out that memory if you find it hard to open multiple apps. The laptop is limited to 4GB, I find myself hitting that limit (no swap on SSD).
3. Graphics - can't do anything about the laptop, but even low end cards can beat the high end cards of years ago.

These three things will make me not need a new desktop at home for a while, and even though the laptop I own can't get a graphics update - for what I do with it, it's probably going to outlast the desktop excluding any hardware failure.

Re:It Makes Sense For Lenovo (1)

Anonymous Coward | about a year ago | (#46046199)

But... but.. the PC is doomed! 3 months from now there will be nothing but tablets and cell phones!

The PC is not "doomed", but it's about as profitable and exciting as selling canned tomatoes. Yeah, people need them, always will, but they generally buy the cheapest ones on the shelf. The only growth comes from buying out your competitors or cutting costs.

Re:It Makes Sense For Lenovo (0)

Anonymous Coward | about a year ago | (#46045639)

Gaining market share in a shrinking market does not necessarily mean that you are actually growing. You may be apparently "growing" while the market overall shrinks even faster.

Re:It Makes Sense For Lenovo (2)

gstoddart (321705) | about a year ago | (#46045673)

IIRC, last year Lenovo was gaining market share.

But doesn't that translate to "gaining market share in an overall shrinking market"?

If we're to believe recent stats, and increasingly tablets are outstripping sales of PCs, then in the short term Lenovo could continue to increase their share. But, if the market is correspondingly getting smaller.

This gets them into the server business, which presumably is a lot more resistant to stuff like tablets -- because, nobody is going to run their enterprise software on a tablet. :-P

Re:It Makes Sense For Lenovo (1)

alexander_686 (957440) | about a year ago | (#46046749)

Fair point – I slightly misread the OP.

That being said, when I read the tea leaves I see the PC market as stagnant, not shrinking. (Most people who want a PC have a PC, but there is some room for growth. So you are mostly looking at replacement sales, and I can’t think of anybody who has replaced their PC with a tablet.). You can make a decent steady profit in a mature market dominated by commodity products, but it takes different business plan than a growing, dynamic market.

Re:It Makes Sense For Lenovo (1)

hendrips (2722525) | about a year ago | (#46046921)

If you trust Gartner's [gartner.com] numbers, Lenovo's absolute sales increased by about 6% year-over-year. This increased their market share from 16% to 18% because the rest of the PC industry is shrinking. So Lenovo is continuing to grow the PC business. Take those numbers with a grain of salt, of course, since Gartner is not always completely reliable.

Over 30 years (4, Interesting)

Koen Lefever (2543028) | about a year ago | (#46045321)

I remember thinking "too little, too late" when IBM launched its x86 line (the IBM 5150 PC with 8088 CPU) in 1981.

Damn, over 30 years later and we're still stuck with a variant of that architecture!

Re:Over 30 years (2)

ackthpt (218170) | about a year ago | (#46045695)

I remember thinking "too little, too late" when IBM launched its x86 line (the IBM 5150 PC with 8088 CPU) in 1981.

  Damn, over 30 years later and we're still stuck with a variant of that architecture!

Too little, too late? You missed the target methinks. They dictated the architecture which is on desks these days, and made Microsoft unbelievably rich with that little oversight, letting Gates sell his version of DOS, too.

Where they utterly blew it, though, was in pursuing the regrettable PS/2 line up. Horrible machines which locked you into horrible upgrade paths. It was shortly afterwards they began shedding people so fast I didn't know which salesman I was talking to from week to week when we were acquiring an RS6000 for some stupid purpose.

Re:Over 30 years (1)

Koen Lefever (2543028) | about a year ago | (#46046299)

Too little, too late? You missed the target methinks.

Yeah, that much is obvious. I really expected the PC to tank - after all we already had superior architectures, like MC68000 (obviously) and Z8000 (that would have been flamebait back then) and NS32000 was just around the corner.

It was the first time I witnessed how hype and a brand name could trump quality, especially because IBM had deliberately chosen a crippled processor (8088 was a 8086 with an 8-bit bus) - that was a harsh lesson.

They dictated the architecture which is on desks these days

Indeed, that's what I'm whining about. I guess I'll have to get over it some day.

Re:Over 30 years (4, Interesting)

nojayuk (567177) | about a year ago | (#46047509)

The 8086 family including the 8088 8-bit bus version were available to buy in commercial quantities at a time when the MC68000 was still a hangar queen with dev boards running at half the speed of the planned production machines (we tried overclocking our dev board from 4MHz to the production speed of 8MHz, didn't work). The Z8000 was even more of a pipe dream.

In addition the 8086/8088 worked with all the 8080-family bus chips like the serial port, parallel port, interrupt controller, 8087 maths chip etc. The MC68k had to fake all that functionality with separate and expensive silicon (no affordable FPGA chips back then). Software -- the 8086 was deliberately designed with an 8080-family structure of registers and memory access internally which made it easy to port existing CP/M code over to the new platform and Intel wrote compilers and provided other tools to make that job easy. The MC68k was a dream to write new code for but it took a lot more effort to get something, anything working on it.

Re:Over 30 years (1)

jalopezp (2622345) | about a year ago | (#46045727)

Duh, it was always meant to be backwards compatible.

Re:Over 30 years (1)

plopez (54068) | about a year ago | (#46045833)

WHich means they tigtly bound the OS to the hardware. Massive fail.

$2.3 Billion (5, Insightful)

globaljustin (574257) | about a year ago | (#46045347)

So basically Lenovo got a server manufacturer for almost $1Billion less than Snapchat is worth.

Re:$2.3 Billion (1)

Plumpaquatsch (2701653) | about a year ago | (#46045593)

So basically Lenovo got a server manufacturer for almost $1Billion less than Snapchat is worth.

Yeah, or Nest.

Re:$2.3 Billion (5, Insightful)

CastrTroy (595695) | about a year ago | (#46045705)

When you put it that way, you start to realize how big the bubble is getting in social and other web platforms. A business that's actually taking in revenue (quit a bit, I would guess) is worth significantly less than a web service that has no way of generating revenue, and who's users can switch to a new, almost identical web service tomorrow, if they start charging money or showing ads to generate revenue. Companies like to keep their servers the same, because things (like remote hardware management ex.HP ILO) don't interoperate between different vendors. So they're going to be able to retain quite a few customers as long as they don't change anything, and just keep on producing boxes that work.

Re:$2.3 Billion (1)

globaljustin (574257) | about a year ago | (#46046013)

Right I hear you. Huge bubbles of valuation still happening.

I honestly don't know *what* to think about bubble companies like Snapchat.

On one hand, it's bad for our industry to have such huge misperceptions of value...which filters down to the web designer job at a little design shop or a coder for a startup and even to how the government hires tech contractors.

On the flipside, it is amazing ammount of money for Snapchat, something which I'm sure alot of /.'ers could create with enough effort & maybe a non-tech partner. I love that the snapchats of the world are over-valued in that sense.

I *am* a business owner so I kind of have to decide...for me building businesses I'm hoping to sell I had to 'stick to the knitting' & not play the hype game, but I admit it is tempting.

Weapons grade stupidity (1)

sjbe (173966) | about a year ago | (#46045935)

So basically Lenovo got a server manufacturer for almost $1Billion less than Snapchat is worth.

Which merely tells you that Facebook's acquisition team is very likely incompetent since Snapchat has zero revenue and unclear prospects for profitability. $3 billion is an absolutely absurd price and spending money like that is a big reason why I have no intention of buying Facebook stock. It also tells you that the owners of Snapchat are a bunch of weapons grade morons for turning down an offer like that. The only thing dumber than Facebook offering that much money for Snapchat was when Snapchat declined the offer.

Re:Weapons grade stupidity (1)

tomhath (637240) | about a year ago | (#46045989)

The only thing dumber than Facebook offering that much money for Snapchat was when Snapchat declined the offer.

I don't know about that...Microsoft's offer of somewhere around $50B for Yahoo comes to mind.

Re:Weapons grade stupidity (2)

jddeluxe (965655) | about a year ago | (#46046137)

I don't know about that...Microsoft's offer of somewhere around $50B for Yahoo comes to mind.

Actually, the only thing dumber than that was Jerry Yang NOT taking the $50 billion...

Re:Weapons grade stupidity (3, Insightful)

sjbe (173966) | about a year ago | (#46046207)

I don't know about that...Microsoft's offer of somewhere around $50B for Yahoo comes to mind.

I agree it was a really really really dumb offer and even dumber to turn down but at least Yahoo has profits of about $1 billion/year. The valuation was stupidly high but at least you could base it on something. $3 billion for a company with zero revenues is beyond ridiculous and turning it down has to be one of the dumbest business decisions in the last 20 years.

Re:$2.3 Billion (1)

bayankaran (446245) | about a year ago | (#46045975)

So basically Lenovo got a server manufacturer for almost $1Billion less than Snapchat is worth.

Me thinks it was a backhanded plan by Snapchat founders/promoters to get someone interested in the company. Then it did not work as they wanted...they probably expected a bidding war.

first! (1)

mariusp (861402) | about a year ago | (#46045367)

and not a damn funny things comes to mind. This should however be interesting going forward as IBM always had a knack for getting out of a market just before it went to hell

even my refrigerator suggests; 'take a breather,, (-1)

Anonymous Coward | about a year ago | (#46045377)

come back in 24 hours. if you think this is unfair no one cares,

it's not the refrigerator stupid (0)

Anonymous Coward | about a year ago | (#46045419)

so you best pay attention that's quite affordable & can lead to contact with some very caring people, or not. never a better time to consider ourselves in relation to each other & momkind as our centerpeace. little miss dna cannot be wrong..

The world has gone nuts (0, Insightful)

Anonymous Coward | about a year ago | (#46045379)

Snapchat, which makes one app, turns down 3 billion. IBM's server business sells for less.

Re:The world has gone nuts (2)

jythie (914043) | about a year ago | (#46045597)

This really strikes me as something going very wrong in the tech industry, or perhaps where it intersects the financial industry. Any time you start seeing such offers it is generally a good sign that there is too much investment money and not enough good investments floating around... or some very dangerous group think is going on.

Re:The world has gone nuts (0)

Anonymous Coward | about a year ago | (#46045899)

Well.. it should tell you one thing, which was actually clear from the beginning; Snapchat and the likes are VASTLY overvalued. I mean.. really They have no way of generating profit, their users are the ones that will be gone in 12 months or less.. they have nothing. Idiots if they didn't sell for 3 billions.

Re:The world has gone nuts (2)

iggymanz (596061) | about a year ago | (#46047497)

nothing nuts about it, profits too slim in x86 commodity server market. IBM can focus on consulting, high end enterprise softwares and big iron.

Chinese Rule!!! (1, Insightful)

HansKloss (665474) | about a year ago | (#46045397)

Anything left from from good 'ol USA?
Yes I forgot. Numerous 3 letter agencies, cameras, police, security forces in kindergartens, schools and grocery stores, private prisons with largest population in it.

Re:Chinese Rule!!! (5, Funny)

supremebob (574732) | about a year ago | (#46045425)

I guess that IBM's customers can now stop worrying about the NSA planting bugs in their servers and worry about the Chinese government doing it instead :)

Re:Chinese Rule!!! (0)

Anonymous Coward | about a year ago | (#46045547)

I guess that IBM's customers can now stop worrying about the NSA planting bugs in their servers and worry about the Chinese government doing it instead :)

That is a larger concern on the server side yes.
As a regular consumer the local government is the largest threat. As a business the other government is the big threat.

Re:Chinese Rule!!! (4, Insightful)

alexander_686 (957440) | about a year ago | (#46045509)

IIRC Lenovo is headquartered in the US and just opened another plant for PCs in the south. I don’t want to dismiss all of the concerns but let us try to put this in perspective.

Re:Chinese Rule!!! (0)

Anonymous Coward | about a year ago | (#46046151)

Lenovo does not have a central headquarters. It has three. One of three is located in Durham, NC, on the campus where IBM's PC division used to be headquartered.

Re:Chinese Rule!!! (1)

alexander_686 (957440) | about a year ago | (#46046579)

We might be splitting hairs but Lenovo’s official headquarters is in North Carolina. That is, when Lenovo has to list it’s physical address, it lists NC. Which in and of itself is limited information. There are some companies where the headquarters is just a small rump part of the larger company.

There is also the country of domical, used for taxes, IIRC is China. And then there is the country of risk, which is where the 3 major centers come in.

The reason why I am pointing out that the headquarters are in NC is that it implies that there are Americans in high positions. Maybe not the top and maybe not the dominate positions, but still positions of power. It implies that NC is something more than a low end, low value assembly shop or that Lenovo is transferring out knowledge wholesale, hollowing it out, and then shutting it down.

  As somebody who supports free trade we are going to see more cases like this. Lenovo raises some concerns, but these are the typical concerns of increased foreign trade. There are other companies, such as Hewitt, which gives me pause. Hewitt is a very closed and murky company.

Re:Chinese Rule!!! (5, Informative)

hendrips (2722525) | about a year ago | (#46046321)

Lenovo has "dual headquarters" in Beijing and Morrisville, North Carolina, but it is definitely a Chinese company - stock is traded in Hong Kong, the directors are Chinese, etc. That said, Lenovo isn't really a state-backed enterprise to the same degree as companies like Huawei; they probably don't receive much more government interference than, say, Apple or HP. Admittedly, that's not much comfort...

Re:Chinese Rule!!! (4, Interesting)

TheloniousToady (3343045) | about a year ago | (#46045667)

Look at it this way: the Chinese may feel rich enough to pay $2.3 billion for server business, but only Americans feel rich enough to pay $3.2 billion for a thermostat business. So, who has the bigger Nest egg?

I for one.... (1, Funny)

slapout (93640) | about a year ago | (#46045407)

...don't welcome our new Chinese overloads. (Do you realize how hard it's going to be to learn to write/type Manderin?)

Re:I for one.... (0)

Anonymous Coward | about a year ago | (#46045471)

They have been doing it for a long time on the Thinkpad brand.

Re:I for one.... (1)

jythie (914043) | about a year ago | (#46045725)

Well, if they are making saner investment decisions then American companies right now, a little overlording might not be such a bad thing.

Re:I for one.... (5, Funny)

marsu_k (701360) | about a year ago | (#46045965)

...don't welcome our new Chinese overloads. (Do you realize how hard it's going to be to learn to write/type Manderin?)

You already seem to be struggling with English.

Re:I for one.... (1)

wcrowe (94389) | about a year ago | (#46046593)

Do you realize how hard it's going to be to learn to write/type Manderin?

Especially if you can't even write/type Mandarin in English.

ugly truth, they never stood a chance. (5, Interesting)

nimbius (983462) | about a year ago | (#46045449)

eh, greybeard here so maybe its the metamucil talking but IBM never stood much chance in the server realm. not that they didnt make a damn fine x86...most were quiet and powerful, but the market hat was looking toward IBM was too different and weird.

if you wanted a workstation for simple 2D cad stuff your clear alternative was dell. it was cheap, came with whatever copy of windows you wanted, and didnt bankrupt your small shop with overhead from licensing and support contracts....other than whatever autodesk was gouging you for.

a litle higher up the chain, if you were doing some composite rendering or computational fluid thermodynamics you had Sun microsystems. they made the bulletproof UNIX the grads from the local alma-mater recognized, and the hardware was dependable. sun servers chugged through the heavy arithmetic but the deskside SPARCstation was the sterling ally of the well-weathered fogie in the corner office who occasionally appeared for his 'laureate engineer' paperweight. the IT department appreciated suns no-nonsense RTFM mentality.

BIS, corporate informatics and number-crunchery that fed paychecks through the line printers and requisitions across the department heads was the golden child of IBM...heck, its in the name! BUSINESS machines! the AS400 ran cobol and from its cobwebbed confines were excreted every known model and function of how the money made the business and vice versa. "terminals" kept the cost of doing dirty work down and a few cloistered chosen were sequestered into office space to stitch new lovecraftian code whenever an earnings summary needed a tweak or a new way of visualizing things 'outside the box' needed rendering in code. AS400 turned into Z's and E's and I's and soon JDEdwards became Oracle and the new reality of deadlocked transactions and segfaulted Business Objects servers were a daily bain for the IT department but the song never changed. this was to become IBM. Because the reports were a touchstone of the business these machines lived to become behemoths and their triumphs accoladed from on high by watsons and oh so many marketeers that knew no boundaries in the iron they could sell. IBM was the Iron Business Marauder, the Intractable Bloat of the Management, the only way your applications would ever imply support for your way of doing business in the ERP EAP SAP clusterfuck that BIS and management had conceeded was somehow a necessity now. IBM could never hope to sell X86, because IBM sold complicity and approval in the licensing agreements for Oracle and enterprise, not hardware.

and while they toiled over the iron they sold, Dell and HP slowly absorbed the engineering fallout from SGI implosions and cheap commodity x86 incursion around a SUN that comparatively stood as a more expensive and only slightly quicker means of doing what the engineers had always done. Goosed a bit by linux, no doubt.

Re:ugly truth, they never stood a chance. (2, Interesting)

Anonymous Coward | about a year ago | (#46045485)

tl;dr: commodity hardware and software, over time, takes over everything, and IBM lacks a unique selling point

frankly I'm astonished that they outlived Sun, although both were obviously doomed

taking bets on how long before Lenovo buys the IBM trademark? Or will they not even bother?

Re:ugly truth, they never stood a chance. (5, Insightful)

Anonymous Coward | about a year ago | (#46046067)

As soon as IBM's real money makers go away, being System z and p. So, never.

Re:ugly truth, they never stood a chance. (0)

Anonymous Coward | about a year ago | (#46046083)

taking bets on how long before Lenovo buys the IBM trademark? Or will they not even bother?

Why would a huge, gazillion-dollar software-sales company like IBM sell its trademark to some dinky Chinese commodity-hardware company?

Re:ugly truth, they never stood a chance. (1)

iggymanz (596061) | about a year ago | (#46047467)

real IT greybeard here, those x86 commodity crap wintel boxes aren't real servers. Let me give you a hint, the world's money and your insurance and stocks are on real big iron, and IBM dominates that market.

so... (1)

buddyglass (925859) | about a year ago | (#46045475)

Is IBM just "Global Services" now?

Re:so... (1)

ackthpt (218170) | about a year ago | (#46045645)

Is IBM just "Global Services" now?

Yep. If you have one of those big, spinny carbord globes, they'll come by and polish it up a treat for you.

Never was. (0)

Anonymous Coward | about a year ago | (#46045917)

They don't do ANY of the services themselves. They have their helpdesk pass the ticket back and forth for MONTHS before finally subcontracting it to Brains II, Compucom, or Metafore, who show up same day or next day once they receive the ticket.

Re:so... (1)

shadowknot (853491) | about a year ago | (#46046077)

There's still the large pSeries and System z market.

Re:so... (2)

PolygamousRanchKid (1290638) | about a year ago | (#46046527)

They still make a lot of software: http://www-01.ibm.com/software... [ibm.com]

And I guess $1 billion of that sale will be used to finance their new $1 billion Watson division.

Straight Out of Cringlely's Crystal Ball (1)

theodp (442580) | about a year ago | (#46045483)

Robert X. Cringely's Ten technology predictions for 2014 [cringely.com] : #2 - IBM throws in the towel.

Re:Straight Out of Cringlely's Crystal Ball (0)

Anonymous Coward | about a year ago | (#46045701)

Robert X. Cringely's Ten technology predictions for 2014 [cringely.com] : #2 - IBM throws in the towel.

Crystal Ball? More like a clue-by-four...a little late in the game to be calling this a "prediction."

Re:Straight Out of Cringlely's Crystal Ball (0)

Anonymous Coward | about a year ago | (#46045729)

Robert X. Cringely's Ten technology predictions for 2014 [cringely.com] : #2 - IBM throws in the towel.

No, he predicted IBM would give up on their financial boast^H^H^H^H^Hambition of reaching $20 EPS by 2015, which the previous CEO Sam Palmisano announced to Wall Street several years ago. Cringely's not the only one - other analysts think that's out of reach for IBM. But this server division sale shows that top management still thinks it can make it happen.

Previous offer ? (0)

Anonymous Coward | about a year ago | (#46045489)

Do we know what was the offer from Lenovo that IBM refused last year ? Could be interesting (no, I didn't bother RTFA)

call 'whistle blowers' something else? (-1)

Anonymous Coward | about a year ago | (#46045555)

concious consciencers might work? that whistle title just drips of negativity anymore? like folks who hide & use chalk....

from the bottom line; Great spirits have always encountered violent opposition from mediocre minds. -- Albert Einstein

One of these days... (1)

ackthpt (218170) | about a year ago | (#46045641)

One day I'll be driving past a strip mall and see the familiar blue sign. It will now be the trademark of a shoe store.

So time for new acronym (0)

AegisPrime (2966741) | about a year ago | (#46045647)

So my trusty "Internal Bowel Movement" now needs to be changed to "I Beek Engrish"?

Is it too soon to send our Condolences? (0)

Anonymous Coward | about a year ago | (#46045659)

IBM .. big Iron, knew it well.. couldn't make the leap to the Cloud Iron

Survived by 6 billion of planer Earth, Sol solar system, Orion arm

Great (5, Insightful)

FuzzNugget (2840687) | about a year ago | (#46045669)

Now Lenovo can fuck up that product line too, just like they did with the ThinkPad.

Too harsh... (2)

bayankaran (446245) | about a year ago | (#46046113)

I think you are too harsh on Lenovo.
I am using the Thinkpad X series and T series for the last 12 years...from the IBM days to the current iteration. I am yet to see a significant drop in quality on those two lines after Lenovo started rebranding. I am not sure about their entry models though.

Re:Too harsh... (2, Informative)

Anonymous Coward | about a year ago | (#46046397)

I just went through the entire Lenovo line - every laptop/ultrabook they produce - and they offer only ONE machine that:

  • * doesn't have a reflective screen
  • * has a centered keyboard and trackpad
  • * is a 15" screen or higher, 1920x1080

That machine is the W530 [lenovo.com] , and it doesn't even have the new Haswell i7 processors. It's one generation behind and they're still asking $1300 for the base configuration.

The rest of the Lenovo models have characteristics which impair usability - basically, doesn't meet the bulleted list above. In addition, they add on screwed-up keyboards, like:

  • * the X1 Carbon [lenovo.com] , which instead of a caps lock key has a home + end key and replaces the function keys with an LCD panel that changes based on the application you're in
  • * other models which don't have an indicator light for caps lock - I'm getting lazy and don't feel like posting any more links

I saw another, new model that was ranked 2.5/5 stars for being unable to resume from sleep mode because Lenovo ships broken drivers that conflict with each other.

Lenovo has destroyed Thinkpad.

CAPTCHA: stable

Re:Too harsh... (0)

Anonymous Coward | about a year ago | (#46046465)

Really? You don't see how Lenovo has messed up the Thinkpad brand? Glossy non-IPS screens, neutering the Trackpoint by removing the buttons and making it work in Windows only, removing the function keys, removing the Thinklight, making it impossible to replace the battery, making it thin to chase the Macbook Air, soldered on RAM...etc. In an era where there is more choice than ever before in the PC market, Lenovo has doubled down on the Microsoft stack. And now, this:

http://cdn.arstechnica.net/wp-content/uploads/2014/01/thinkpad-x1-carbon-keyboard.jpg

Typing this on an X201 w/IPS screen. I've owned every generation T or X series dating back to the X30. To say that there hasn't been a significant decline in quality (although, I admit, quality peaked around the T60 line which was all Lenovo) shows you haven't been paying attention. The Thinkpad brand is a toy leveraged at consumers these days because they've heard in the past that "Lenovos are good."

Re:Too harsh... (3, Informative)

bill_mcgonigle (4333) | about a year ago | (#46046989)

They have a model that competes in that space, sure.

However, I'm typing this on an e430. Proper keyboard, non-glare screen, f-keys (OK, the F-key paint is secondary to the 'media' paint, buy they are marked). It has a trackpoint and hard buttons for the insane people who can use those and they work on Fedora just fine. Centrino wireless, mSATA slot for the SSD (128GB Mushkin in mine), DVD-R, removable battery. I've got 8 gigs of RAM in it. The BIOS even has a setting to put the control key back where it belongs. I got the one with the lowest-wattage i5 that has AES-NI and the whole rig cost me under $900.

Two things I would like: backlit keyboard, better resolution screen. What I don't care about: looking hipster at Starbucks.

Re:Great (0)

Anonymous Coward | about a year ago | (#46046117)

Now Lenovo can fuck up that product line too, just like they did with the ThinkPad.

I have a Lenovo laptop. Rock-solid, reliable, and built like a tank.

Now if you want to talk about fucking up a product line, the name Dell comes to mind....

Focussing on POWER (0)

ChunderDownunder (709234) | about a year ago | (#46045759)

If the future of commodity servers is low-powered ARM64 running Windows RT Blade Edition then IBM exits at the right time can focus on their own 'high end' and leave their competitor Intel's Xeon arch to Lenovo.

Everyone Gets Fired Now (4, Funny)

tekrat (242117) | about a year ago | (#46045963)

"No One Ever Got Fired for Buying IBM"

Except now, you can't buy any IBM hardware, right? So, how are you going to avoid getting fired?

Re:Everyone Gets Fired Now (0)

Anonymous Coward | about a year ago | (#46046035)

You have an excuse for buying Brand X servers now, but if the database isn't Oracle then it better work like a champ (see: healthcare.gov).

Re:Everyone Gets Fired Now (0)

Anonymous Coward | about a year ago | (#46046111)

IBM is keeping its enterprise-grade hardware lines.

I will never... (0)

Anonymous Coward | about a year ago | (#46046135)

buy Lenovo. Why? Because it is a Chinese owned company. It's one thing to have a machine made in china, its quite another to have a machine made in china and sold by a Chinese company. There will be backdoors on all of that hardware.

Re:I will never... (1)

kullnd (760403) | about a year ago | (#46046425)

You do realize that Lenovo (the Chinese Company) builds ThinkPad Laptops in the USA? Strange huh - The US companies all build their stuff in China.

Re:I will never... (1)

jerryjnormandin (1942378) | about a year ago | (#46046633)

Save here. Do you remember when counterfiet Cisco devices hit the market ?

Distributed Systems? Bah! (3, Interesting)

shadowknot (853491) | about a year ago | (#46046163)

The truth is that IBM's primary server market has never been its x86 offerings. The pSeries and System z market is much more lucrative what with engine licensing (CP, IFL etc) and massively expensive platform specific operating systems (z/OS, z/VSE, z/TPF, AIX etc) along with decades old products like CICS powering the vast majority of the financial world. I work closely with a contractor who worked for IBM for nearly four decades and his attitude to the distributed world is likely representative of a general antipathy to x86 on the server side within IBM (though I have no evidence other than him to back that up!) I suspect though, that the fact they can focus on "real" servers on the hardware side will probably be seen as good by most in Endicott.

Flex? (1)

HideyoshiJP (1392619) | about a year ago | (#46046239)

I can see the sale of the System x and Bladecenters, but the sale of Flex Systems surprises me. I thought that was supposed to be their new hotness of 2012 - the magic box that lets you fire all your sysadmins. Maybe people didn't like having to develop using websphere?

Re:Flex? (1)

gelfling (6534) | about a year ago | (#46047499)

That's a done deal through virtualization anyway. Cram 20 images on a few MPU blades.

I am not going to buy a server made in China (0)

Anonymous Coward | about a year ago | (#46046619)

Hmm.. pSeries is much better anyway. The sale of Flex suprises me because IBM was touting it as the "next" platform. To be honest when IBM came over to where I work to build up a demo cluster they failed misrebly. Either the Systems Engineer had little or no training or the hardware is not ready for prime time. I wouldn't trust Lenovo for any Government systems. It's going to be Go Power or Go home.

I wonder if they'll keep the IBM name for a while (0)

Anonymous Coward | about a year ago | (#46046821)

ThinkPad was a valuable trademark, for laptops -- Lenovo didn't dump it. I wonder whether servers will still say IBM for a while. (But then, Lenovo has had quite a few years since the portables acquisition to gain more recognition of its own name; back then "Lenovo" was still de novo, and IBM ThinkPad was at the top of the laptop heap, or close to it.)

It's not even ALL the Intel server biz (1)

gelfling (6534) | about a year ago | (#46047479)

Just the commodity low end part of it e.g. the servers in a single server cabinet, the small office market. Large Intel servers are still IBM.

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