Big Blue Dies

BEIJING/SAN FRANCISCO (Reuters) - IBM is selling its PC-making business to China's largest personal computer maker, Lenovo Group Ltd., for $1.25 billion, marking the U.S. giant's retreat from an industry it helped pioneer in 1981.

Well... all those man hours. All that investment. Gone. IBM was one of the last things that I felt good about in America. Silicon Valley is dead, IBM is gone, and now Bill Gates has to learn Chinese. Good thing I know how to shine shoes. Just unbelievable. What will this mean for US security? And on Pearl Harbor Day, of all days! Unbelievable.

...

I think you're exaggerating the situation. Relax.

We still have Dell.

Besides, IBM wasn't doing too great in the PC industry anyway.

Nox, an IBM 760 runs the International Space Station. Countless military and government PC's carry the IBM label. I think this shows that Americans have been 'relaxing' far too often for far too long. The country is about bled dry with trade deficits, and now we are losing basic industries that have defense applications.

[edit on 8-12-2004 by Chakotay]

Well then blame then Bush Administration like everyone else is doing.

The gov't will find some other manufacturer.

Maybe I'm taking IBM too literally, but maybe they're doing this because it "frees IBM to focus on higher-margin businesses such as computer services and software." Also, it seems to be more profitable for them than staying in the PC business.

I find the idea that this signifies more than that somewhat questionable, but people are free to read whatever things they want into news like this. I'm not sure how enlightening doing that may be, but I do it all the time myself.

I thought this was interesting:

The deal, which is expected to close in the second quarter of next year, will result in a pre-tax gain of $900 million to $1.2 billion, said Mark Loughridge, IBM's chief financial officer, on a conference call. It will enable IBM to improve gross profit margins by 3 percentage points, he added.

I'm not sure how that's a bad thing.

I was also not aware that an IBM 760 -- which is a laptop computer, if I am not mistaken -- is what "runs the International Space Station". Some elaboration on that might be in order.

Here's a link to the article, for those wishing to read more:

IBM selling PC unit for $1.25 bln to China's Lenovo

Those wondering what this is all about may want to read it.

We still have Dell.

Oh dear God, are you serious??

Guys, chill, IBM isn't going to die, it is simply selling off a division which is no longer strategic to it's core IT business (and which makes little profit due to PC's selling for peanuts these days).

IBM still has mainframes and mid-range systems such as AS/400 and RS/6000, not to mention it's brilliant research and development division.

I've worked in IT long enough to remember how computing was done before PC's came along (and regardless of all the arguments about the benefits of a PC on every desk) the fact is this: IBM had a whole lot more influence and control over the IT world, and also made enormous profits, before PC's were invented.

So to see them wave goodbye to PC's is not a surprise or a disaster, it's simply the end of a phase which has little or no benefit to IBM any more. Let them get on with bigger stuff, and maybe they'll become bigger and better than Microsoft once again.

This move allows IBM to focus on advancements in chip design and manufacturing,
including the PowerPC line, dual core and Cell processors and related server and professional workstation technologies.
This move also heavily favors the switch to machines taking advantage of the far more stable OSX and Linux UNIX based operating systems.

I think it was about Big Blue, but it was the first time I ever heard the word Quadrillion used in a serious sentence.

Originally posted by Majic (snipped up by Chakotay)
...maybe they're doing this because it "frees IBM to focus on higher-margin businesses such as computer services and software." Also, it seems to be more profitable for them than staying in the PC business.
I'm not sure how that's a bad thing.

I was also not aware that an IBM 760 -- which is a laptop computer, if I am not mistaken -- is what "runs the International Space Station". Some elaboration on that might be in order.

First, for credibility, here's some info on the ISS's 760. I know whereof I speak having worked at NASA. I will not link to info on milspec IBM's or secure systems but I think you can see that I am not speaking out of my hat that this deal has tremendous security implications. Government systems (especially flight qualified, hardened units) tend to stay in service for much longer than civilian systems. The real-world know-how that is being transferred for the imaginary idea of cash is irreplaceable and way undervalued.

As for a profitable deal 'not being a bad thing': us old guys with degrees in business remember when Americans understood the military value of autarchy. While IBM may improve its bottom line in the short run, America loses (jobs, infrastructure, know-how) in the long term. American workers can not work for $2 a day and make rent, so IBM and others outsource to someone who will, then the factory closes and !BLING! the business is sold off overseas, jobs disappear, the local donut shop closes and Uncle Elmo winds up at my back door knocking for a place to spend the night as the depression deepens.

Do I sound cynical? Forgive me majic, but I remember IBM when It Was Computing, and the days when workers had things like benefits, retirement, unions and so on. I earn less than my Dad did, and the curve drops deeper every year. Its like watching a friend die.

They could have made the PC business profitable or sold it off to Dell.

You may want to do a bit of research on the new 970MP and 970 GX processors
as well as the POWER 5's

"The IBM PowerPC 970MP RISC Microprocessor
is a dual-core, 64-bit implementation of the IBM
PowerPC � family of reduced instruction set computer
(RISC) microprocessors that are based on the PowerPC
Architecture. This dual microprocessor, also called the
PowerPC 970MP, includes a Vector/SIMD facility which
supports high-bandwidth data processing and compute-intensive
operations. The 970MP is also designed to
support multiple system organizations, including desktop
and low-end server applications, up through 4-way SMP
configurations.
Note: The IBM PowerPC 970MP incorporates two complete
microprocessors on a single chip, along with some
common logic to connect these microprocessors to a system."



Also keep in mind how long we have suffered from the "lowest bidder" mentality.

[edit on 8-12-2004 by FallenFromTheTree]

Originally posted by Chakotay
First, for credibility, here's some info on the ISS's 760. I know whereof I speak having worked at NASA.

I'm not disputing your credentials, but the claim that "an IBM 760 runs the International Space Station" seemed a bit dubious to me, and still does.

As for the other details, without going off an a major tangent, I think your concerns are probably misplaced, based on my own experiences in the business, which are not going to be discussed in detail on the Internet.

Opinions vary, and that's fine.

IBM As A Political Leader?

Originally posted by Chakotay
As for a profitable deal 'not being a bad thing': us old guys with degrees in business remember when Americans understood the military value of autarchy. While IBM may improve its bottom line in the short run, America loses (jobs, infrastructure, know-how) in the long term.

U.S. economic policy is the responsibility of the U.S. government, not IBM, although with so much taxpayer's money being thrown around and stuffed into so many pockets, that fact often gets overlooked.

If you want IBM to handle U.S. economic policy, work to give IBM legal authority to do so. A more practical idea would be to put political leaders in power who share your opinions. Good luck with that.

Blaming the IBM management for discharging their fiduciary responsibilities doesn't accomplish anything useful. IBM is not responsible for U.S. economic policy.

The Business Value Of Sentiment

Originally posted by Chakotay
Do I sound cynical? Forgive me majic, but I remember IBM when It Was Computing, and the days when workers had things like benefits, retirement, unions and so on.

Businesses run on money, not sentiment. If the management of IBM thought otherwise, IBM would run out of money, close its doors, put a hell of a lot of people on the street and bankrupt lots of investors.

I don't understand how the idea that businesses must make a profit can be so hard for some to grasp or be a source of emotional distress. It has always been that way, whether people choose to be aware of it or not.

Sideline Quarterback

Originally posted by Chakotay
They could have made the PC business profitable or sold it off to Dell.

Easy enough to say, since apparently neither was a viable option for IBM. Of course, should you be able to convince a majority of IBM's investors that your business strategies are more effective than those of the people they elected, you could change that, I suppose.

Ultimately, the only opinions that really matter in cases like these are the opinions of the shareholders whose money actually rides on these deals. If you disagree with that, we will probably not agree on much else.

God,

IBM was 3rd place in PC manufacturing.

It's not a profitable industry.

Dell is #1 in America, so I don't know why someone had to go make fun of my statement.

Originally posted by Nox
God,

IBM was 3rd place in PC manufacturing.

It's not a profitable industry.

Dell is #1 in America, so I don't know why someone had to go make fun of my statement.

A personal computer nowadays is merely a collection of sub-contracted parts in a box.
The hard drive in my Mac is an IBM/Hitachi and it works fine!
The DVD burner comes from Pioneer
The power supply, fans, cables, connectors and so on are mostly imported from Asian factories.
Even the motherboard and processor are Apple designed, but the actual manufacturing
is sub-contracted overseas.

This goes pretty much the same for Dell.

IBM has simply decided to stop making enclosures for these collective parts
and sold that operation to Lenovo.

IBM WILL continue to develop and manufacture processors and other critical
components for workstations and servers.
They have also decided that UNIX based operating systems are both more
stable and more secure, which reflects better on their hardware.

What many STILL fail to see is that the entire industry is turning away
from X86 architecture AND porting to UNIX based operating systems.
Once Microsoft FINALLY perfects LONGHORN, ( 2006 )
most of what currently certified Microsoft technicians know
will go the way of the DoDo!

With UNIX based LONGHORN,
the newer 64bit hardware and software will more than likely NOT be
reverse compliant, so everything that works for your Windows XP computer
will have to be replaced or upgraded.

Goverment, industry and average users have grown tired of dealing with the bane on humanity that running Windows brings.
Unfortunately, their previous investment in hardware, software and training
makes it difficult to escape what they know.
And those who cling too tightly will be left in the dust.

I understand your sentiment about losing jobs to overseas workers,
but our expected income requirments are apparently too great to keep the prices
affordable or profitable enough to keep those jobs here.

The good news is that your current machine will still run on LINUX

So you may eventually be trading those Butterflies for Apples & Penguins









[edit on 8-12-2004 by FallenFromTheTree]

Thank you for your exhaustive/comprehensive backup.

Originally posted by Chakotay
Nox, an IBM 760 runs the International Space Station. Countless military and government PC's carry the IBM label. I think this shows that Americans have been 'relaxing' far too often for far too long. The country is about bled dry with trade deficits, and now we are losing basic industries that have defense applications.

[edit on 8-12-2004 by Chakotay]

Most affordable p/c's used for something as vital as our space programs
are nothing more than keyboard controllers to access the BIG GEAR
in the servers as long as you have the clearance.

Part of what brought down the power grid last year was caused
by infected personal laptops connecting to the improperly protected command
networks.
Then computer failures cascaded to shut down "possible" trouble in the grid
to protect the grid.

I want to make clear I would oppose this sale to any company from any other country. IBM has been a strategic asset to the US for many decades. This sale is akin to Ford selling off its passenger automobile business because 'it has too small a margin' to concentrate on heavy trucks. It is suicide to abandon a core technology. Is something going to replace the PC in American society? Or does Big Blue know that in the future the PC will be banned, or require a permit like a handgun? Was the price discounted because responsibles were compensated to facilitate the sale? What do the shareholders have to say about this, and why are they silent in the US media? Is the American economy really so bad off that Pop has to sell the barber chair to make rent?

PC's are a commodity - the big bucks IBM makes comes from the big iron and the consulting services and that is not what they are getting rid of. Check their annual report for more info....

IBM is fine, Silicon Valley is not dead and we haven't sold any of the important farms yet....

I understand your perspective, but you seem to have missed the point that

IBM is NOT getting out of the computer business.

They have simply decided to concentrate their efforts towards SERVERS &
CHIP MANUFACTURING.

While it's true that we are losing countless jobs to foreign workforces,
we also want all this cool hi tech gear CHEAP
and cutting labor & production costs makes that possible.

I'm glad you brought up the subject of cars.
Something we built rather well up till 1972.

We have Ford, Chevy and Mopar
So why do so many of us buy Toyota, Honda, BMW and Mercedes?
They certainly aren't CHEAPER!

While several automotive importers have now created many port of entry assembly jobs here, doing so is now indicating an unfavorable decline in quality control. WHY?

Todays Honda built in Japan is still a very reliable car,
while those being assembled here are having many problems.

We American's earn more in one hour than many foreign workers earn in a month.
I know that our workers are quite CAPABLE of producing the finest products on earth
but our pride of workmanship seems to be slipping.
Many of the products we DO make are comparatively overpriced and that is killing exports.
Perhaps we'll learn something from this and get our act together.

Anyway,

I suggest that you do a bit more research about what IBM IS doing
with the Power PC.

www.power.org...
forums.appleinsider.com...





[edit on 11-12-2004 by FallenFromTheTree]

The car thing - just about every manufacturer you mentioned has production facilities IN the US!!