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Money will buy a fine dog, but only kindness will make him wag his tail
Big Blue sees a boom in hardware
A FEW YEARS AGO IBM was smugly telling us how smart it was to have flogged off most of its hardware business. But now it seems that it might be regretting the move.
Although IBM sold most of its hardware manufacturing in a bid to re-invent itself as a services company, it kept its mainframe and Unix servers businesses.
Now Oracle's purchase of Sun Microsystems has seen orders for hardware flooding into Big Blue.
According to the Hudson Valley Times Herald-Record, IBM is seeing a sharp spike in lucrative, buy-in-bulk customers.
IBM spokesman Mike Corrado said companies were turning to IBM servers because of the long-term investments it made in technology. This is the opposite of Sun where customers do not know what Oracle will be doing with the outfit, especially its big-tin servers hardware business.
But it is also the opposite of what IBM had been thinking would happen with hardware a few years ago. CFO Mark Loughridge seemed a bit surprised earlier this month when he dropped hints that its underperforming hardware units were about to rebound.
IBM said 235 customers moved their business from Sun and competitor Hewlett-Packard to IBM in just the past quarter. So far this year, IBM has won 400 customers away from Sun and 200 from HP.
We bet IBM is wishing it still had a few desktops and laptops that it could flog to these new customers in package deals. µ
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For once I actually see myself agreeing with you Nick. IBM made a big mistake of selling of its hardware business to Lenovo.
Selling the low end stuff was the right move and not one which they are likely to regret given the very low margins you get from this type of hardware. IBM's strategy is to go for higher margins as far as possible. They didn't sell "the hardware business", they just stopped selling the commodity end.
The only disadvantage I see is that the users don't see your logo every time they look at the screen.
IBM was correct in selling off the commodity PC business. Their expertise is in mission-critical systems. Any fool can build PCs, right Mikey?
Anything Sun can do,
IBM can do better.
IBM can do anything
Better than Sun.
IBM and Sun went diametrically opposite ways with hardware. IBM was probably happier than Sun with their decisions, but not all the Sun ideas were bad:
- Sun is selling mostly Intel (but no Itanium). Good for commodity sales but brand allegiance is weak.
- Sun outsourced SPARC manufacturing and has kept it as the same GHz level for almost 10 years. Jeez.
- Sun has strong product identity for its UNIX variant and key software pieces. Probably the best stuff about Sun!
- IBM abandoned Intel? Nope, they just stopped selling consumer boxes. They sell Intel servers against everyone (HP, Apple, Sun, everyone). They do sell a Power variant for PS3, though.
- IBM had developed Power to a very high degree. Core-per-core, they are the fastest, by a lot. They are FAR from the cheapest, though.
- IBM's UNIX doesn't have the strong association that Solaris has, but their WebSphere, Portal and DB2 are Top-3 in their respective fields.
The reason IBM sold of the hardware was because the margines were soo thin.
As for server hardware? They charge almost 2 grand for a kvm switch and monitor combo. Lenovo has had a hard time turning a profit the last few years I'm not sure if it would have been worth the hassel. As a service tech for IBM/lenovo partner; I love the hardware (thinkpads). Keyboards are the best and lenovo has been keeping up with the thinkpad tradition. Uncompromised business laptops. Funny thing is that I still get replacement warranty parts from the IBM depots.
I think the IBM should keep their Thinkpad, they do really are the best.
The new Lenovo Thinkpad keyboards are kinda feel like a cheap one from a corner shop... Even the Dell keyboard felt better. @.@
And for Sun, good god really don't know what Oracle will do to it (not just hardware, but software too) ...