In other words, a big mess in the offing.
Would you have expected him to say anything different? No doubt this is a roll of the dice. And on the surface, the decision to sell its PC business to Chinese computer maker Lenovo looks like a humiliating retreat from a business that--more than any other company--IBM legitimized when it introduced its original PC in 1981.
But with all due respect to Dell, whose eponymous company did much to force Big Blue's hand, IBM won't regret its exit from the PC world. That's because there is a careful logic behind this radical refashioning, one that reflects the imprint of Sam Palmisano.
Even before he took over as chief executive from Lou Gerstner in 2002, Palmisano was at the center of strategy shifts that pushed IBM into realms far removed from the PC business. Palmisano, who at one time ran IBM's personal computer group, came away with an up-close understanding of that cutthroat business. If he learned one lesson during that tenure, it was that the future was elsewhere.
Palmisano also was an early champion of Linux. When he began positioning IBM as a big supporter of the open-source movement, it was not at all clear whether he was inspired or simply delusional. Microsoft had ruled the roost for so long that it was widely assumed the Windows operating system was untouchable. Bad assumption, it turned out.
With open-source software bundled onto aggressively priced hardware, IBM has since taken advantage of a golden opportunity to push its own (high-margin) proprietary middleware, accompanying applications and services. With the sale of its PC business, IBM no longer needs to pretend to be nice to Microsoft and can get about the business of settling old scores left over from the era of the OS wars in the early 1990s.
Above all, Palmisano gets top credit for securing the future of IBM with its big move into services. Even though the global services push got started under Gerstner, it was Palmisano who drove that train. With 20/20 hindsight, it now seems a no-brainer: Margins on personal computers, workstations and servers were getting thinner every year, and IBM needed to find a place in a high-priced business where the word "commodity" was not part of the lexicon. Under Palmisano, IBM achieved all that in spades--so much so that Big Blue's success in services loomed large in Hewlett-Packard's controversial acquisition of Compaq Computer, a deal that has yet to prove itself.
Charlie Chaplin was the perfect mascot when 40 megabytes was mega-storage and 80286 microprocessors constituted technology's cutting edge, but those days are gone. Just like legendary safecracker Willie Sutton, Palmisano long ago recognized where the real money was--and he's pointed IBM in that direction ever since.
Biography
Charles Cooper is CNET News.com's executive editor of commentary.
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Business people who've been dealing with IBM for many years have noticed that the company's attention wanders away from software when it's cost is not increasing regularly due to hardware upgrades. Their eyes are on the revenue stream.
The fact of IBM not having a double stream of revenues will worry many IT managers and their bosses. In fact, I think this is another of IBM's dumb moves like the PC-DOS debacle.
Today, IBM stands for Service provision (outsourcing), middleware and consulting engagements more than anything else. My company is full of IBM with not an IBM PC in sight.
The current move by IBM to dump their PC business epitomizes the current trend in the United States to shift ever more business to China in the hopes that it will make even more money for the stock holders and, of course, for the high rollers in IBM. The fact that they have left their former PC customers high and dry, not to mention the lost jobs within IBM's PC operations never entered the equation.
The mass exodis of US business to China, all in the name of more money for the top people leaves the average US worker out in the cold; forced to hunt for lower paying jobs. This doesn't seem to matter any more to either big business or the current administration.
The people who purchased IBM PCs are also left out in the cold as well. I can imagine the kind of support I won't get when I have a problem with my Thinkpad X-40. Fortunately my other computers are Dell and, so far, they seem to know how to run a business.
It also appears that no one even attempts to address the fact that the quality of Chinese made goods ranges from barely adequate to abysmal. My personal experience with Chinese made goods is that they usually fail or fall apart right after the warranty expires.
I,for one, hope the IBM deal blows up in their faces. I know that I will never have anything to do with anything IBM is associated with from this point forward.
IBM has again proven that greed conquers all.
awalen@comcast.net