It's old news already - IBM sells the PC maker unit to Chinese Lenovo Group for $1.75 bn. Why - because a PC is like a toaster nowadays (read commodity). Mark puts it very well in strategic terms using Clayton Christensen. For a better understanding or a theoretical backgorund of what he is saying perhaps it'd be good to take 2-3 good hours and listen to this while having this presentation in front of you. Highly recommended.
UPDATE: Read over at the Register two very good related articles: one about the post-PC era (good questions and a great analogy with the car users) and another one speculating on a potential close partnership between Apple and IBM. Why not?
- Also, via Jeff - apparently the deal also involves IBM taking an 18.9% stake in Lenovo.
- By reading Jonathan Schwartz's take on the matter and the post PC era, it just stroke me that IBM's move is similar to Intel's exit from RAM business back in 1984. At that time RAM was a compete-on-price industry with scale and costs as main drivers and with Japanese producers focusing on the operational efficiencies in the driver's seats.
Up to a few months ago, I've been using IBM Middleware for about 1.3 years. I'll be the first to tell you that they're making a killing with products that require a lot less expenses than hardware (especially the unglamourous kind - PCs). You won't believe how profitable middleware software can be, especially from the perspective that it's very buggy but the customers take it in silence, work around the problem and can't complain. If a company standardized on IBM middleware and IBM big and biggish iron, at an executive level (CEO, CFO or CTO seducing ;), the complaints of IT workers who'll need to deal with the crap will be heard with great difficulty. This kind of corporate cash-cow is mostly self-sustaining. All IBM need to do is churn out the same old half-baked software... damn I'm bitter! Do I sound bitter?
Well, yes, the customer side is one way of putting it --- IBM is famous for the great service support, actually American friends of mine claim to have bought ThinkPads for exactly this reason. What is more interestingly IMO is the strategic implications of this move - IBM's core competency is definitely in the mainframe and in the consulting services, and while the PC unit was still making a helluva lotta cash (about 13 billion last year I think) they were lucid enough to dump it and focus on something else. It could it be the compute engine area (i.e. microprocessors), it could be the compute process (as you mentioned they're strong in the middleware area - app. server infrastructure that is) or it could be the business layer. We shall see.