Markets move on rumors and the rumor that IBM is looking to sell its System x series group to Lenovo has undoubtedly done some damage. Bill Moran and Rich Ptak posted about the IBM rumor and made some excellent points, including the reassurance that IBM’s PC sale didn’t put buyers at risk and actually proved to be quite successful. Since I was intimate with the spin-off of the IBM PC Division to Lenovo, I thought I would add some additional perspective. But I generally agree with their position; there is nothing for buyers to worry about unless they just like to worry.
From the IBM PC Company to Lenovo
The IBM PC Company was a unique organization inside of IBM; very nearly independent. They had created some amazing things, but this organization had made some huge stumbles. They’d actually brought out the first smartphone. They had several attempts at introducing tablets. And they even had a forward looking concept that could have revolutionized PCs called the Modular Computer. But they could never get the backing from IBM Corporate to fully fund these efforts or assure them. This was the downside of being “nearly independent”--it provided a structure, but the company really couldn’t execute to a high level and IBM was shifting its interest more and more to servers, software and services.
I remember receiving the call about the spinoff of the IBM PC Company to Lenovo, and I, too, was very concerned. At the time, Lenovo was a China-only company that mostly sold to consumers. It seemed more of a Chinese clone of Apple than an IBM-class company, and I thought they were going to screw the whole thing up. But they didn’t.
They actually retained much of the value they bought when they purchased the PC Company and made the result so strong that it has passed HP to be the number one PC in the world. It is still aligned with IBM on PCs, so IBM customers actually ended up better off than they likely would have been had IBM retained the unit. It came down to focus, and Lenovo could focus where IBM couldn’t.
This is my long way of saying that if IBM did sell to Lenovo you’d likely find it was because they’d lost interest in the System x series and it would be better if they sold to a focused company than if they tried to retain the product group.
However, from all the information I have found, IBM isn’t selling the x series, but rather investing in it and that is a very different thing indeed.
I was just at an Intel event on servers, and they consistently listed IBM as one of their top partners and collaborators on advanced Intel servers. This doesn’t sound like IBM is abandoning the System x series at all, but instead sounds like they are working with Intel to make sure their Intel-based offerings are competitive. Intel, of course, would never say which of their partners is most committed, but they spoke about IBM with reverence and were talking about technologies several years out. The take away I got from this was that Intel believes they have a relationship with IBM that will continue for at least the next several years and they really didn’t see an end date for the relationship.
This is a strong validation, because they were talking in front of financial analysts, and that audience requires you speak with authority and accuracy on anything going on today or in the future. So Intel was validating that they believed IBM was in this for the long haul and, with this audience, that is a powerful statement.
Wrapping Up: Fear Itself
So there are apparently no plans for IBM to move away from the x series, and even if they were, the company most likely to buy the group has proven to be reliable. The PC transition to Lenovo was nearly seamless, and that transition was far more difficult. So there is nothing to worry about, at least not here. I’m sure we all have better things to worry about than this. The IBM System x series isn’t going anyplace, and even if it was, you’d probably like it.