ms on the offensive again

[Colin McGregor]

"Francois Ouellette" <fouellet-cpI+UMyWUv9BDgjK7y7TUQ at public.gmane.org> on Saturday, May 21, 2005 5:27
PM wrote:

> > Colin McGregor wrote:
> >
> > Well, at the Linux World Canada Show an IBM rep. noted (as part of
keynote
> > speech) that IBM is focused on the BRICK nations (Brazil, Russia, India,
> > China, and (South) Korea). Point being, limited amount of old (computer)
> > infrastructure, fast growing economies, all ripe for Linux :-) . So,
that
> > means we are talking the 1st, 2nd, 5th, 8th, and 24th largest
> populations...
> > Not too shabby :-) .
>
> Not much money to make on the software but HUGE market for hardware, even
> with smal profit margin the potential is immense.

There are two other areas IBM is good at, consulting services and education.
Want to get 5,000 computers, in 50 locations, in 7 nations to talk to each
other in a VPN, well IBM would be one of the best picks to make that work.
Want to train the people who will be using those 5,000 computers, again IBM
would be an excellent pick.

> Funnily enough, IBM has pulled out of the PC market! I suppose they count
on
> their Power technology for servers with Linux.

IBM's departure from the PC market isn't very surprising, when you think
about it. PCs have become a commodity item, I mean how much of a premium are
you willing to pay for the IBM logo on the front of the case vs. a
comparable "white box" clone or a Dell? I would not pay anything extra, and
these days most folks would not pay much. So, this means that IBM must
descend into the same cut-throat high volume/paper thin margins area of the
white box clones and the Dell Computers. IBM has never done well in that
sort of area.

So, the server market, consulting services, education and licences of IBM
patents are all real money makers for IBM. Also, keep in mind that be
leaving the PC market IBM avoids the one area where Microsoft can @#$% IBM
badly (i.e. Microsoft can no longer use Windows as a club to limit IBM
getting into the Linux market...). In other words at the moment it looks
like IBM made a wise choice leaving the PC market.

Colin McGregor

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