Great news for folks in Singapore
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Originally posted here -- @Yy2agk3
IBM is a dying company. No revenue growth, it has to keep in selling things right and left to make ends meet.
Please do not take this any other way except for looking at facts. To the folks in Singapore I wish you well and hope you are able to find employment quickly. 1st Q results show .9 billion in HW sales, and .4 billion in OS sales. My question and most likely the CFO’s question would be “how many manufacturing plants do I need for .9 billion in HW sales”. My guess is one each (Z, Power, and Storage). If you combine Z with high end power, you most likely can dump everything else. The CFO during the analyst call quite strongly implied “high margin” items are in IBM’s strategic go to market plan (where IBM chooses to play) and low margin items will be phased out (sold off, withdrawn, or OEM’ed). It sure appears to me like IBM’s plan is to have one plant (I would speculate POK) and everything else goes. High end Z and Power are still quite profitable (think 80%) so SCON’ing them brings a lot of synergies. Low end products can easily be OEM’ed for the IP and OS revenue. (Note it most likely will be a USA based or aligned manufacturer). Storage has become a commodity and we tend to sell our commodity HW to Lenovo. Why would Lenovo take Storage. There is still a profit in it due to Lenovo’s low cost manufacturing employees, and IBM’s willingness to help with development costs via their Labs. Look for a GF type of deal, with IBM offering Lenovo a 10 year guarantee for purchasing storage products for their cloud and “as a service” storage operations. (On and off prem). IBM has seen the future, and recouping stranded development costs via IP, licensing OS’s, and dumping under utilized manufacturing space is part of it.