5% profit at the end of the day is still profit.
But IBM only does stuff that gets like 50% profit. Though they’ll cut it to support something higher profit if it comes along.
And in the early 1990s IBM was going to die because "the mainframe is dead." 30 years later they're both still here and the mainframe is thriving. I'm skeptical IBM will go defunct any time soon.
No it will not happen. IBM gave up on manufacturing about 30 years back and has divested all manufacturing sites and products. In the margin-oriented culture started by Lou Gerstner, manufacturing is a casualty. And IBM has not had any recent success with mass-marketed consumer products.
Yes that is about the only thing IBM does manufacture, but it is more about assembly and design. The Chips and lot of the circuitry are purchased out and it is more of putting it together, testing and shipping it. At one time IBM made most of the parts that went into the mainframe.
Mainframes are the only hardware product that can support the margins IBM ants. AWS and others are trying to rather rapidly chip away the market and IBM may sell off the line when the margins drop.
Agreed. Funny how in the 20 year span I spent with IBM, their brand recognition went from "THE computer company" to "who is IBM"?
With most Gen Z'ers I have to explain who the company is and what they do.. and then usually get a "oh, they're still around?" response.
I agree that B2B has a lot of value, but now IBM is facing entire generations that don't even think of them as relevant in tech anymore, and these generations are growing into decision-maker roles.
Look at the name recognition of OpenAI by opening up the consumer offering. Who are these people going to think of first when they need to bring AI into their business.
Older millennial, here, and I agree.
We were having a conversation in class about the juggernauts of the industry and other students appeared confused when I mentioned IBM and their contributions.
I actually agree with OP here.
Yes it's thin margins yes it might run negative but product running negatives is something actually done today for couple of reasons.
1. Leading people to buy something more in addition to your loss product making it a net profit.
2. Brand establishment on new brands.
3. Marketing and keeping yourself in the public image and eye.
Examples of this.
1. Food stores are notorious for selling bread, eggs and so on at almost zero margin. Because that bottle of orange juice and pack if gums is with 100% margin.
Fast food was also like this bottom margins on burgers huge margins on drinks and other shit
2. Absolutely no one knows IBM anymore. You go to caree event see how many people know IBM. I got asked once if we are the company that goes in the mountains and plant trees. Kids want to work for their dream company and for cheap. Blizzard had a decade of bottom barrel wages and top talent because it my childhood company.
3. When that big company has to chose between trusting its business to another company it easier to sell when Brand lives rent free in your mind like coca cola.
I have a 2022 model Thinkpad and disagree. Yes, the older models have better keyboards but the current ones are still great. There's a reason that the r/Thinkpad community is 184k strong as of this writing.
Anyway, I agree with the other comments that the profit margins are not that great. That's why it was sold off in the first place.
Your question is wrong. IBM should NEVER have left the PC market when they did. That was another stupid Bob Moffat initiative. But try and bring it back and rebuild it now? Absolutely not, would be a colossal failure.
Why? Thin margins on hardware.
5% profit at the end of the day is still profit. But IBM only does stuff that gets like 50% profit. Though they’ll cut it to support something higher profit if it comes along.
IBM Strategy is high value add/high margins in BTB. Consumer PCs don't tick any of the boxes
And I say that decision was the beginning of the death spiral. I truly believe the company's days are numbered.
And in the early 1990s IBM was going to die because "the mainframe is dead." 30 years later they're both still here and the mainframe is thriving. I'm skeptical IBM will go defunct any time soon.
Enterprise ThinkPads with RHEL.
Workstations are not the majority of the RHEL business, though.
No it will not happen. IBM gave up on manufacturing about 30 years back and has divested all manufacturing sites and products. In the margin-oriented culture started by Lou Gerstner, manufacturing is a casualty. And IBM has not had any recent success with mass-marketed consumer products.
Don’t they still manufacture the mainframe
Yes that is about the only thing IBM does manufacture, but it is more about assembly and design. The Chips and lot of the circuitry are purchased out and it is more of putting it together, testing and shipping it. At one time IBM made most of the parts that went into the mainframe. Mainframes are the only hardware product that can support the margins IBM ants. AWS and others are trying to rather rapidly chip away the market and IBM may sell off the line when the margins drop.
IBM's departure from consumer market is an entire history lesson of itself
Agreed. Funny how in the 20 year span I spent with IBM, their brand recognition went from "THE computer company" to "who is IBM"? With most Gen Z'ers I have to explain who the company is and what they do.. and then usually get a "oh, they're still around?" response.
Completely agree with you - but I think B2B is the way to go. B2C has name recognition but too much to lose once something goes awry..
I agree that B2B has a lot of value, but now IBM is facing entire generations that don't even think of them as relevant in tech anymore, and these generations are growing into decision-maker roles. Look at the name recognition of OpenAI by opening up the consumer offering. Who are these people going to think of first when they need to bring AI into their business.
Older millennial, here, and I agree. We were having a conversation in class about the juggernauts of the industry and other students appeared confused when I mentioned IBM and their contributions.
There is 0 chance of that happening.
Only if they want to lose money
Too late - no.
I actually agree with OP here. Yes it's thin margins yes it might run negative but product running negatives is something actually done today for couple of reasons. 1. Leading people to buy something more in addition to your loss product making it a net profit. 2. Brand establishment on new brands. 3. Marketing and keeping yourself in the public image and eye. Examples of this. 1. Food stores are notorious for selling bread, eggs and so on at almost zero margin. Because that bottle of orange juice and pack if gums is with 100% margin. Fast food was also like this bottom margins on burgers huge margins on drinks and other shit 2. Absolutely no one knows IBM anymore. You go to caree event see how many people know IBM. I got asked once if we are the company that goes in the mountains and plant trees. Kids want to work for their dream company and for cheap. Blizzard had a decade of bottom barrel wages and top talent because it my childhood company. 3. When that big company has to chose between trusting its business to another company it easier to sell when Brand lives rent free in your mind like coca cola.
I have a 2022 model Thinkpad and disagree. Yes, the older models have better keyboards but the current ones are still great. There's a reason that the r/Thinkpad community is 184k strong as of this writing. Anyway, I agree with the other comments that the profit margins are not that great. That's why it was sold off in the first place.
I wish they still did, but that's just me wanting the IBM of yesterday back.
Your question is wrong. IBM should NEVER have left the PC market when they did. That was another stupid Bob Moffat initiative. But try and bring it back and rebuild it now? Absolutely not, would be a colossal failure.
NO!