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back to article NO WONDER Big Blue dropped it: IBM server biz BOMBED in Q4

There's little wonder that IBM execs were so quick to snap up Lenovo's $2.3bn offer for the sickly volume server biz. Factory revenues and shipments apparently crashed during Big Blue's last full quarter behind the wheel. Ending a thoroughly unpleasant 2013 for Big Blue server peeps, Gartner calendar Q4 numbers show revenues …

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Headmaster

Bad headline

Made me think that everyone and his dog were buying servers in Q4 (except me, of course). I think it should have said "slumped", "popped", "flopped" or some other "diminish" related term. Exploded, to me at least, means "to get larger very quickly".

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Re: Bad headline

agreed...subbing as its worst.

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Anonymous Coward

Re: Bad headline

Yes, and it is no wonder that it slumped in Q4 as the rumors were everywhere that IBM would be selling a portion of the server line to Lenovo. That is bound to have an impact on sales when everyone is waiting for the announcement.

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Silver badge

How about

imploded

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Silver badge

Re: How about

Yes. I was about to moan about the use of the word 'exploded' to mean 'collapsed' but discovered you got there first. Is the metaphorical use of the word 'explode' going to be grossly misused by fools? We shall not let it!

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Bronze badge

One could say that the red ink exploded all over the balance sheet but that would be like clutching quill pens.

This is more like a strange Americanism changing the meaning of words as normal even if it is wrong.

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Silver badge

A flood of red ink tends to evoke the metaphor "bleeding money" instead.

I agree that "IMPLODED" is a better term, although by the time I type this they've settled on "BOMBED" which evokes a similar image.

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Blame it on America

I know it is fashionable to blame one's problems on America (USA to be precise), but the author is British. Blaming an inappropriate headline on the USA is rather seemly.

Your comments are a stereotype of the ugly Brit, which I don't think most appreciate very much.

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Coat

And you are probably British and perhaps unaware of how your command of the English language has exploded. I can feel your pain but I cannot help much. I am sorry. Still there are other questions of interest, the more international we become the better, the more borders we open the better, the more we feel we live on the same planet the better. Money has no boarders but still i bothers me when big companies like IBM are so quick to sell out because of a slight "explode". Das Kapital will understand and enjoy, but should an American company give up so easily, without a fight. More capital for some but what about the country. A difficult question. and this is by no means only a American question.

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Anonymous Coward

"And you are probably British and perhaps unaware of how your command of the English language has exploded"

American isn't proper English. Americans gave up speaking English in 1783.

"Money has no boarders"

QED.

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"American isn't proper English. Americans gave up speaking English in 1783."

As I read somewhere around here, "American" (and Austrailian) are closer to "English" of 1783 than the current England-English is. It wasn't until the diction-craze of the late 1800s in England that Brits became pompous twats. :)

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Re:

Well put!

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Anonymous Coward

"As I read somewhere around here, "American" (and Austrailian) are closer to "English" of 1783 than the current England-English is"

Yes - they stuck with dated speech from pre-industrial revolution times (and added lots of spelling mistakes), whilst the English speaking world moved on...

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Facepalm

Ouch!

The "first time" price which IBM passed on was rumoured to be between $3bn and $5bn, so say $4bn as a nice median figure. So that means the IBM board's decision to pass was equivalent to taking a $1.7bn hit over two quarters. Ouch! I bet the shareholders won't be pleased even if the IBM board do sell off more family silver to try and boost the shareprice.

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Headmaster

I do not think that Lenovo are fools.

Let us just see what they do with this purchase before we start to amuse ourselves at their expense, hmm?.

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Linux

Re: I do not think that Lenovo are fools.

Lenovo is slowly just becoming IBM.

I always saw the first sale to Lenovo as problematic because it eliminated an entry point for IBM customers. Previously you had an IBM that was a "one stop shop" for everything. Getting rid of the first part of their PC biz subverted that.

Now Lenovo is slowly coming that, minus the fancy trademark.

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Devil

I don't know how reliable the numbers are. Could be IBM used some creative accounting to put some of the incoming bad stuff on the recently-sold division, so that the other divisions as well as future quarters will look better.

Nah... I'm sure Big Blue would never do anything so shady.

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"For the year, worldwide revenues declined 4.5 per cent to $50.1bn as shipments grew 2.1 per cent to 9.8m units" hum hum

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Contributing Factor

Some customers may have been holding off on purchases, waiting for Intel to come out with their latest and greatest Xeon CPUs.

If this was the case, Calendar Year 2014 Q1 sales should be up.

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Holmes

Of course they bombed, who would continue buying IBM after they nearly sold them off the first time.

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Anonymous Coward

Snowden'd in Q4

"Some customers may have been holding off on [IBM/US server] purchases, waiting for Intel to come out with their latest and greatest.." on-chip really random number generator ?

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Anonymous Coward

Just wait

IBM's storage division figures show a similar trend I guess. Our account manager left to go work for a competitor (hence he didn't get to say goodbye).

Lost cost, open, "just good enough" is what people seem to want from hardware - the margins must be getting tight.

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Anonymous Coward

Selling hardware is a fool's job (read HP and Dell). Who cares about low profit margin hardware anyway? IBM should have left hardware to the likes of HP years ago. Hardware vendors have about 5% profit margin - pathetic and no way to run a successful business. IBM should dump as much hardware as fast as it can and continue to buy mobile, cloud and big data companies.

By the way if you are a hardware guy you should realize that your days of buying hardware for your company are numbered. Why employ hardware guys while there are cheaper cloud based solutions out there? Move to the cloud and outsource you entire IT department. That is how you boost profits.

Hardware in the US is dead but a lot of people don't realize it.

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Ah a cloud guru... and what do you need to run all that cloud biz on? Well? Yes of course..hardware.

And as you need to offer a certain SLA, you will need more hardware : geographically clustered datacenters etc... Also the laws of a lot of countries require data to remain in-country..meaning you need local datacenters.. so even more hardware... and who do you think supplies that hardware to power the cloud..well, yes HP & Dell ... And BTW who do you think supplies & develops most of the infrstructure & management software to provide those cloud services ? Yup, HP.... Dell....IBM....etc....

And a last one : don't ever think cloud is cheap. In Europe we are now starting to see the inverse trend : companies that switched to cloud based stuff, moving workloads back onto their own infrastructure (and then they call it a private cloud..) ..all of this purely driven by cost... as they start to find out that cloud is bloody expensive (just look at the cost of a simple 10TB enterprise backup service, and also read the fine print in the SLA .... )

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Anonymous Coward

Hardware

"and what do you need to run all that cloud biz on? Well? Yes of course..hardware"

Yes, but not hardware from IBM, HP, Dell et. al. Just ask Amazon, Facebook, Google...

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Remember kids

We live in an age where companies seem to think

Its better to make "No money" than "Some money"

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