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back to article Servers take dive in IBM's third quarter

When IBM pre-announced its revenues and earnings as the market was swooning two weeks ago, in an effort to calm a staggering and falling Wall Street, the company's overall numbers gave the impression that Big Blue was weathering the financial storm. While this may be true in the aggregate, to IBM's, er, credit as an IT supplier …

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  1. Anonymous Coward
    Anonymous Coward

    So we are all hoping IBM goes under

    less competition :)

    Or at least competition on a more equal footing.

    That is what I think a lot of the corps peeps don't realise, a lot want them to fail.

    No one is in the stock market at the mo, and so we will be seeing a load of mergers happen soon as the bigger fish eat the smaller big fish. These new mega corps, well won't be as mega perhaps as they were. Mergers tend to mean redundancies sometimes to a smaller size overall then the buying company was before the merger; some people have jobs because the competition exists.

    The big service companies never appeal to the SMEs, for the simple reason their software solutions are too cumbersome, designed to be used in large scale operations (and then not particularly well, but more for the benefit of the service provider).

    I suppose I don't think this recession will be like the ones before. There is lots of money around, and people don't know where to put it (mattress anyone?). Eventually people will realise you have to get involved in SMEs either start ups or invest in ongoing, I am kinda looking forward to it all.

    You can make far more money investing early in a small business then you can on the markets, and smaller outfits tend to get the people mix right, sure some fail but hey, the ones that succeed get to be the new corps in a decades time, it is a great big cycle.

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  2. Peter Gathercole Silver badge
    Unhappy

    @AC - WTF?

    In case you had not noticed, consolidation in the services and hardware business has been going on for the last 30 years. Ever wondered where Tandem, Compaq, Digital Equipment Corp., Pyramid, Data General, ICL, Amdahl, Sequent, Nixdorf, NCR, Honeywell, MIPS (I could go on, the hardware market only really has three or four major players in the non-PC space). All of these have been subsumed by larger companies.

    If you think that this has made it easier for startups, then you have a distorted view of the hardware market. Study what has happened to Transmeta or Inmos, who were new companies built around innovative products.

    What now happens is that a good startup produces a good product, fails to get capitalized to exploit the product properly, and promptly gets bought by the larger players.

    Just wait for IBM, AT&T, and Microsoft to start stifling new startups by leveraging their patent portfolio. It will be nearly impossible for innovators to even get started.

    All that the financial mayhem will do is shake the market out even more.

    The same will happen in the software market. Just how many companies have been bought by Microsoft, Oracle, IBM, SAGE, Computer Associates (spit), Google, Symantec et. al. because they are competitors or have products that are genuinely new.

    I agree that nobody is producing good software for SMEs at the moment, but that will not change, it will just get more difficult to start. There are just too few people prepared to venture money at the moment.

    I will state an interest here. I have been an IBMer for seven years (although I missed the blue blood transfusion - I kept to my UNIX roots), and currently get a lot of my work on IBM kit. IBM are not perfect, their software is patchy, rushed to market, and the quality has gone down in recent years, but you are not going to get government agencies, Blue chip companies or major utilities buying software from a startup. Their buying policy will not allow purchases unless companies have a history and a good credit rating. Sad, but true.

    All that rationalization will do is to remove choice that will not been replaced. Besides, IBM is reporting GOOD figures (growth is growth), and is extremely unlikely to go under, as they are not exposed to the credit market, being cash rich! Far more likely is that Sun will go. IBM or Microsoft could buy Sun out with the change in their pockets, especially if their stock crashes.

    I would hate the hardware market to be IBM, HP and the PC manufacturers. We need competition, and currently only large players can compete.

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