IBMs PC Unit Retreat Is Good Business

By Jim Louderback  |  Posted 2004-12-03 Print this article Print

Opinion: With its focus on services, Big Blue no longer belongs in manufacturing. Next question is who will buy the division: a competitor or a reseller?

The big news in Fridays announcement that IBM is selling its PC business is the fact that it is still in the business at all. Lets face it. Except for its highly regarded ThinkPads, IBM hasnt been a player in the computer industry since the ill-fated decision to adopt a proprietary Micro Channel bus back in 1987. Couple that with its failed attempt to leverage OS/2 into the desktop OS champ—a quixotic quest that ended in the late nineties—and its obvious that IBM failed a long time ago. Around the time that its desktop efforts were failing, IBM shed two other non-strategic assets—keyboards and printers. Thats how we ended up with Lexmark—and despite the fact that the company no longer makes my favorite buckling-spring computer keyboard, it still manages to pump out some pretty capable printers.
The last time I checked, Lexmark was making four bucks a share and was worth over $11 billion. Not bad for a "non-strategic asset."
News that IBM is selling its PC business comes as no surprise to David Coursey. Read his Weblog here. No, this isnt a big deal for IBM. The company long ago started focusing on services, not boxes, because thats where it thinks the money is. Despite those advanced labs in San Jose, Poughkeepsie and elsewhere, IBM isnt really a computer company anymore; its a consulting company. IBM spent the last few years commoditizing everything below middleware, including the OS and the PC. That explains the fascination with Linux. A commoditized and free OS not only makes Microsofts key market position obsolete, it also makes the PC itself simply an off-the-shelf component. The consultants at the core of IBM have been recommending non-IBM hardware for years—Fridays announcement just puts the final stamp of legitimacy on something thats been going on for a while. Next Page: A "painful and costly" road.

With more than 20 years experience in consulting, technology, computers and media, Jim Louderback has pioneered many significant new innovations.

While building computer systems for Fortune 100 companies in the '80s, Jim developed innovative client-server computing models, implementing some of the first successful LAN-based client-server systems. He also created a highly successful iterative development methodology uniquely suited to this new systems architecture.

As Lab Director at PC Week, Jim developed and refined the product review as an essential news story. He expanded the lab to California, and created significant competitive advantage for the leading IT weekly.

When he became editor-in-chief of Windows Sources in 1995, he inherited a magazine teetering on the brink of failure. In six short months, he turned the publication into a money-maker, by refocusing it entirely on the new Windows 95. Newsstand sales tripled, and his magazine won industry awards for excellence of design and content.

In 1997, Jim launched TechTV's content, creating and nurturing a highly successful mix of help, product information, news and entertainment. He appeared in numerous segments on the network, and hosted the enormously popular Fresh Gear show for three years.

In 1999, he developed the 'Best of CES' awards program in partnership with CEA, the parent company of the CES trade show. This innovative program, where new products were judged directly on the trade show floor, was a resounding success, and continues today.

In 2000, Jim began developing, a daily, live, 8 hour TechTV news program called TechLive. Called 'the CNBC of Technology,' TechLive delivered a daily day-long dose of market news, product information, technology reporting and CEO interviews. After its highly successful launch in April of 2001, Jim managed the entire organization, along with setting editorial direction for the balance of TechTV.

In the summer or 2002, Jim joined Ziff Davis Media to be Editor-In-Chief and Vice President of Media Properties, including, Microsoft Watch, and the websites for PC Magazine, eWeek and ZDM's gaming publications.


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