IBM "sells" its semiconductor bussiness. In other news, flying pigs were spotted

[daqq]

So, IBM "sold" its semiconductor division...

http://arstechnica.com/information-technology/2014/10/struggling-ibm-pays-1-5-billion-to-dump-its-chipmaking-business/

I wonder what do they actually want to live off, having previously removed the desktop/notebook stuff as well as other stuff. Honestly, I'm disappointed - IBM seems to be going from an industry leader to a glorified software and service company for "big data" who'll outsource all the good stuff whilst trying to appease the investors through the miracle of numbers... At least that's how I see it 

[Kjelt]

Look at which companies have been the rising stars the last decade and see that they don't make and sell hw only sw and services. Don't blame the companies blame society

[KJDS]

The big problem with making semis is that a new wafer fab is several $B and is out of date in three years. That's fine if you're churning out lots of high end processors or RAM, but it's jsut not feasible to stay up there without big volumes.

Look at which companies have been the rising stars the last decade and see that they don't make and sell hw only sw and services. Don't blame the companies blame society

If only Apple followed this path, they'd stop patenting rounded corners.

[tom66]

We shouldn't be afraid to see big companies die or split off. If businesses cannot adapt to the market place they have no place in the market. I just feel sorry for the inevitable lay-offs when IBM does go defunct.

[VintageTekFan]

IBM has been laying off lots of people for a long time...  And that only seems to barely keep them going.

[LabSpokane]

IBM should have gotten out of the toaster oven business long ago. It's actually a smart business move on their part.

[dannyf]

appease the investors through the miracle of numbers

As a society, we have gone from a country of makers to a country of BSers. Don't blame the IBMs of the world. Blame the culture, blame the people, blame all those environmental regulations and pensions, etc.

Blame ourselves.

[c4757p]

As a society, we have gone from a country of makers to a country of BSers. Don't blame the IBMs of the world. Blame the culture, blame the people, blame all those environmental regulations and pensions, etc.

Environmental regulations?

Yes, it's our fault IBM is failing and we're turning into a country of BSers, because we wouldn't let the poor makers shit all over their own (and our) environment.

[EEVblog]

For those interested in IBM, read this: http://www.anysubject.com/the-decline-and-fall-of-ibm-by-robert-cringely

[coppice]

appease the investors through the miracle of numbers

As a society, we have gone from a country of makers to a country of BSers. Don't blame the IBMs of the world. Blame the culture, blame the people, blame all those environmental regulations and pensions, etc.

Blame ourselves.

Of course I agree that the last thing any reasonable person needs is clean air to breath and food when they are too old to work. However, I think I see a flaw in your argument. IBM moved all its high labour cost stuff to cheap labour countries years ago.

[Bud]

IBM was a supplier for the company I used to work for. It was incredibly hard to get anything out of them, they were slow, unresponsive and their service quality sucked. I was involved in several enterprise scale projects with them so I know first hand. I guess there were other reasons which I was not aware of why my employer paid them big buck.

[coppice]

IBM was a supplier for the company I used to work for. It was incredibly hard to get anything out of them, they were slow, unresponsive and their service quality sucked. I was involved in several enterprise scale projects with them so I know first hand. I guess there were other reasons which I was not aware of why my employer paid them big buck.

IBM has a long history of spending a huge amount on basic research, and building whole new industries on the results of that research. It looks like they skipped the research step when they decided to become a pure services company. They don't seem to have figured out how to do it well, or do it in a sustainable way. On a more positive note, I guess they trained a huge number of people who now operate more focussed services businesses.

[miguelvp]

IBM has been laying off lots of people for a long time...  And that only seems to barely keep them going.

It used to be that in the industry we referred to IBM as "I've Been Moved". They were well known for never firing people, they would just offer you a relocation that you wouldn't take. But that was many decades ago, they also were infamous for telling you what friends you should keep, it was the essence of corporate America where every employee represented the company so you better be on your best behavior. I do believe they had a dress code as well.

But I never worked for them so it's all hear say, the reason I never even attempted to apply there was because of the rumor mill to begin with.

[coppice]

I do believe they had a dress code as well.

But I never worked for them so it's all hear say, the reason I never even attempted to apply there was because of the rumor mill to begin with.

You don't have to work for them to know about the dress code. Where do you think the nickname "Big Blue" came from?

[miguelvp]

It's been a while, I long forgot about it

Edit: last time I met people from IBM they wore jeans, this was at Solana TX at DFW, they had a big campus there at one time the whole Solana was IBM.

[VK3DRB]

Read the 2014 book The Fall and Decline of IBM http://www.amazon.com.au/The-Decline-Fall-IBM-American-ebook/dp/B00KRHWZ22. The eBook cost me about $3 or $4 and it was worth every cent. It is a shocking read, but gives an insight into an iconic company that has lost the plot and is headed for self destruction.

I know a lot about the company. I worked for them for 19 years. The early years were exceptionally good until Louis B. Gerstner came along. IBM sold our electronics plant off to another company. "You either join the new company or you will be deemed to have resigned from IBM in which case there will be no redundancy" were the exact words verbatim of Australian CEO Robert Savage. As IBM pushed us out, I was recognised for my 19 years of dedication with an offer of 30% discount off retail price on an IBM Aptiva PC, and as it turned out the confiscation of a large chunk of my superannuation. That was mean, very mean, especially considering I was part of a core team of about 10 people in the US who engineered the recovery of about $US 100 million to IBM in one year just a year earlier. I guess it takes penny pinching to a new level.

I learnt a big lesson from the leadership at IBM... Look after number one because no-one else will.

[eurofox]

I was involved in IBM's industrial activities, I think very few people know that IBM got main frame computers with I/0's managing refinery processes.
I got colleagues from IBM involved in the space projects (Space shuttle program)

It is sad that such a company that is on the origin of so many inventions is getting in this situation but the world is changing very quickly ..... 

[Kjelt]

On the other hand they are hiring personell by the thousands at the moment, unfortunately in China 

[JoeO]

I started at IBM in 74 and retired in 09, 35 years to the day.  I saw IBM go from the pinnacle of success to the pits. 

It started to decline when they looked at people as a resource, instead of human beings. 

VK3DRB is correct.  The downhill spiral started when Gerstner came to power.

[Kevman]

Supposedly the only thing keeping their fabs busy were the Wii, PS3 and Xbox 360- which is funny if you think about it.

Now that those are gone (though the Wii U still uses an IBM CPU), what production volume do they have left? Certainly not enough to justify the massive fixed costs associated with the industry...

I just didn't think they were in bad enough shape to have to PAY a company $1.5B to take the division.

You know, I wonder how much they've earned off the video game industry over the years...

[miguelvp]

Supposedly the only thing keeping their fabs busy were the Wii, PS3 and Xbox 360- which is funny if you think about it.

Now that those are gone (though the Wii U still uses an IBM CPU), what production volume do they have left? Certainly not enough to justify the massive fixed costs associated with the industry...

I just didn't think they were in bad enough shape to have to PAY a company $1.5B to take the division.

You know, I wonder how much they've earned off the video game industry over the years...

Not much, 300 million units over many years:
http://www.vgchartz.com/analysis/platform_totals/

Edit: Then again, I don't know how much those companies paid for those PowerPC chips, if $100 each, then it's $30B

[dannyf]

You know, I wonder how much they've earned off the video game industry over the years...

Obviously, not enough to keep them in business,

In the fab business, you need to have lots of capital (to invest in the fab and to sustain environmental liabilities), and lots of volume (so you can spread the capex and overhead).

If you look at the successful chip makers, they are either gorillas, or fab-less (mostly in the US), or in locales where environmental protection is light (the Taiwanese). The rest are specialty fabs (Jazz for example).

The situation is slightly better for analog chip makers where the need to keep up with advancing technology (thus repeated capex) isn't as much.

Most of US chip makers have divested their fabs: AMD, HP/Agilent, Rockwell, ..... Intel is the largest (sole?) exception, owing, I think, to their near monopolistic market positions.

[KJDS]

Supposedly the only thing keeping their fabs busy were the Wii, PS3 and Xbox 360- which is funny if you think about it.

Now that those are gone (though the Wii U still uses an IBM CPU), what production volume do they have left? Certainly not enough to justify the massive fixed costs associated with the industry...

I just didn't think they were in bad enough shape to have to PAY a company $1.5B to take the division.

You know, I wonder how much they've earned off the video game industry over the years...

Not much, 300 million units over many years:
http://www.vgchartz.com/analysis/platform_totals/

Edit: Then again, I don't know how much those companies paid for those PowerPC chips, if $100 each, then it's $30B

I suspect they are getting much less than $100 per chip, but even so if that's over ten years it's £3bn a year. with 10% of that put aside to pay for the next fab, it means they can only upgrade once every ten years, but they need to upgrade every two or three years.

[Stonent]

It's been a while, I long forgot about it

Edit: last time I met people from IBM they wore jeans, this was at Solana TX at DFW, they had a big campus there at one time the whole Solana was IBM.

Ha! I've been there. One of my former employers had a datacenter in the building with IBM. They also had a lot of IBM staff that consulted full time with them.