IBM counters that it will continue to offer PCs to its customers through a marketing alliance with Lenovo. Some IBM customers say maintaining such continuity is crucial. "I'm not so concerned that IBM doesn't make the PCs, as long as they can ease our selection and procurement of the right systems," says Ken Andre, CIO at packaging company Greif Inc. Greif recently placed a major order with IBM for PCs and servers.
IBM officials are now squarely focused on more lucrative opportunities within the IT and business-services markets. The deal "strengthens IBM's ability to capture the highest-value opportunities in a rapidly changing information technology industry," IBM chairman and CEO Sam Palmisano said in a statement. Indeed, the terms of the deal reflect the reason Palmisano believes IBM is better served concentrating on its services unit and expanding its business-process-outsourcing offerings. At $1.75 billion, the sale price underscores the fact that IBM has individual outsourcing contracts that are worth more than its entire PC business.
Additionally, some observers say the sale is a less-drastic step for IBM than headlines would suggest. The company has a history of selling off commodity hardware lines threatened by margin erosion. It recently sold its hard-drive business to Hitachi and previously spun off its printer division to create Lexmark International Inc. Widely recognized as one of the leading pioneers in launching the desktop PC business (see our time line on IBM's PC business), IBM had nonetheless exited the consumer PC market in the late '90s and had previously outsourced most manufacturing of business computers.
This story was updated on Dec. 13.
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