Some thoughts on selling the "network business". First, I think this
is a mistake. That said, I believe IBM views this as having their
"cake and eating it". What they will do is sell off the
communications infrastructure to a telecom per what we have seen in
the announcement. The deal will allow IBM an "OEM" type arrangement
where for a discount IBM can bundle the communications piece into
large enterprise bids. So in effect IBM sells the telecom's network
as part of the overall IBM proposal. So they get access to the
network, at a discount, and still maintain a "one vendor" solution to
the customer enterprise. The sale also generates a few billion to use
somewhere else. Key point is now they are no longer a competitor to
the telecom industry, one of IBM's biggest industry customer sets.
IBM has always been uncomfortable competing against its biggest
customers. With a sale it gets everything: a more favorable
relationship with the telecoms, a few billion, the ability to sell the
service at a discount making profit on the markup, and the additional
dollars to reinvest in core businesses. As I said a few weeks back,
I would like to see IBM get the ownership of Java and its intellectual
property rights (patents, copyrights, etc.). I think Java is one of
the most important intellectual properties of the 21st century. Like
MVS is to mainframes. It is key to bracketing Microsoft and releasing
end users from the Wintel monopoly. |
