Just got off the webcast.
The deal is for Dell to buy IBM technology for integration into Dell designed products. The initial thrust will be storage. Part of the reason for the agreement is that Dell is moving into the enterprise where IBM products exist now, and customers want Dell to integrate their products with IBM products. Having IBMs cooperation, patent licensing etc. makes this much easier. In return for this cooperation, IBM gets Dells great marketing machine to sell their technology (disk drives, flat panel displays, integrated circuits, including copper and silicon on insulator). The last item might give investors in Intel something to think about, although they claimed on the call that Intel should not be worried. I don't think IBM has the rights to produce the Merced chip, and Intel will license the IBM process technology, so they may be winners as well. The deal does not include anything about IBM service and support, but they did not rule it out either. My feeling is Dell may be better off not using IBM service as it could turn out to be a Trojan horse if they did. Dell must not do anything to break their direct relationship with the customer. This deal appears to be a recognition by IBM that Dell can sell IBM technology better than IBM can, or at least that Dell can provide incremental business that IBM cannot get by themselves. It is a great credit to IBM management that they are able to do this without having to split IBM up into separate companies. For Dell it means they get the benefit of three of the greatest R&D organizations in the world, Intel, Microsoft, and now IBM working for them with no up front investment.
Ken |
