back to article IBM trudges onward despite hardware weight around its neck

IBM reported fourth-quarter earnings that were a mixed bag on Tuesday, with hardware remaining the chief thorn in Big Blue's side – as has been the case throughout its fiscal 2013. Total revenues shrank for both the quarter and the year, with Q4 sales down 5.5 per cent to $27.7bn and annual sales down 4.6 per cent to $99.8bn. …


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  1. Anonymous Coward
    Anonymous Coward

    Lessons in how not to sell part of a business

    1) only have 1 interested party

    2) set the price too high

    3) all goes tits up and leaks to press

    4) sulk around whilst the competition love it

    5) successfully restart efforts to sell some servers (moral improves)

    6) find more interested parties secretly

    7) leak again!

    8) competition love it (again)

    9) blame hardware for not pulling its weight!

    10) sell off at any price.....

    2013 was not the best because of this botched, drawn out, on/off situation. To blame the hardware teams for a leadership failure is harsh (but what else can they do given the can't admit to anything)

  2. localzuk

    Failing to understand SME

    IBM don't seem to have a good reseller network. I have worked in a business buying servers for 8 years now, and in that time not a single reseller has suggested an IBM server to us. It is always HP or Dell, with the occasional Acer thrown in to keep is laughing.

    If IBM wants to improve its server and storage business, they really need to step up their game making their kit attractive to the SME market.

  3. Anonymous Coward
    Anonymous Coward

    IBM needs to get out of commodity. There's no money in it, and IBM doesn't do things well, on the cheap. x86 is a good place to start getting rid of commodity. Let HP and Dell fight it out in the x86 market with the Chinese whitebox guys - the winners won't be names you recognise unless you hail from Asia - there's no way to compete against the people who contract manufacture your kit for you in the first place. Power should go legacy, like system Z and high end disk, kept on but at a slower pace of development, and with higher margins, used by customers who really need them.

    If the x86 servers are sold off, a minority investment in Lenovo (5%? 10%?) and a medium to long term agreement over the availability of those servers for IBM to use and sell would be unsurprising. It's not without precedent: the same things happened 10 years ago with the Thinkpads and desktop line.

    On the EPS front, 2013's EPS gains were depressed by "workforce rebalancing" (redundancies).

    A non-GAAP version of the number with the cost of the redundancies deleted was also in the release - a cent under $17. If $18 is the 2014 target, hitting that without another "rebalancing" cost won't be impossible by any means.

    (From the release: )

    Full-Year 2013:

    o Diluted EPS:

    - GAAP: $14.94, up 4 percent;

    - Operating (non-GAAP): $16.28, up 7 percent;

    - Operating (non-GAAP) excluding second-quarter workforce rebalancing charges, $16.99;

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