https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2020 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2020 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Mergers and Acquisitions


Report: IBM Ends Chip Business Buyout Search, Seeks Partner

  • Written by DH Kass 1
  • February 10, 2014

IBM (IBM) reportedly has backpedaled from seeking a buyer for its semiconductor unit and instead decided to look for a joint-venture partner for the business, according to a Bloomberg report.

IBM (IBM) reportedly has backpedaled from seeking a buyer for its semiconductor unit and instead decided to look for a joint-venture partner for the business, according to a Bloomberg report.

Even though word surfaced only last week that IBM was looking to unload its chip-making business, the company quietly has been trying to sell it for several months, the report said.

IBM’s about-face may have been prompted by its difficulty to secure bids from interested parties and also on its insistence on retaining chip design capabilities and its storehouse of intellectual property related to the semiconductor business, the report noted.

The Financial Times reported last week that IBM was mulling putting its semiconductor unit up for sale, some two weeks after unloading its x86 server arm for $2.3 billion to Chinese PC giant Lenovo. The vendor reportedly had enlisted Goldman Sachs to find interested parties but no possible suitors have emerged to this point, and it’s unclear how much IBM might be asking for the business.

One problem inherent in finding a buyer is the fact that there are only a few companies worldwide that can absorb the billions in capital required and have the fortitude to withstand the unpredictable nature of the silicon business.

For IBM, selling its semiconductor unit would have cemented its path away from hardware reliance and signaled a strategic determination that its future resides in cloud services and software. A joint venture partnership softens that landing a bit. Furthermore, once the Lenovo x86 deal closes, IBM will be left only with mainframe and high-end server manufacturing based on its own chips, leaving it to rely heavily on sales to outside customers to make ends meet with the unit. With the cost to build new fabs spiking to the billions of dollars, IBM’s return on investment may never rise to where it needs to be for the vendor to continue making silicon. A partner lightens that load as well. 

In Q4 2013, IBM reported its seventh consecutive quarter of declining revenue and its eighth straight period of missing analysts’ sales expectations, posting a 3 percent year-over-year downturn in sales to $27.7 billion. The vendor did beat earnings projections for a third straight time, however, posting a 6 percent bump in net income to $6.2 billion and a 12 percent-per-share increase to $5.73 for the period.

It’s easy to find IBM’s impetus for moving away from its hardware-related businesses, considering its continued poor performance, losing $500 million for the year in its Systems and Technology unit while its software unit posted a 4 percent sales increase and its cloud revenue jumped 69 percent for the year to $4.4 billion.

In response to the company’s continued sales dips, chief executive Ginni Rometty and other top executives declined their annual incentive payments for the year. Rometty maintains the company is on target to achieve its target of $20 earnings per share in 2015, contending that it expects to deliver full year 2014 GAAP earnings of at least $17 per share and non-GAAP of at least $18 per share.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Mergers and Acquisitions Technologies

Related


  • office 365
    How to Improve First Call Resolution with Microsoft Office 365 Service Tickets
    Here are some tools and strategies for improving the rate of FCR with Office 365 service tickets.
  • Channel Partners Virtual Banner Header CF
    Don't Wait for Fall's 'Homecoming' Channel Event — CP Virtual 2021 Is Coming Soon
    Content for Channel Partners Virtual doesn't take a backseat to what you get at our live events.
  • View of globe from space
    Presidio Plans International Expansion with Arkphire Acquisition
    Arkphire rapidly expanded after acquiring Trilogy Technologies.
  • Money Bag
    Pax8 Follows Wirehive Acquisition with $96 Million in New Equity Capital
    The new funding will allow Pax8 to better support partners.

One comment

  1. Avatar Anonymous February 14, 2014 @ 5:27 pm
    Reply

    Why not partner with Fujitsu
    Why not partner with Fujitsu rather that Lenova for this next step, as they have the R/D culture similar to IBM.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Cybersecurity Top Priority Among IT Leaders, AI/Automation Not So Much
  • Netwrix-Stealthbits Merger Kicks Off 2021 Cybersecurity M&A
  • Microsoft Source Code Accessed by SolarWinds Hackers
  • Alteryx Chooses Palo Alto Networks Vet to Lead Go-to-Market Plan

Galleries

View all

New, Changing Partner Programs: AWS, Tech Data, Avaya, Verizon

January 11, 2021

Industry Perspectives

View all

Help Your Customers Mitigate Malware: Viruses, Worms, and Trojans…Oh My!

January 15, 2021

SMBs’ Cybersecurity Risk Awareness Is Rising

January 13, 2021

Your Cloud Data Is Protected, But Is It Portable?

January 12, 2021

Webinars

View all

Blueprint for a Scalable MSSP Practice in 2021

January 21, 2021

Who’s Behind the Mask? Hacker Personas Explained

January 26, 2021

How Managed Hosting Providers Thrive with the Alternative Cloud

February 24, 2021

White Papers

View all

Why Subscription Business Model

January 15, 2021

The Ultimate MSP Guide to Sales Efficiency

January 14, 2021

Eight Reasons Why MSPs Need IT Industry-Specific Sales Tools

January 14, 2021

Upcoming Events

View all

Channel Partners Virtual

March 2, 2021 - March 4, 2021

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

Videos and Fastchats

View all

FASTCHAT: How SOAR Eliminates Security Challenges and Elevates Service Provider Revenues

January 6, 2021

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

FASTCHAT: How Old, Unpatched Technologies Are Creating New Security Threats for MSPs and Their Customers

December 3, 2020

Twitter

ChannelFutures

.@IBMServices snaps up #MSP Taos for #hybridcloud expertise. dlvr.it/RqggQR https://t.co/Fy3uPDtLNw

January 16, 2021
ChannelFutures

.@LenovoBusiness launches its thinnest #ThinkPad to date @CES, revamped ThinkBooks and #ThinkReality glasses.… twitter.com/i/web/status/1…

January 16, 2021
ChannelFutures

Help your customers mitigate #malware @Tech_Data #cryptolocker #antivirus #ransomware #cybersecurity… twitter.com/i/web/status/1…

January 15, 2021
ChannelFutures

Advantages of the Subscription business model for MSPs and IT Resellers @kaspersky dlvr.it/RqgDJn https://t.co/ay694fudp3

January 15, 2021
ChannelFutures

Cloud #distributor @Pax8 launches in UK with leadership team in place. dlvr.it/RqfJWx https://t.co/RsKDCowM5V

January 15, 2021
ChannelFutures

bit.ly/3oO2vFY twitter.com/Craig_Galbrait…

January 15, 2021
ChannelFutures

The Ultimate MSP Guide to Sales Efficiency @zomentum dlvr.it/Rqc63q https://t.co/rHIVLkR01K

January 15, 2021
ChannelFutures

Eight Reasons Why MSPs Need IT Industry-Specific Sales Tools dlvr.it/Rqc62k https://t.co/MQDcIYc7G9

January 15, 2021

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X