And herein lies a big chunk of the problem for IBM's hardware group and the rest of IBM after that group goes away. When there is a bid involving software and/or services together with servers, the servers get cut to the bone or sold at a loss to advance the welfare of software and services. This is due to a partially self-fulfilling prophecy that being in the hardware business is low margin and therefore should be screwed over to make room for the more successful parts of IBM. Part of IBM's hardware failings is because they make it fail because they think it is failing. Keeping in mind IBM continually wants to do this and executives force STG to take the hit for the sake of SWG and GTS, what happens when STG products are no longer under the same executive umbrella? Those suicidal discounts won't happen anymore because the external vendor doesn't answer to some executives that want to see IBM succeed at all costs.
I would guess their logic is that customers in the segments they divest don't actually care about the hardware, and if they do really want Thinkpads or IBM x86 hardware, they can pay a little more to get it from Lenovo. Hard to believe with Thinkpads being gone, but the strategy seems to be to keep the hardware that customers demand to the extent they're willing to pay.
Deal to lenovo is done:
Research Triangle Park, North Carolina, and Armonk, New York - 23 Jan 2014: Lenovo (HKSE: 992) (ADR: LNVGY) and IBM (NYSE: IBM) have entered into a definitive agreement in which Lenovo plans to acquire IBM’s x86 server business. This includes System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. The purchase price is approximately US$2.3 billion, approximately two billion of which will be paid in cash and the balance in Lenovo stock. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.
$2.3billion isn't much. Sheesh.