29 Sep Ballmer criticizes I.B.M.’s high-profit diet
Here’s an unusual characterization of I.B.M.: a shrinking violet among technology giants.
That’s Steve Ballmer’s take. During an interview last week, Mr. Ballmer, Microsoft’s chief executive, was critical of I.B.M.’s decisions over the last decade to dispose of its networking equipment, hard disk and PC businesses. Technology companies must pursue constant market expansion and diversity to stay alive and relevant, according to Mr. Ballmer.
“I.B.M. is the company that is notable for going the other direction,” he said. “I.B.M.’s footprint is more narrow today than it was when I started. I am not sure that has been to the long-term benefit of their shareholders.”
I.B.M. sold off its networking business in 1999 and then steadily exited lower-margin hardware businesses throughout this decade. I.B.M. has argued that it makes more sense to concentrate on higher-profit businesses and leave the grunt work to other guys, namely Hewlett-Packard. Today, I.B.M. directs most of its energy toward software and services and continues to sell higher-margin hardware like Unix servers and mainframes.
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