I have a friend from VMware who is worried that IBM might buy them. It doesn’t sound realistic to me, nor do I see any strategically good reason for something like that, but maybe someone thinks it could actually happen?
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Another viable company for The Borg (IBM) to assimilate (bluewash) and destroy!
There is no way IBM Power has a market cap of 100 billion More like 10 billion max, with it being most likely less. Power does approx 1.5 billion is sales per year where 30% of those sales go into storage and mainframe. Remember Power has been shrinking at a 25% rate year over year for the last 3-4 years. IBM has completely mismanaged Power till now it’s only salvageable as a replacement marketplace. (Very much like televisions) LINUX is a disaster (No ISV’s), and AIX and OS/400 ISV’s continue to migrate away at an ever increasing pace. The last hope for Power would be in a consumable cloud, but the brand has zero idea how to make that a value proposition to their existing install base. THUS Power will continue to fade.
@3stg+19UptvgV "Ridiculous rumor , VMWare might buy Power/Storage maybe"
You're right, that is a ridiculous rumor.
Nobody is going to buy Power. It is the last standing "proprietary" processor architecture, a hangover from a business strategy created in the 1980s, and ill-suited to the modern world. It's also a niche market with no cloud future. Plus, I hear that Power 10 is kind of a mess - it feels like everybody knows that 10 is the last of Power, and they are just going through the motions. It would not shock me entirely if 10 never makes it to market (or does so only in a minimal "last stop for existing customers" kind of way.
There are bits of Storage that somebody might buy, but not VMWare. That would put them directly into competition with Dell/EMC, and that's not going to happen.
I will post separately on what I think will happen to storage
Power has $100B total market cap. My bet is on DELL buying the remaining OldCo (~$50B). They probably will keep the mainframe z business and RH, and spit out the rest of junk.
Power has $100B total market cap. My bet is on DELL buying the remaining OldCo (~$50B). They probably will keep the mainframe z business and RH, and spit out the rest of junk.
Ridiculous rumor , VMWare might buy Power/Storage maybe. The sooner we cut GTS or GBS loose the better sick and tired of all the traitors with no spine collaborating with the enemy helping migrate off our Systems to help VMWare of other competitors.
IBM bought a company years ago to that "competes" with VMware to a degree. So not sure why they would want VMware. https://www.ibm.com/us-en/marketplace/wave-for-zvm
It was a pretty cool product if I remember correctly.. had some issues.. but cool..
Google’s investment in just the USA is pretty staggering IBM that whoosh you hear is Google lapping you. It’s hard to catch up, when this kind of investment is being made
https://finance.yahoo.com/video/google-spend-7-billion-add-123804119.html
Only as a merger. It's too big to outright buy
It would be a very long stretch for IBM VMW = 62 billion market cap with 425 million shares outstanding. Earnings are approx 4.80 per share. Even if you did a stock swap at 2 for 1, it’s 1/2 of IBM’s outstanding value. I can’t see the board saddling IBM with that kind of debt. Also AK and the CFO did say no major purchases during the next 2 year restructuring. Take that last statement with a grain of salt as these are the same guys rewarding “failure” via bonuses for past executive decisions. Tick tick tick AK Every day you don’t act, is another day Amazon et al extend their lead
Buying VMware would only make sense if IBM is willing to admit that OpenShift has failed. We are a long way away from IBM being ready to say that.
No chance. See the post in this forum from Deep Throat a couple months ago. IBM doesn't even have the cash on hand and free cash flow to service the current debt (largely RH acquisition), pay the dividend, and maintain the R+D investment. Those add up to over $20B a year. Something already has to give in those areas, so making another large acquisition is absolutely a non-starter.
https://www.sdxcentral.com/articles/news/vmware-ceo-ibm-paid-too-much-for-red-hat/2019/09/
I think VMware in powerful position. I expect VMware used on premise by many companies already and with their acquisition of pivotal may be targeting the sales of kubernetes to their existing customers.
"IBM doesn’t have the cash on hand to buy VMWare. "
IBM has shown that it is more than willing to borrow big to buy companies...
If IBM buys VMware, it won't be until 2022... once the current strategy (Openshift) has failed to materialize! But hey, I can just already hear the execs...
Yeah spread that virus.
Trade: power + storage + some services for VMware
Dell could buy Power. There are few companies that would benefit from Power, Dell is definitely one of them.
maybe VMware would buy IBM ha ha ha ha
I agree with @zcy+19UptvgV
It makes sense that Dell/EMC would buy IBM Storage and Power and I'm sure AK would be willing to sell. Even though Tom Rosamilia just told us how important Systems is on the trip to the Hybrid Cloud, I believe this would be a deal IBM would not pass up.
Maybe if they raise cash by selling GBS first. IBM doesn’t have the cash on hand to buy VMWare.
IBM would have a Very difficult time coming up with 60 billion of additional debt. Essentially that would double IBM’s debt on the books and the books are not pretty already. Maybe they got it confused and Dell / EMC was buying IBM storage and Power. Just the Patent royalties that Dell / EMC wouldn’t have to pay would fund 30% of the deal. EMC could certainly benefit from embedding Power chips into their storage offerings, and Dell could leverage their component supplier chain to breath some new life into Power. Slashing and burning IBM’s channel organization and replacing it with Dell / EMC’s channel would fund another 10-20% of the absorption. Finally it would give IBM a cash infusion which it desperately needs while reducing headcount. IBM’s storage and Power problem isn’t a technological one (they have lots of good / competitive products in Power and Storage). It’s a cost of investment, and continuing operation problem. IBM can’t afford to keep them.
That would be an utter nightmare. I imagine many people who just work with VMware products would quit their jobs at that point. Or maybe VMware support isn't much better at this point.
Dell is spinning off VMWare later this year. JW sees VMW as IBM's biggest competitor (myopic). VMW revenue is over 2X RH though and I don't see IBM spending $70B (RH valuation multiple) to buy anyone.
Isn't EMC owned by Dell?
Isn’t VMware owned by EMC?