Poor, pitiful IBM? Or just a new target for doomsayers?

I can't comprehend reports in the media that portray IBM as a troubled company. Perhaps there is another company with that name or my research is completely off-target. Neither of these is likely, so it must be that the prophets of doom — having failed to hasten the demise of Advanced Micro Devices, Apple Computer, and Sun Microsystems — have chosen a new target.

I predicted that IBM’s US-based chip fabrication plant would become the Death Star of foundries in its class. Indeed, IBM is taking business away from overseas companies; Sony is the latest to jump onto that assembly line. The faster-than-predicted delivery of the 90-nanometer PowerPC 970 (Apple’s G5) CPU is a triumph, but this is the kind of work at which IBM excels.

My favourite case in point is enterprise hard drives; the speed, density, and stability of which were raised beyond accepted limits by IBM. The company has always been strong in engineering and manufacturing. Remember that IBM sold its hard disk business to Hitachi, with the sale price being close to the cost of the new chip facility. Of course it will take time to ramp up its chip business, and IBM will never be another Intel. I have no doubt that IBM will eventually dominate. It’s just not easy for companies such as Sony to switch chip manufacturers. Give them time.

The blue-background ad IBM used for the Super Bowl followed the company’s usual formula, but it shocked the audience when it turned out to be a commercial for Linux. I’m told that portends the death of IBM’s commercial Unix (AIX) strategy. When AIX crumbles, can the Power product line be far behind? Power can’t run Windows, and customers won’t extend AIX’s pedigree to an OS written by a gang of kids. And according to Sun, IBM’s failure to indemnify its AIX and Linux customers against liability is an indelible stain on Big Blue’s credibility. Should all else somehow resolve favourably, The SCO Group lawsuit will make IBM wish it had never heard Linus Torvalds’ name, much less have purchased Super Bowl ad time.

I risk bringing all of tech journalism down by asserting that IBM’s Linux strategy isn’t a backstop for an ailing commercial Unix plan. Linux, through the help of IBM’s contributions, is a commercial Unix. IBM is renowned for keeping technology alive forever, if not for customers’ sake, then certainly for the service revenue. No AIX customer need fear being marooned. If the customer chooses to migrate to Linux, it will have the help of IBM, IBM’s partners, and the entire open source world.

Then there is the quagmire of Java. Sun has sucked the margins out of enterprise Java by aggressively pursuing customers that were once accounts of J2EE licensees such as IBM. That much is true. But to expect IBM’s Java development to stall is folly. Sun merely made the game more interesting. In an open letter to the Eclipse Foundation, the open source Java tools project spearheaded by IBM, Sun held out an olive branch to the giant Java licensee that Sun has worked so hard to tweak.

The branch was in the form of a plea that Eclipse join Sun in a consortium of Sun’s creation, and that IBM back away from its contribution to the project. Sun’s goal is to hold IBM at bay long enough for Sun to realize its delayed development tools efforts. Sun is no more likely to succeed at slowing down the Big Blue gorilla than the prognosticators of dark times.

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