IBM Sells PC Business, Retains Brand and Customers
by Bill Rose, SSPA Founder and Executive Director

As IBM takes its first few steps away from its PC business, selling it off to China-based Lenovo, the company clearly understands the immense value of its relationships with customers. That emphasis on customers is critical to the company as it sharpens its focus on expanding its services business, particularly its on-demand strategy and IBM Global Services sales.

IBM isn’t stepping all the way out of the business; the deal includes the formation of a combined venture with IBM taking almost a 19% stake in Lenovo, while Lenovo pays $1.75 billion for the PC unit. Also part of this deal, IBM continues to sell, service, support, and finance ThinkPad notebooks and ThinkCentre desktops. The arrangement looks and feels more like an outsourced manufacturing arrangement, at least for the coming years. The products will continue to carry the IBM brand – another good reason for IBM to continue to support the products. No smart company would trust their brand and reputation to someone else.

Smart people at the company clearly understand the value of customers and the value of supporting and servicing those customers as IBM tries to convince them all to move to their on-demand view of the world. What better way to understand customers and their needs than to listen to and resolve their issues?

But supporting customers that are in reality buying product from someone else creates some challenges. One challenge the combined entity will face is developing an effective communication channel between the two entities, to ensure they can efficiently service customers and maintain those relationships. The other will be to ensure customers continue to get the level of support they expect. One slip with uncertain customers could easily send them to running to competitors.

In the near term, IBM promises that little will change for customers, but the acquisition will undoubtedly create customer uncertainty that competitors will try to take advantage of. This puts customers squarely in the driver’s seat. IBM must keep the relationships it’s developed to continue to create revenue opportunities for its services business and competitive offers will create long levers for customers.

In the end, this should be a boon to customers who should expect great support, more service offerings, potentially better pricing, and more. If IBM listens to customers and delivers, they’ll be successful in capturing loyal customers while getting out of the highly-commoditized, low-margin PC business.

Please let me know what you think. Send me an email, bill.rose@thesspa.com. Thank you.

Sincerely,

Bill Rose
SSPA Founder/Executive Director