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IBM Businesses China IT

IBM Will Share Tech With China To Help Build IT Industry There 108

Posted by Soulskill from the different-tack-from-Google dept.
An anonymous reader sends this report from Reuters: IBM Corp will share technology with Chinese firms and will actively help build China's industry, CEO Virginia Rometty said in Beijing as she set out a strategy for one of the foreign firms hardest hit by China's shifting technology policies. IBM must help China build its IT industry rather than viewing the country solely as a sales destination or manufacturing base, Rometty said. ... [Her] remarks were among the clearest acknowledgements to date by a high-ranking foreign technology executive that companies must adopt a different tack if they are to continue in China amid growing political pressure. A number of U.S. technology companies operating in China are forming alliances with domestic operators, hoping a local partner will make it easier to operate in the increasingly tough environment for foreign businesses.
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IBM Will Share Tech With China To Help Build IT Industry There More

IBM Will Share Tech With China To Help Build IT Industry There

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  • Buy american only. (Score:2, Insightful)

    by Anonymous Coward

    Bad idea. they will get all the information and ditch IBM take it all for themself. Unless they only share opensource things that is already open then its fine.

    • Re:Buy american only. (Score:4, Insightful)

      by Trepidity ( 597 ) <delirium-slashdot@@@hackish...org> on Tuesday March 24, 2015 @06:08AM (#49325957)

      I think IBM probably realizes that, but hopes to make money in the medium-term anyway. If a pro-China strategy gets them into the Chinese market for the next 10-15 years, they could profit significantly. If that results in their Chinese partners eventually taking over their business and nudging them out, well, in 10-15 years someone else will be CEO, and that's their problem.

      A lot of petrochemical firms are doing similar things. When Dupont goes into a joint venture with a Chinese firm to build a plastics facility, there are not many illusions about is going to happen to the technology: the JV partner will stay with Dupont for a few facilities until they develop enough skill in the tech to do it on their own, then subsequently will start building its own plants without Dupont.

      • Re: (Score:3)

        by Kagato ( 116051 )

        My experiences with IBM is you get a couple true blue IBM guys that act as front men that go to meetings while the real work is done by off-shore workers. Sometimes the offshore folks are IBM, but a lot of the time they are someone IBM has contracted to do the work. Which is why increasingly American companies have been dumping IBM and cutting deals directly with the offshore companies. Why pay IBM to be a middle-man? It's unclear to me exactly what value IBM brings in China outside a name to make execu

    • Re: (Score:2)

      by Anonymous Coward

      To Godwin this thread early; didn't IBM help the NAZIs to round up all the jews, gypsies, black, feeble-minded, etc.? So this is just a continuation of their traditional behaviour.

  • Everyone knew it.
    The people who swarmed there must have figured they could kick it down the road past their retirement just leave the mess for those that came after.

  • Corporate suicide? (Score:1)

    by Anonymous Coward

    They are ready to do anything to bring the dividend to 15$/share. And the fact that they can just give away their technology to the Chinese shows how much of a guaranteed income IBM gets.

  • Not surprising (Score:1)

    by Anonymous Coward

    Especially since IBM sold their PC and Server divisions to Lenovo.

  • Training Your Competition (Score:4, Insightful)

    by Dutch Gun ( 899105 ) on Tuesday March 24, 2015 @06:10AM (#49325967)

    And this will be the last of the money made by IBM in China. They're going to spend a few more years teaching other companies everything they know, and then the Chinese will kick them out and undercut them with their own technology. Just brilliant, IBM. *golf clap* Now they're actually training their own competitors for some short term profits.

    If you haven't yet sold your IBM stocks in the last few decades, now might be the time to do so.

    • Re:Training Your Competition (Score:5, Insightful)

      by renzhi ( 2216300 ) on Tuesday March 24, 2015 @07:19AM (#49326145)

      First off, I've been living and working in China for 11 years, even founded my own software company and ran for 6 years, before merging with another company. So I'll comment on this one.

      You took a very simplistic view.

      An IT industry can not be built overnight, it took many generations to build up the experiences, the talent pool, the mind set, the mentality that people had on software (A lot of Chinese people, especially those in the power to make decision on IT purchase, have a very different mind set on software/service values), etc, etc. I've been here for over a decade now, although there's been some progress in software engineering here, mainly in the few big Internet companies such as Baidu, Alibaba, Tencent, etc, there's not much progress. Enterprise software? Frankly, due to the mentality toward the values of software/services, there's not much changes over the decade. The local software companies in the field are extremely small, compared to the western giants such as IBM, HP, SAP, Oracle, etc. The enterprise software, and that includes systems acquired by government, is dominated by these foreign companies. They took the big profit, and leave the hard work to the locals to slave over. This situation is stupid to all parties. Very stupid of the government, especially to let this kind of shit happen over two decades without doing the proper thing. Very stupid of the foreign companies, as they could have made their life easier and made the cake larger. Very stupid of the local companies, as they are slaving to death, as most projects are losing money for them. And as a matter of fact, a lot of the local IT people, the smarter ones besides that, are giving up on a career in IT, they make more money selling pancakes and without the stress and overtime.

      Second of all, if these foreign companies are not trying to share, they will fight over a cake that will never grow. Look, none of the Internet biggies, the fastest growing sector, are buying anything from them. Their markets are in the enterprise software (and government sector). And these markets are not growing, and if you look seriously into the numbers, these companies are making their money by selling hardware and to a certain extent, software licenses, which are quite small as compared to the hardware portion. And software licenses are getting smaller still, as more and more open source softwares are made available. And selling services? Haha, don't make me laugh. Service is money-losing on all fronts. As the policies changed, if these foreign companies are not trying to change, their cake gets smaller and smaller, and their profit will be significantly squeezed, as they would have to sell via local distributors.

      Thirdly, even if they share, you are not going to think that they will share their crown jewel, are you? They will probably just play the games to comply, to make sure their cake is still there. These companies are exploiting like crazy, without actually investing much here. They have a very strong sale department, and very small tech support, nothing technically challenging. The technical works they do here? Could be done by any code monkey in any country.

      Fourthly, you might want to look at other industries, such as the car industry, for example. They had shared something, but look at how much more they have earned back? Just take a look at the chinese branch of GM, Volkswagen, Honda, Toyota, etc. They only share the parts that they do not have the competitive edge, or are on the edge of losing it, and still keep the core technologies. They think long term. In 15 years, the car market became the largest one in the world. Sure, they have now more and stronger local competitors, but so what? Their cake is so much bigger, they made so much money than before. Try to imagine the enterprise software market, if you can. If we can make it like the car market, this is going to be gigantic. I can tell you that most Chinese firms, even the big ones, have very little IT deployment.

      Anyway, my point is, it is stupid for

      • Re: (Score:1)

        by Anonymous Coward

        Your points sound sensible on the surface. But the experience of US companies is exactly what GP said. Chinese companies want the other guy to share, then they use that technology to undercut him. It isn't a two way street.

      • Re: (Score:3, Insightful)

        by Dutch Gun ( 899105 )

        I think you're underestimating how easily and quickly both technology and infrastructure can be copied given a concerted effort. The Chinese are absolutely brilliant at creating clones of American-designed products. What can take generations to invent for the first time can be duplicated in mere years. Consider the case of the Americans and the atomic bomb technology, and how quickly the Russians achieved parity. Or consider Germany's initial lead in rocketry and then the US / Russia catching up to them

        • Re:Training Your Competition (Score:5, Insightful)

          by turbidostato ( 878842 ) on Tuesday March 24, 2015 @08:26AM (#49326369)

          "It's nothing but a short-term profit grab"

          What else have US corporations become in the last 20 to 30 years?

          "that will hurt IBM in the long run"

          So what? This will be the problem of another CEO. I already got my big bonuses.

          "IBM is already dying a slow death, desperate to snap out of years of declining revenue."

          Or is it USA?

          On the other hand, don't count your chickens before they are hatched; remember IBM was also dead back in the nineties -I think even Netcraft confirmed it.

          • "It's nothing but a short-term profit grab" What else have US corporations become in the last 20 to 30 years?

            Amazon is a pretty good example of bucking the trend. They've caused plenty of conniptions among the Wall Street "in-crowd" [fortune.com] by eschewing short term profits, and instead investing in long term strategies. Look at where they're at compared to IBM now. Wall street only cares about the next quarter's earnings.

            Or is it USA?

            The US doesn't have the explosive growth of China (which is showing signs of slowing, btw), but that's only because China is transitioning from third-world to first-world status. That doesn't mean the

            • "Notice I said a *slow death*."

              Yes. And notice I said IBM was also said to be on their slow death march back in the nineties and still they managed to recover. Heck, Samuel Pamisano is taken as an example on MBA courses just for that. Maybe this time IBM will be able to go ahead again.

              "That doesn't mean the US is necessarily in decline, just that it's relative dominance is decreasing."

              That's a decline. And, yes, US *is* in decline. That it will be able to revert the tendency or not, is still to be seen,

        • I think you folks are all barking up the wrong tree.

          Lotus (err, IBM) Notes.

          Ever heard of a fifth column [wikipedia.org]?

          USA! USA!

        • Consider the case of the Americans and the atomic bomb technology, and how quickly the Russians achieved parity.

          Well, considering that they continuously kept getting information from the inside and it still took them four more years, perhaps one could say that it wasn't all that quick.

          • Consider the case of the Americans and the atomic bomb technology, and how quickly the Russians achieved parity.

            Well, considering that they continuously kept getting information from the inside and it still took them four more years, perhaps one could say that it wasn't all that quick.

            Then again, the Russians had to work to steal it. IBM's actively pushing it out.

            Bought a motherboard or LCD TV lately? Don't even bother to TRY to find one built without Chinese labor in it.

      • "First off, I've been living and working in China for 11 years"

        Great news.

        "there's not much progress"

        Hummm... in one word: Huawei.

        Huawei is not only selling networking gear but quickly becoming an all-encompassing IT behemoth with only two problems to solve in order to be the one-and-only, neither of which will last forever: bad press in international markets and a too slowly growing (for Huawei's pace) internal market.

        Currently the likes of IBM have only two clear paths: join ventures with Chinese companie

        • Re: (Score:3)

          by Bonzoli ( 932939 )
          Or fix NAFTA and the WTO, and actually penalize incoming products where the servants are bonded and jumping off buildings because they lost all Hope. hmmm..... Nope, lets just give it to china so they can shoot down satellites faster.

        • Huawei is not only selling networking gear but quickly becoming an all-encompassing IT behemoth with only two problems to solve in order to be the one-and-only, neither of which will last forever: bad press in international markets and a too slowly growing (for Huawei's pace) internal market.

          For nations that have seen the truth (US and Australia), they've rightfully limited their presence.

          Currently the likes of IBM have only two clear paths: join ventures with Chinese companies (no other way to get into China), get the money today and hope for the better for tomorrow, or not going into China and just perish in ten to fifteen years -oh! and still letting go today's money to other companies that go with option 'A'.

          There's a third option - survive by using a combination of influence over the US(to handle Door A folks) and business strategy to minimize the Chinese threat.

          • "There's a third option - survive by using a combination of influence over the US(to handle Door A folks) and business strategy to minimize the Chinese threat."

            The problem is that China is hugh and has a lot of wealth. Taking it to an extreme, China right now could afford 20 years of autarchy just growing its internal market and still come out of it with the biggest companies on each market to blow out competition once they go international. Both governments and corporations know that; this is why they wa

      • Re: (Score:1)

        by Anonymous Coward

        Your bias is ridiculous. I hope you realize this while you're banging your dog ugly Chinese wife who's only with you for the money.

    • Re: (Score:1)

      by Anonymous Coward

      Sorry Dutch, you are perhaps short sighted.

      If IBM will not do it, someone else will. If no one will teach for money then they it will be stolen for less.

      Ultimately when your product is good competition and copycats come to the party. Only knowing a couple of tricks will not keep one in business because it's innovate or die.

      Something tells me that IBM has a few people that may know what they are doing and found good reasons to do so. Perhaps the competition will bring more innovation, faster progress and at

    • You are writing your comment assuming that the IBM CEO actually gives a shit about the company's long (or even medium) term viability. This hasn't been true in the last 35 years in corporate USA. In publicly traded companies where there isn't a clear owner and therefore someone who cares about hi/her company, CxOs have been rampaging, merging, reorganizing, divesting, outsourcing etc. etc. all kinds of buzzword MBA-ese goes. None of those things were actually done to improve the company, but to make more mo

    • Re: (Score:2)

      by sribe ( 304414 )

      And this will be the last of the money made by IBM in China. They're going to spend a few more years teaching other companies everything they know, and then the Chinese will kick them out and undercut them with their own technology. Just brilliant, IBM. *golf clap* Now they're actually training their own competitors for some short term profits.

      See: Dell ;-)

    • Now they're actually training their own competitors for some short term profits.

      Back then, before 1989, we had a motto: "Capitalists will sell to us even the rope on which we'll hang them."

  • already happened! (Score:1)

    by Anonymous Coward

    share technology with Chinese firms and will actively help build China's industry,

    I think most American firms already share technology with Chinese firms to help build China's industry.

    Wittingly or not.

  • Patent Troll Tech? (Score:1)

    by Anonymous Coward

    IBM has long ago become a services company, selling over priced, vague, business services, mostly to US Government and other companies already locked in. That business is not exportable since its bums on seats and the bums are H1Bs in America.

    The only other business it has is the world biggest patent troll, patenting variations of other peoples inventions. (Remember the stack boundary check that IBM patents with the tiny addition of 'in an OS')? And hitting them for money (Twitter hit for $36 million rather

  • for IBM to lay off another couple hundred thousand.

    • for IBM to lay off another couple hundred thousand.

      The last time Ginni Rometty fired a bunch of IBMers . . . just a few months ago . . . she was rewarded with a $7 million bonus.

      Why would she not want to lay off another bunch? She will get another $7 million for that again.

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Tuesday March 24, 2015 @07:09AM (#49326115)
    Comment removed based on user account deletion

    • Re: (Score:3, Insightful)

      by PolygamousRanchKid ( 1290638 )

      Ginni Rometty is pushing 60 years old. She will probably dead in twenty, or so Alzheimered out, that there is no difference anyway.

      What does she care, how her decision affects the position of IBM or the US in the future?

      She is concerned with cashing in, like, now.

    • It's been well over a decade since IBM cared about much more than meeting their quarterly earnings projections.

      This just buys Ginni some time that she desperately needs to deploy her golden parachute out of the company. Their existing consulting customers are getting sick of the poor quality work that they are receiving, and the loss of business is hurting the bottom line hard.

  • Geebus ! god save us from these short-sighted MoFos.

    I would like to say that the Dept of State needs to know about this.

    http://www.ecfr.gov/cgi-bin/text-idx?node=pt22.1.121 [ecfr.gov]

    However, too many members of the Executive Branch in DC seem to hate the USA more than they hate the Chinese and are likely to WANT this to happen to all our Corps.

    -- kjh

  • A japanese way of saying ... (Score:1)

    by Anonymous Coward

    Those who grow snakes die poisoned.

  • After all of the American workers are fired, who is going to buy all the cheap stuff they make in China? The Chinese? Well, first you would have to pay them more. So the goods would cost more to produce. Doesn't seem to make much sense from a business point of view. Maybe from a charity point of view. On the other hand, hurting 1/3 of a billion in order to help 1 billion is not really a great ratio for a charity either.

    • Re: (Score:2)

      by gtall ( 79522 )

      To some extent, the C party in China sees the problem with putting foreigners out of work, i.e., lose the market for their crap. They are attempting to simulate domestic consumption. It takes a government to wage screwups on a massive, country-defeating scale. And the C party is certainly up to the challenge. The only reason it hasn't yet quite caught up to them is that they are providing a marginally better life for enough of their pop. to keep the malcontents stifled (or shot, they aren't particular abou

  • just work with them. They'll steal it before long.
  • I think, American company will use the chep workers for developing their production, but who knows=)

    • Re: (Score:2)

      by moeinvt ( 851793 )

      IBM isn't actually producing a lot these days.
      Their PC and X86 server businesses have already been sold to Chinese companies. They're divesting themselves of their semiconductor business as well. I assume they'll keep the P-series and Z-series servers for a while, but "International Business Software and Services" would be a much more appropriate name for the company.

  • Comment removed based on user account deletion

  • In other words, a very very (Score:5, Informative)

    by Grey Geezer ( 2699315 ) on Tuesday March 24, 2015 @08:32AM (#49326401)

    small number of wealthy people, will become even more wealthy at the expense of American, middle class, workers. Welcome to the global economy!

  • Glad to see whoring yourself out... (Score:1)

    by Anonymous Coward

    ... for short term profitability is alive and well.

  • Seriously, neo-cons are the ones destroying american business just for short term profits. GE, HP, att, gm, Boeing Cisco, and IBM are companies being ran into the ground by fucking neo-cons who look at stock manipulation rather than profits as ideal.
  • We are simply witnessing another small step in the process by which China becomes the world's economic superpower and the US economy withers away. It seems fine while it's happening, another few years revenue locked in, share price rising. But no-one notices another round of layoffs for US employees replaced by offshore contractors. Might take 10, 20, 30 years, I can't tell, but there's going to be an almighty reckoning when the last white-collar job has been shifted offshore and the US shell companies have

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