In an interview with the New York Times, Palmisano said that even way back in 2004 he saw that there wasn’t much breathing space for innovation, and that the future for the PC was bleak.
Palmisano said the firm wanted to move into an area where there was an opportunity to do “unique things and get some premium for that” and the “PC business wasn’t going to be it”.
He went all Oracle and claims to have seen the future of innovation in software. With that came a chance to turn stronger profits. Since, IBM has enjoyed going shopping, buying out a strng of software firms over the years. Palmisano’s decision to exit the PC business really worked out in the end.
Palmisano said that the decision to sell the PC business was a difficult and a contentious one at the time, but unlike the chronic to-ing and fro-ing at among HP’s prime decision-mullers about spinning off the PC wing, he stuck to his guns. But the companies are different, and Apotheker’s main reason for being was to turn HP into SAP and annoy Oracle.
For Palmisano, the arguments put forth to keep the PC business – not least the damage to its brand identity – were overshadowed by the opportunity to look for more high margin business opportunities.
So, when Dell and others made their offers it was too good to resist selling while still profitable. But opening doors in China proved the most attractive offer and IBM had Lenovo snap up the PC business, while it increased its presence and began wheeling and dealing elsewhere in the country.