Original URL: http://www.theregister.co.uk/2009/09/29/ballmer_nyt_interview_ibm_shrinkage/

Ballmer says Big Blue hands in too few pies

Memo to IBM: Eat markets the Microsoft way

By Austin Modine

Posted in Financial News, 29th September 2009 07:02 GMT

Steve Ballmer believes that if IBM is to remain relevant among the technology giants, it needs to have its hand in just about everything. In other words, the Microsoft CEO believes that IBM needs to be more like Microsoft.

The Shouty One recently disparaged Big Blue's strategy of lopping-off less profitable business arms in an interview with the New York Times. Ballmer told the Gray Lady that nowadays, tech companies must have a constant appetite for potentially risky new ventures in order to thrive and appease investors.

"IBM is the company that is notable for going the other direction," he said. "IBM's footprint is more narrow today than it was when I started. I am not sure that has been to the long-term benefit of their shareholders."

While Microsoft's biz encompasses everything from operating systems to gaming consoles to online advertising, IBM has focused efforts on proven high-margin markets to the exclusion of other endeavors. Over the last decade, the company has separately shed its routing and switching, hard disk, and PC businesses - citing economies of scale. IBM reckons there are higher profits in enterprise software and services as well as servers and mainframes.

Speaking with the NYT, the president of Microsoft's server and tools unit, Bob Muglia, said: "I don't think IBM is keeping up."

Despite the slur, IBM's choice of emphasis seems to be the right mojo for the recession. The company is still generating profit growth while its hardware sales are getting slammed. And besides, just because IBM doesn't want to peddle everything in tech doesn't mean it doesn't have a plan to place a patent on it. ®