Hitachi Buys IBM Hard-Drives for $2 Billion

[Groltz]

http://story.news.yahoo.com/news?tm...=1&u=/nm/20020603/tc_nm/tech_ibm_hitachi_dc_1

So who is going to be first to buy a IBtachi?

 

[CougTek]

I think I posted something about that a while ago on the front page, when it was not yet set in concrete. I hope Hitachi will do a better job on the customer support side than IBM did recently. There was many complains about the exagerate amount of time IBM took to proceed RMAs. While I think they'll keep the same employees, maybe if the direction insist on improving the customer support side, then thing could improve.

We'll see.

 

[Onomatopoeic]

 

[Groltz]

Gary has spoken...

 

[Onomatopoeic]

If you REALLY want something to talk about, then there's a nice beefy rumour that's been circulating the financial world for a few days that Microsoft will buy WorldCom in a matter of weeks. A WorldCom acquisition would give Microsoft a big ass world-wide backbone to saturate with X-Box and Dot Net data. They have over US$40 Billion (that's an American billion, which is a thousand million) in cash sitting in the bank(s).

I've wondered a lot about their pile of cash for a while -- what the hell they were going to do with it if they weren't going to pay some huge fines out to the courts. I had been thinking since about November of last year that they may try to buy NBC Broadcasting, but that really wouldn't give them a lot of value considering Microsoft's core competencies and central interests. But now this little nugget seems to be growing some legs over the past few days. Hmmmmmmm...... YOU HEARD IT HERE FIRST !

...er, probably.

 

[i]

If you REALLY want something to talk about, then there's a nice beefy rumour that's been circulating the financial world for a few days that Microsoft will buy WorldCom in a matter of weeks. A WorldCom acquisition would give Microsoft a big ass world-wide backbone to saturate with X-Box and Dot Net data.

Please stop ... you're scaring me.

 

[Onomatopoeic]

Please stop ... you're scaring me.

If this nugget from the underbelly of the financial world ends up actually occurring, then it's not hard to predict what the "tech headlines" will be SATURATED with for the next 6 months to a year!

Then add in that sure as the sun rises in the east that every hardcore Torvalds, McNealy, Jobs, and Ellison bigot in every corner of the globe along with every Playstation-ain't-got-a-life fanatic will bring life to a halt as we know it. Instead of articles on Serial ATA hard drives, 300 GB SCSI hard drives, Opteron reviews, and 3 GHz Pentium V reviews, we'll see incessant WHAT'S NEXT ON YOUR SHOPPING LIST, BILL??? THE AIRWAVES??? MAYBE THE AIR WE BREATHE??? rantings everywhere.

2003 just might suck.

 

[Onomatopoeic]

http://finance.yahoo.com/q?s=WCOM&d=c&k=c1&a=v&p=s&t=2y&l=on&z=m&q=l

Financial performance of WorldCOM.

 

[James]

I'd be surprised if Microsoft bought Worldcom, although MS does have a history of making some really stupid decisions.

First of all, Worldcom is even today expensive for what you get. Secondly, they don't have a "big ass world-wide backbone," they have a big ass US backbone and then a bunch of other network that basically sucks ass. Thirdly, it's not the purchase price, it's the upkeep - Worldcom, thanks to its desperate attempt to buy market share for the last few years, is bleeding money all over the place - customers are locked into long term contracts that are below Worldcom's cost. Which brings us to point number four - if you can persuade carriers to sell you bandwidth at below their cost, why on earth would you buy them? Fifthly, it's not good carrier economics to use your own network for your inhouse traffic, since it directly impacts your ability to sell your network capacity, which is after all your major asset. Finally, Worldcom has a whole bunch of low margin whiny residential customers, who would want those?

Actually, looking at it, it'd be great if MS bought Worldcom (or GX or whoever). The ensuing chaos, mess, money drain and confusion would give every other carrier several years of free run at the carrier's prime customers.

 

[James]

WCOM's market cap is only $5bn. C&W could pretty much buy that out of cash in the bank.

 

[CougTek]

I read here and there that Microsoft could buy AMD (actually, they might be able to buy both AMD and Worldcom) and that's why they are more prone to support x86-64 than Intel's IA64. The next Xbox is supposed to feature an AMD CPU too BTW, not a Pentium whatever.

If that would happen, I think I would finally and definately switch to Intel for good. It would be the least of two evil.

 

[Onomatopoeic]

I'd be surprised if Microsoft bought Worldcom, although MS does have a history of making some really stupid decisions...

James, I was hoping that you would see this and respond since you work in the telecommunications industry.

I would also be surprised if Microsoft bought WorldCom as well, but stranger things have happened. I don't know what starts some of these rumours, whether it's a gossiper that has spotted someone from MS showing up a lot lately at WorldCom or if its some people artificially trying to pump up the sagging price of WCOM stock so that they can sell it off. If MS ends up doing something with WorldCom it may be a networking deal to support a future X-Box design.

I also recall some time back now that Bill Gates was investing in a couple of different telecomm schemes, one being a system that used inexpensive (to launch) low-orbit satellites and another that used highly efficient low-flying aircraft to perform the same function as a satellite-based system, but without the significant latency problems of satellite telecommunications systems.

 

[James]

I think the idea of LEO satellites, airships etc. has been largely passed by with the availability of cheap fibre. It's not necessarily plentiful in every area of the US at the moment - Boston is particularly a problem, for example (AT&T took over 12 months to fill our order). Eventually this will be sorted out though.

Elsewhere in the world ultimately fibre, wherever possible, I think will be the way to go as well. The economics of satellite are such that you need a wide user base to recoup your investment - usually residential users paying $x per month for a subscription service. The bandwidth requirements of businesses - where the real money is - are such that you can't profitably fill them from satellite, especially particularly given that 99.9% of large businesses' office locations will be covered by fibre buildout anyway. It's only oil and mining companies that are really helped by satellite communications - and they pay accordingly.

 

[Onomatopoeic]

Hmmm. The rumours from the underbelly of the financial world have finally reached the underbelly of the computer world:

...Never one to lie on its laurels the company is always keen to look for new markets to move into. We saw recently that the troubled telecom operator WorldCom may be on the shopping list and now there is news that the Redmond software vendor may be taking on other struggling telecoms companies in the 3G space.


http://www.theregister.co.uk/content/6/25700.html

Then there's this lil' bit:

http://www.it-director.com/article.php?id=2912

James, any comments / analysis on this?

 

[James]

http://www.theregister.co.uk/content/6/25700.html

There's nothing stopping Microsoft sallying forth into the mobile communications device arena (again). If they want to burn spectacular amounts of money, that's certainly the way to go. Manufacturers have had to stop the bloodbath of subsidised handset sales recently, so things have improved slightly for them, but it's not what you'd call a licence to print money. If Microsoft wants to try to convince Nokia, Ericsson et al to buy its OS, more power to it.

The general trend in mobiles (or cell phones, in your part of the world) is smaller - note the runaway success of Nokia's 8 series. Convergance devices with PDAs in them like the Treo or Motorola's one whose name escapes me for the moment, or the Ericsson R-whatever with the flip keyboard have been spectacularly unsuccessful to date. Even the new Nokia 5 series phone with the SMS keyboard on it hasn't been much of a seller from what I've heard. And if you've ever used a WAP or GPRS service, you'll know mobile data services aren't going to set your world alight either. 3G is still some way away, 2.5G has been slow to get moving (GPRS hasn't got anywhere near the speeds it was advertised to achieve) - arguably a land grab sounds sensible but you really have to wonder if the consumer demand is ever going to be there.

I think tablet PCs with wireless connectivity are a good idea, and I think their time will come; I think mobile phones have been extremely successful, as have PDAs. But does a device that combines a phone and a PDA sound like a huge seller? I can't say that I see it, myself.

http://www.it-director.com/article.php?id=2912

I talked about this in some depth before, but I'll add : Worldcom does not have "the best Internet backbone" unless your criteria include high latency, lots of packet loss, and you're not actually interested in accessing it from outside the US or Europe. Worldcom has spent years painfully trying to get rid of residential customers and get into the business space, whereas the Xbox idea assumes that they would need to retool again to get back into the home business - while still keeping the backbone optimised for business usage as well. And above all, why would you buy a telco with all sorts of debt and customers to service when you can buy the capacity you need from telcos for less than cost?

If they really want full ownership, with $40bn they could build themselves a dandy legacy-free global network - in that case, they'd be better off buying GX's carcass than Worldcom (but it'd still be a silly idea).

Note I haven't even begun to discuss the gulf there is between running a software house and running a global telco.