IBM, which really launched the PC revolution, has now a bigger value (market capitalization) than Microsoft ($208.07B vs. $207.95B). IBM was the dominant PC manufacturer in the 1980's. It has sub-contracted the two most profitable components of a PC: the chip to Intel and the operating system to Microsoft. Wintel became very profitable and the 800 pounds gorillas in the computing industry, while IBM needed an electroshock by hiring Lou Gerstner in the 1990'S.
IBM makes a lot of profits now in the business and computing services and is less a manufacturer. By acquiring PriceWaterhouse, IBM made an important transition. Now they are acquiring aggressively in the promising cloud-computing services sector.
On the other hand, Microsoft may have a ton of liquidity, but the market is skeptic about the growth it can provide in the future. Microsoft's stock had a bad decade. The acquisition of Skype makes sense strategically, by complementing its products and services portfolio, but the acquisition price requires huge growth in revenue and profits, to recover this investment.
Louis Rhéaume
Infocom Intelligence
louis@infocomintelligence.com
Twitter: @InfocomAnalysis
A blog on the convergence of info-communications industries: communications, computing, electronics, entertainment, publications and education. Strategic, technological and financial analysis. English and French blog. Cette chronique traite de l’évolution des industries de l’information et des communications et couvre des aspects stratégiques, technologiques et financiers, comme l’économie du savoir et de l’innovation. L’auteur est Associé principal de Infocom Intelligence.
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