Maxed Out
Because the System i can run at redline speed all day long . . .
June 6, 2007
IBM's Printing Division Morphs, Goes Live with Ricoh
IBM previously announced the sale of its printing division to Ricoh this year, and now it's official: the division is now operating as a new, albeit jointly owned entity, InfoPrint Solutions Company (IPS).
Ricoh now owns 51 percent and will progressively acquire the remaining 49 percent from IBM during the next three years. IPS has 1,200 employees in 18 or so countries. The printing business generated a cool $1 billion in revenue last year, and, as you might guess, IBM will be supporting the sale by providing maintenance services to IPS for one year, after which 1,000 IBM printer maintenance specialists may leave IBM and join IPS.
The System i
Many System i customers have also been Big Blue printer customers, some with serious investments in complicated printing solutions. Might these customers experience troubles with the transition?
"I don't see any immediate concerns for System i customers," notes Charles King, principal analyst for Pund-IT. "Ricoh is a solid company with well-regarded products, and the IBM acquisition provided the company the means to step up its visibility and opportunities in the enterprise space. In other words, I expect them to keep things on an even keel with existing products and to make sure existing IBM customers — including those using System i — stay happy. If they don't take this approach, they run the risk of cutting their own throat."
In addition, King says that Ricoh's existing small business products should be of interest to System i SMB customers, so this deal should expand the range of printer options available to those clients.
The Payment Plan
The staggered payment structure of the deal, which is common for a variety of financial reasons, also influences a positive shift with employees and helps ensure business continuity.
"It's a model IBM has used previously," King says. "In Hitachi's purchase of IBM's disk drive business, 70 percent of the cost was paid up front with the remaining 30 percent delivered over three years. In the Lenovo deal, IBM retained 18.9 percent ownership."
Posted by cmaxcer at June 6, 2007 8:16 AM
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