IBM Agrees to Share Technology with China

Published on Author Christian von Hassell

A worker is pictured behind a logo at the IBM stand on the CeBIT computer fair in Hanover February 26, 2011.   REUTERS-Tobias SchwarzAfter struggling with China’s technology practices that favor Chinese tech firms and pose risks to data security, IBM has agreed to share its technology with Chinese firms. In 2013, after Snowden’s revelations, IBM’s China sales plummeted—add on numerous other problems facing the company, and it is pretty clear IBM needs to pursue every possible avenue of growth.

IBM’s decision also attacks trade secret risks head on. Rather than trying to prevent Chinese hackers from inevitably stealing IBM’s technology, the US firm and Berkshire Hathaway holding plans to actively partner with Chinese firms. They will be able to build everything from computer chips to data centers based on IBM’s technology. This move also comes amid IBM’s aggressive pursuit of Japanese markets, including recent partnerships with Softbank.

3 Responses to IBM Agrees to Share Technology with China

  1. I forgot to mention one additional point: this could prove an interesting – and groundbreaking – case study into how a western tech company can actively partner with Chinese firms. Whether active, consensual partnership will override corporate espionage risks remains an incredibly uncertain proposition. However, IBM will certainly teach the world a lot about how a tech company can – or cannot – do business in China.

  2. This article is somewhat confusing to me because Lenovo, a Chinese company, has owned the IBM laptop business since 2005, and its Intel based servers since 2014. Why just now is IBM fully opening the doors after over a decade of mutual relations with large Chinese companies? China is, as we know, slowing down, so why didn’t IBM help develop Chinese IT infrastructure at the height of the boom? The article mentions policy, but is that it?

  3. Cf. Lenovo: perhaps IBM is defining itself now as a software firm, and wants to sell its patents before they become too old to interest anyone?

    More generally, large Chinese domestic players do have a reason to honor patents, because they export to the US and IBM could seize any products made in violation to its patents. They also have their own IP [intellectual property] that they want to protect or even sell. Whatever may have been the case originally, building your business by stealing technology is no longer a viable strategy for them. So what IBM will do is generate local allies. As the phrase goes, it’s better to have them pissing out of your tent than into your tent.