Chapter 321: Drawing a Tiger Based on a Cat

Zhou Hualiang is the President of IBM's Mainland region. He has served at IBM companies in many places, including Hong Kong and Taiwan, and is very familiar with the Asian market.

Currently, IBM President Guo Shina attaches great importance to the Mainland market. Last year, Guo Shina even shouted the slogan "Go to the Mainland," confirming the Mainland as one of IBM's most important markets globally!

As the old Guo who turned the tide and propped up the IBM building when it was about to collapse, Guo Shina is the best professional manager IBM has had in over thirty years. Without him, this century-old shop, IBM, would have collapsed with a bang two years ago.

Upon taking office as IBM President, Guo Shina used iron-fisted means to slim down IBM. He spent billions of dollars in severance pay, and within two years, used huge compensation to reduce IBM's staff by over 50,000. It is still slimming down now.

Currently, Guo Shina is restructuring IBM, including its management system, production system, sales system, and so on. If it were the IBM before old Guo, IBM itself would barely be able to survive; how would the Chrysanthemum Factory spend one billion to introduce any management system from IBM?

Precisely because Guo Shina led IBM to come back from the dead, rebuilt a set of systems for IBM, stopped losses and turned to profit, and annual revenue soared several times over, allowing IBM's stock price to increase tenfold in the next six years, the American Huaerjie and media crazily hyped Guo Shina. Only then was this management system established by Guo Shina accepted by countless companies.

To put it bluntly, it was still the hope of drawing a tiger based on a cat, introducing IBM's management system, and being able to double revenue and stock price just like IBM.

But how to put this thing? It's just like a certain period when countless companies hyped the wolf-nature culture of the Chrysanthemum Factory. However, most companies only learned the fur, trying every means to make employees act as cattle and horses for the company, but the company didn't intend to feed them meat at all. The result was that as soon as they learned it, it was useless. Any company that promoted wolf-nature culture would be finished in a few months; the people would run away cleanly, and no company would shout about wolf-nature culture again.

Even because of the change in the weather vane and the change in the mentality and cognition of young people, companies that dared to promote this kind of culture were all put on a blacklist, to be pointed at by thousands of people and spurned by ten thousand. The Chrysanthemum Factory itself doesn't mention it much anymore!

Similarly, IBM's management system, Motorola's Six Sigma, and other things were all hot for a while and eventually disappeared without a trace. Instead, various cram schools and study classes thought of ways to hype this stuff, fooling people into paying money to take exams and get certificates. Pay ten thousand yuan, get a certificate, and get a salary of a few thousand yuan with the certificate; without the certificate... it's still those few thousand yuan!

Of course, for some giant companies, certain positions have requirements in this regard. But requirements are requirements; they require people to have this thing. But does having a Six Sigma certificate have any connection with the salary offered for this position? That is purely thinking too much.

Of course, the current IBM is still very bluffing, especially since the entire IBM is in the midst of recovery, and the status is still very high.

Zhou Hualiang was sizing up Li Dongling in front of him, and Li Dongling was also looking at this person who would control IBM's Mainland company for more than ten years in the future.

"Dongling High-Tech is not the Korean Daewoo, nor does it want to become the Korean Daewoo company. Dongling High-Tech and Daewoo are also completely different!" Li Dongling said, looking at Zhou Hualiang.

"Why?"

Zhou Hualiang became increasingly curious. He came over today to talk about the Shenzhou U-disk matter with Dongling High-Tech, but he was even more curious about Dongling High-Tech and Li Dongling.

In the Mainland, Dongling High-Tech is a rather special existence. Its development is really too fast. Not only domestic companies, but even IBM, Ericsson, Nokia, and other companies that came to the country from overseas are also endlessly curious about Dongling High-Tech.

You must know that the time IBM came to the Mainland was more than several decades earlier than the time Dongling High-Tech appeared. In the 1920s, while still in the Republic of China period, IBM had initially entered the domestic market.

In recent years, IBM's return to the Mainland started from the 1980s. It was one of the earliest overseas companies to enter the domestic market. Starting from a few years ago, IBM computers could sell about 200 million US dollars worth of machines in the country every year and could still generate profit.

However, a few years have passed, and IBM's annual revenue in the country is still 200 million US dollars. Compaq, which entered the Mainland market several years later than IBM, saw its revenue grow by more than 200 million US dollars in the Mainland last year alone. This left the IBM headquarters confused, which is why Guo Shina shouted the slogan of letting IBM go to the Mainland.

Zhou Hualiang came to Dongling High-Tech today, actually also carrying a bit of inspection, and even the meaning of learning from experience. Dongling High-Tech is the technology company with the fastest revenue growth in the domestic technology industry in recent years, even without one. Zhou Hualiang naturally also had a bit of curiosity, wanting to see what exactly was special about Dongling High-Tech.

"Daewoo's layout is spread too wide, and the risk is too great. You also know there is an old saying: greed for more leads to poor digestion. Daewoo has entered too many industries: textiles, construction, shipbuilding, automobiles, robots, telecommunications, and home appliances. These industries are all industries that require continuous heavy investment!"

"But Dongling High-Tech also seems to have entered quite a few industries?" Zhou Hualiang said with a smile, but his gaze was firmly fixed on Li Dongling's face.

"It's different!"

Li Dongling paused slightly before speaking, "Dongling High-Tech has not deviated from its main business, including those investments, which will not affect Dongling High-Tech. If necessary, Dongling High-Tech can cut them off at any time!"

Since its establishment, Dongling High-Tech has always been playing with high-profit technology products, from electronic pet machines to Shenzhou digital cordless phones, and then to Xiaolingtong and Shenzhou U-disks, all of which are products with quite high profits.

The super-high profits allow Dongling High-Tech to continuously recruit troops and buy horses, attract more R&D personnel, continuously invest in R&D, and then develop new products. Of course, this way of playing is also high risk and high return. If Dongling High-Tech were not steered by Li Dongling, someone else would have long since led Dongling High-Tech into a ditch.

As for those companies invested in by Dongling High-Tech, at least now, they can all support themselves. Even money-burning beasts like Dongxin Semiconductor and Oriental Optoelectronics actually have side businesses to provide them with revenue, which will not let Dongling High-Tech keep throwing money into them like a bottomless pit.

Not to mention Torch Group, Focus Media, Japan's Wan Dai, BYD, etc., all of which can bring back large amounts of revenue and returns for Dongling High-Tech in the future.

"In addition, Dongling High-Tech does not have too much debt!"

Li Dongling finally said. Although Dongling High-Tech previously borrowed a portion from overseas banks when setting up Wanjia Appliance City and acquiring Wan Dai's equity, the overall scale is actually only a few hundred million US dollars, and they are all long-term loans of more than five years. With Dongling High-Tech's revenue, the pressure to repay debt is not great. If necessary, the debt can be paid off at any time.

Upon hearing this, Zhou Hualiang was obviously stunned for a moment. He heard some overtones from Li Dongling's words.

Daewoo or a group of Korean companies like Hyundai and Samsung all have large amounts of debt. These companies have acquired countless companies, big and small, over the past ten years or so.

In order to have money for acquisitions and expansion, they did not hesitate to borrow short-term three-month debt from Huaerjie institutions, and then repay previous debts. To put it bluntly, it is using loans to support loans, just like some people who rely on credit card cash-out to turn around, constantly tossing back and forth, constantly using new loans to repay old loans, and their pockets are cleaner than their faces.

Over the past ten years, the Korean economy has been quite strong. Daewoo could sell six or seven billion US dollars worth of automobiles and other products in exports a year, so they were not worried about repaying debt at all. They constantly borrowed various loans, not only long-term loans but even short-term loans with high interest rates for a few months. Daewoo and Korean companies dared to borrow them all the same, not worrying at all about the problem of not being able to repay.

Perhaps the ten-plus years of good days have made the Koreans completely forget fear. Of course, there is also the reason that the Korean suzerain state has always been free-ranging. When the leeks have not been cut on themselves, they will not know that they are the leeks...

"Does Li Zong mean that Daewoo might collapse?"

Zhou Hualiang looked toward Li Dongling. He had also been to Korea, but the domestic scene in Korea at this moment was a scene of blazing fire and cooking oil, shouting to hit the threshold of a developed country, but it didn't look like a scene of suddenly resting the dish at all.

"I have never said this!"

Li Dongling shook his head with a smile, and then his expression became serious, "But who knows? Heaven has unpredictable winds, and people have misfortunes overnight. Who knows which one will arrive first, tomorrow or an accident!

But if it were IBM, would it be like Daewoo, placed under the risk of being able to collapse at any time as long as it is withdrawn by others?!"

Zhou Hualiang thought for a while, and then slowly shook his head. Just based on Guo Shina's character, he certainly wouldn't play any extreme operations like those Korean companies in Daewoo.

Looking at Li Dongling in front of him, Zhou Hualiang felt that he was almost completely different from those young, reckless, adventurous, and radical young founders of technology companies he had seen before.

Thinking back to those products of Dongling High-Tech today, Zhou Hualiang sighed. Other companies have traces to follow and can be guessed, but he couldn't guess at all what Dongling High-Tech was going to do next. It was really because those products launched by Dongling High-Tech had never been launched by any company before, which made other companies unable to imitate and guess!

Exhaling a breath, Zhou Hualiang brought up the main business, "Li Zong, just as I came over today, IBM is very interested in cooperating with Dongling High-Tech on the U-disk project.

IBM headquarters and I both want to know, what kind of price does IBM need to pay?"

IBM, which had just come out of the ICU ward, did not mean to look down on U-disk revenue. Now that IBM has not fully recovered its vitality, it attaches great importance to the revenue brought by U-disks.

After the news spread, IBM's stock price far away in America had already risen slightly. If the agreement could be fully reached, then IBM's stock price would probably rise sharply again. If it could be like Microsoft, that would be even better.

As for Microsoft, which obtained the North American agency rights for the Shenzhou U-disk, it also ate the dividends, and it ate two waves!

The 16M Shenzhou U-disk sells for 60 US dollars in the country, while in America, where Microsoft is the agent, Microsoft claims that because of tariffs, transportation, promotion, agency fees, channel fees, etc., the selling price reached 80 US dollars. The cost price for Dongling High-Tech to supply Microsoft is 45 US dollars. Selling one Shenzhou U-disk, Microsoft nets 35 US dollars, which is more than what Dongling High-Tech earns!

The 32M memory Shenzhou U-disk was sold by Microsoft in America for 95 US dollars, which is also 20 US dollars more expensive than in the Mainland. The sales volume of the Shenzhou U-disk in America has also exceeded 900,000 units. That is to say, just by earning the price difference, Microsoft earned at least 30 to 40 million.

Of course, this bit of money might not count for much for Microsoft, but the Shenzhou U-disk represented by Microsoft selling well in America, this is the performance of Microsoft in the hardware industry!

This directly caused Microsoft's stock price to rise for several consecutive days, with an increase of over 6%. The market value increase alone exceeded billions of US dollars. For those shareholders of Microsoft, this is much more important than how many US dollars are earned back.

Because of the Shenzhou U-disk, Microsoft's stock price soared. Who wouldn't want that for companies like IBM? It's just that looking at companies like PNY that have dealt with Dongling High-Tech, IBM also knows that Dongling High-Tech is completely different from the Mainland companies that IBM and others have dealt with. It is simply unrealistic to want Dongling High-Tech to give up U-disk patents with empty teeth.

"Dongling High-Tech's requirements are very simple. The reason why only five companies are authorized to produce U-disks is also for the healthy development of the U-disk industry. Of course, it also includes providing better services for U-disk users!"

Li Dongling said, biting his upper and lower teeth. When Zhou Hualiang heard this, he let out a laugh. IBM is no stranger to this kind of statement. Back then, IBM, which held a large number of computer patents, often used patents to target and disgust other competitors. What was said at that time was even more high-sounding than Dongling High-Tech.

"What Dongling High-Tech needs IBM to do is very simple. The first thing is to maintain U-disk patents globally together with Dongling High-Tech, prohibit other companies from infringing on the U-disk patents held by Dongling High-Tech, and when necessary, sue the other party together with Dongling High-Tech!"

Hearing the first condition, Zhou Hualiang nodded lightly. This condition was not beyond his expectation. Dongling High-Tech just wanted to pull IBM's tiger skin to deter other competitors.

But subsequently, the two conditions left Zhou Hualiang astonished there.

"The second condition is also the same as the agreement signed with PNY. For every U-disk IBM sells, it gives Dongling High-Tech 5% of the revenue. Dongling High-Tech needs this revenue to develop U-disk storage devices with more advanced technology and larger memory for peers like IBM, Philips, PNY, etc.!"

"The last condition, Dongling High-Tech hopes that IBM can transfer and authorize part of the solid-state drive technology and patents to Dongling High-Tech, or develop the solid-state drive project together with Dongling High-Tech."

"Solid-state drive?"

Zhou Hualiang couldn't help but exclaim. He was not surprised that Dongling High-Tech wanted IBM to pay patent fees, but he didn't expect it to want to gnaw on the hard bone of solid-state drives.

It is really because IBM has been heartbroken by solid-state drives. When the laboratory produced the first solid-state drive back then, the entire IBM cheered for it.

But subsequently, countless funds were thrown in, and after so many years, there has been no progress. The solid-state drive that can be mounted on a computer has been slow to show signs. IBM is a bit desperate, feeling that no matter how much money is invested, it is like throwing it into the water. Now this project has been put into the cold palace. Unexpectedly, Dongling High-Tech wants to touch it with an iron head.

Looking at Li Dongling a few times, Zhou Hualiang hesitated to speak, "Li Zong, I am willing to accept the first two conditions, but I need to report to the IBM board of directors for a decision."

"As for the last condition, it is not something I can decide. It needs President Guo Shina to make the decision. But I want to remind you that the solid-state drive project might have great risks. I don't want this project to affect the relationship between IBM and Dongling High-Tech!"

If Dongling High-Tech didn't have its current scale and influence, then it would be a pit. Zhou Hualiang would be too lazy to explain. But now, he has to say one more word. In the future, IBM's Mainland company and Dongling High-Tech will still have to eat in the same trough. He doesn't want to become a mortal enemy with Dongling High-Tech because of the big pit of solid-state drives!

(End of chapter) ===== CHAPTER 322 =====