Old IT company Fortis Technology suddenly by IBM, for what?

Recently, the industry broke the news: 26 years of development of the old IT company Fortis Technology Holding Group received IBM notice, will terminate IBM and the group’s members signed various business partner agreements. You know, the cooperation between the two sides began long before Fortis was established in 1996. Suddenly, on the evening of March 24, 2020, Fortis issued a business announcement informing investors. As described in this way:

Fortis Technology Holdings Group, a technology company that has been in development for more than 20 years, and its subsidiaries have been notified by IBM that they will terminate various business partner agreements between IBM and its members from late May 2020 to early June 2020. Upon termination of this agreement, the Group will no longer be able to engage in commercial activities of IBM products and services on behalf of IBM Business Partners.

Old IT company Fortis Technology suddenly by IBM, for what?

Sales of products and services provided by IBM accounted for approximately 25% of the Group’s revenue for the year ended December 31, 2019, the announcement said. The Group is still working with IBM to determine the reason for the termination of the agreement.

The question is: Why did IBM suddenly end such a deep-historical partnership?

Fortis’s announcement refers to “the specific reasons for IBM’s termination of business, still in the confirmation…” It can be seen that both sides of the business termination, Fortis is only a “notified” party, there is no specific reason.

It also means that the event will become an “alternative event” for China’s IT industry, sparking speculation.

What company is Fortis?

According to the information, Fortis was listed on the main edition of the Stock Exchange of Hong Kong in December 2009 and is one of the leading suppliers of information technology value-added solutions for domestic enterprises, engaged in information solutions, distribution of enterprise information technology products and information technology technology support services in China.

The Group distributes a variety of enterprise hardware and software products (mainly including enterprise servers, system storage products and related software) and provides information technology technical support services that are compatible with the distribution enterprise information technology products.

Since 2006, the Group has become one of the three major distributors of IBM hardware and software products.

At present, Fortis has three wholly-owned subsidiaries: Fortis Era, Futong Era continues Fortis’ traditional enterprise-class distribution business; Futong Oriental focuses on artificial intelligence, involving radio, television, media, medical, retail, and education; and Futong Yunteng has always been known as MSP (Cloud Management Services), Cloudy management platform has all taken over the virtualization products on the market, but also AWS, Orcale, Alibaba Cloud, Tencent Cloud and other public clouds.

The inexplicable relationship with IBM

According to the internet, Fortis’s marriage to IBM began 26 years ago. In 1994, Fortis became IBM’s general agent for PC products in China (mainly for the distribution of PC products).

Since then, from IT product equipment distribution to IT technical services continue to deepen cooperation, and gradually developed into One of China’s three major IBM hardware and software product distributors, and for nine consecutive years won IBM Asia Pacific’s best distributor.

After Fortis went public in 2009, the Group and IBM worked together more closely.

Old IT company Fortis Technology suddenly by IBM, for what?

Fortis’s part-time partnership with IBM

Despite the news in 2010 that Fortis was in the company of Fortis’ stake in Fortis, which is owned by Fortis, it has been a clear failure to believe that IBM has worked closely with Fortis for years to come.

IBM, Oracle, EMC. The main reason why so many giants cooperate with Fortis is that Fortis’s domestic channels and customer relationships can help the giants to win strong customers, and Fortis needs the support of companies with strong technical capabilities and global operational experience.

Sudden release or related to the transformation of the giant? 

As a 109-year-old multinational company, IBM’s real threat today is that customer demand for mainframe servers is rapidly disappearing. Earlier results showed a broad decline in revenue in all sectors, excluding the global business services sector, hardware systems and other sectors. Among them, the technical services and cloud platform division has the highest revenue.

As the traditional hardware business continues to shrink, IBM has struggled in recent years, with cognitive computing and cloud platforms becoming the key direction of IBM’s transformation.

The former CEO of IBM, who has been at the helm for eight years, has repositioned the company from selling traditional IT tools to focusing on growth markets and emerging digital tools such as cloud, AI, quantum computing and blockchain. She also stressed that customers could be helped to migrate to AWS, Azure, Google Cloud, IBM Cloud and other platforms.

This suggests that IBM’s aggressive approach on the cloud-computing circuit also means that ibm needs to change its “growth challenges” to lift share prices and ease the revenue crisis.

And this time IBM and Fortis termination of cooperation event, will be IBM and Chinese dealers to change the starting point, will there be more similar events in the Chinese market, will there be more sustained effects? All of this leaves us with questions and remains an industry proposition to be seen.