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Chapter 398 Two Conditions

"Now, do you think we can talk about acquiring IBM's hard drive business?" Ernst's voice slowly rang out in the conference room, instantly breaking the previous commotion caused by Ernst's data center plans.

The entire space fell into a deathly silence, except for the secretary beside Gerstner who kept pressing the calculator in his hand. The clicking sound was particularly jarring in the silence, as if counting down to the end of this game.

When the secretary finally stopped typing and turned the calculator screen towards Gerstner, Ernst clearly caught a fleeting look of seriousness in his eyes.

His eyes held shock, confusion, and a barely perceptible wavering.

Clearly, the numbers on the calculator exceeded his expectations.

Ernst smiled knowingly, looking directly at Gerstner with a hint of teasing in his voice, "Looks like you already know the number of servers needed."

His fingers tapped lightly on the table, the rhythm slow yet penetrating. "IBM's current server specifications can support a maximum of 18 hard drives. A data center needs 6000 million hard drives, which translates to 330 million servers."

Many people looked at Gerstner, wanting to know if it matched the numbers on the computer.

What does 330 million servers mean?

It's worth noting that IBM's server sales for the entire year of last year were just over 100 million units. The demand from this one data center is equivalent to IBM's total sales over three years.

"However, hard drive specifications will definitely evolve." Ernst changed the subject. "I believe that major manufacturers will launch 16GB hard drives this year, and in the next five years, hard drives with capacities exceeding 100GB will definitely be developed."

He deliberately slowed his speech, "Let's take a discount. Even if the number of servers is reduced tenfold, we'd still need 33 servers. At the current price of $1650 per IBM server, that's an order worth around $5.4 million."

His gaze swept over everyone present, finally settling on Gerstner, and he emphasized, word by word, "And I will build no fewer than 30 such data centers in the next five years."

As soon as the words were spoken, the air in the conference room seemed to freeze.

Ernst could clearly hear the rapid breathing of the executives around him, and some even clenched their fists unconsciously.

Thirty data centers mean that server orders alone amount to $162 billion.

This is an unprecedented mega-deal. Even for a giant like IBM, it's enough to allow the server division to meet its KPIs effortlessly for the next five years, and it can even drive the growth of related businesses.

Say yes!

This idea grew wildly in the minds of many people. If they missed this opportunity, it was uncertain whether IBM's server business would ever experience such a revenue surge again.

Gerstner remained calm, facing Ernst with sharp eyes as if trying to see through his thoughts and find a flaw.

After a long while, under Ernst's unwavering gaze, he slowly withdrew his eyes, glanced around at the executives around him, and asked with a hint of skepticism, "Do you know what you're saying means?"

"Just the hard drives and servers alone would require hundreds of billions of dollars to realize your plan. That doesn't even include the cost of the space, let alone the enormous electricity bills required to run those servers. At your scale, a data center would cost hundreds of millions of dollars a year just in electricity."

Gerstner's voice grew increasingly harsh, as if he were exposing an elaborate deception: "Although I don't know what your purpose is in building these data centers, they certainly need to be connected to the internet, right? Electricity, internet, labor costs, plus daily operation and maintenance costs—just those alone would cost no less than five or six hundred million dollars a year."

"The annual operating cost of 30 such data centers would exceed $150 billion."

He snorted coldly, his eyes filled with doubt: "Even if Google is incredibly wealthy, it probably can't come up with that much money, right? Although Google's IPO has been all the rage, even if the amount raised is high, it may not be able to support such an investment."

Yes, those words instantly enlightened the executives present.

Google's IPO is arguably the hottest topic recently. The largest IPO in history is about to be listed on Nasdaq, and some media outlets even say that no company will be able to break this record within a century.

Even if Google is incredibly wealthy, coming up with hundreds of billions of dollars is a problem, let alone spending tens of billions of dollars annually on operations.

"Who said this project belongs to Google?" Ernst suddenly spoke up, his tone tinged with amusement.

Seeing the bewildered looks on everyone's faces, he asked again, "Did I say that this project was initiated by Google?"

An executive sitting next to Ernst, looking at his arrogant and flamboyant manner, almost couldn't resist throwing a punch at him.

This is ridiculous. If Google doesn't get involved, this project will be even more absurd.

Could it be that tiny company like GenTec has invested hundreds of billions of dollars in this project?

So you've been rambling on for ages just to mess with us, haven't you? You've been putting on quite a show, you've really fooled us.

Gerstner also frowned. He didn't believe Ernst would come to IBM and make up stories for no reason, since it wouldn't benefit him at all.

"What do you mean by this?" he asked in a deep voice, his tone tinged with impatience.

"I can't explain what you mean right now," Ernst said, shrugging his shoulders. "But I can give IBM a guarantee. If you're not comfortable with that, we can sign a contract."

"If my company fails to meet the required number of hard drives and servers within five years, ZenTek will hand them over to IBM for free."

In an instant, everyone's thoughts changed again, and the voice of the seller echoed in their minds once more.

Ernst succeeded, and IBM gained enormous revenue.

If Ernst failed to deliver, IBM would have made even more money. The number of orders during that period was a source of revenue, they regained the hard drive business, and they even got a free GenTek company.

All the executives' eyes were focused on Gerstner, their expectations evident in their eyes.

This is a sure-fire way to make money, there's no reason to refuse!

Just as Gerstner was about to speak, Ernst spoke first, "However, I have two conditions."

Gerstner raised his hand, indicating, "Please speak."

"First, ZhenTek's acquisition of IBM's hard drive business must be an equity acquisition," Ernst said firmly. "ZhenTek will not pay a single penny, and IBM's shareholding in ZhenTek cannot exceed 40%."

"

With a loud "Bang!", David, the CFO sitting next to Gerstner, slammed his fist on the table and stood up angrily. "This is robbery! IBM will never agree to such unreasonable demands!"

"Do you know how much IBM's hard drive business is worth? Even with its declining market share, its production lines, patents, and technical team are still worth billions of dollars!"

Ernst shook his head and calmly retorted, "I don't know how much IBM's hard drive business is worth, but I do know that Seagate, which currently holds the number one market share, is only worth a little over six billion US dollars. Moreover, their market share is much higher than IBM's, and their technology is no worse than yours."

"That's because Seagate has been losing money! Their hard drives are priced almost at cost, with no profit at all!" David shouted excitedly, his face turning red.

Ernst gave a mocking laugh and looked at David, asking, "So what? Even if IBM's hard drive business can achieve a net profit margin of 1000% per hard drive, what use are those profit margins when it completely disappears from the market?"

David was speechless when asked the question; he opened his mouth but couldn't utter a single word.

With market share constantly declining, even the highest profit margin is just a castle in the air; sooner or later, competitors will squeeze you out of the market.

Seeing this, Ernst continued with a slightly teasing tone, "Believe it or not, if I went to Seagate with this offer right now, they definitely wouldn't refuse me."

Ernst is robbing us. How much is ZhenTek really worth? It's not comparable to IBM's hard drive business or Seagate.

But everyone knew that Seagate would not refuse his plunder.

If this mega-order lands in Seagate's hands, Seagate's stock price will absolutely explode, like a mushroom cloud, and it may even drive a change in the entire hard drive industry landscape.

Even if Seagate's shares are severely diluted, Seagate's shareholders will still make a fortune and be laughing all the way to the bank.

Silence fell in the meeting room again as everyone weighed the pros and cons.

After a long while, Gerstner slowly spoke, breaking the silence: "Tell me the second condition."

,

Seeing that he had relented, Ernst smiled and said, "The second condition is simple: IBM must design a dedicated server for me."

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