back to article What's dying on the vine and rhymes with IBM?

It was business as usual for IBM in the second quarter of its fiscal 2015 – which in Big Blue's case means it once again posted revenues that were lower than the same period a year ago. It was the thirteenth quarter in a row of which that could be said. Of course, to hear CEO Ginny Rometti tell it, it's still all part and …

  1. Trevor_Pott Gold badge

    Of all the tech companies, I'm slowly coming 'round to be quite positive regarding IBM. Maybe they don't win, but they certainly have a different vision than other companies and are putting both research dollars and a very painful transition period towards what they see as the next generation of computing.

    There never was a future for IBM in the low-margin world. They just don't have a corporate culture that can compete in the race to the bottom of shifting tin, cranking out management software or even providing services. There are too many competitors in all of these markets now.

    IBM's going other places. Doing things at large scale with computers that only Google seem to be interested in trying for. Win or lose, good luck to 'em! I hope the turnaround shakes lose some of the internal bureaucracy and ends up with a leaner organization focused on competent individuals and not endless managers.

    Probably not, but it's worth hoping, sometimes...

    1. SecretSonOfHG

      Don't share Trevor's view

      The IBM I've worked with is an organization with incredible long command chains, where a small army of lawyers is dedicated to shift all the blame for anything bad done by IBM to its own customers and with another, this time much, much bigger, army of managers turned accountants who are clueless about anything their business does but only focus on their bottom line.

      The very few IBMers left that do anything useful or productive (the ones that have not yet been "resource actioned" outside India) form a demoralized team that have to struggle daily with incredible tight reporting requirements and project and service workloads that span what was previously spread across many more people. All this for an increasingly small salary and benefits in the name of corporate profits they know will never get to enjoy. And make no mistake, the Indian IBMers don't share the same culture and values that made IBM what it was in the past century, they see IBM as their springboard to their next job elsewhere. One with a higher pay and better benefits.

      I can't see how this can turn into the company Trevor describes. Large scale computing? Where are the potential customers? The same ones that currently feel being ripped off by an IBM that is constantly trading local people with offshored resources to increase its profits at the cost of worsening service to its customers? The same customers that bet five years ago on IBM server hardware only to see it abandoned? The same customers purchasing IBM branded storage only to discover that it is a mere repackaging of someone else's product, only with an additional layer of overworked support staff?

      And where are the products? Watson? The perfect death trap for the risk averse IBM: no customer wants to sign off a contract where they will be footing the bill to set up an incredibly complex system with no ROI guarantees whatsoever.

      All I can see is IBM slowly fading into irrelevance and reducing itself to two almost independent companies: one a very small, highly profitable, cluster of captive mainframe customers (these will remain IBM customers literally forever) Another made of the small army of lawyers, this time specialising in patent licensing. But this part will not last more than 30 years: on the long term, IBM can't sustain any significant R&D investment if they can't turn it into profits outside patents, something they have been unable to achieve for the last 20 years.

  2. John Smith 19 Gold badge

    "Of all the tech companies, I'm slowly coming 'round to be quite positive regarding IBM. "


    IBM developed the atomic force microscope, copper interconnect for chips and the first high temperature superconductors. They also developed and sold a commercially successful OO operating system (but just didn't tell anyone that's what it was).

    You ask what the current generation of hardware mfgs have done?

    Apple? Dell? HP?

    1. P. Lee

      Re: "Of all the tech companies, I'm slowly coming 'round to be quite positive regarding IBM. "

      Its nice to see a company which actually seems to enjoy doing IT hard graft - R&D, rather than externalising all their costs and grabbing as much cash as they can. Oh, hello Uber.

  3. BillyCanuck

    Big Blue -- Lost Identity

    IBM, the powerhouse of technology lost it's identity when it starting selling off it's hardware division, from chips to mainframes. With it went some of the greatest minds ever to be in technology as IBM imagined, designed and developed the future for us to enjoy. Today, they are mostly concerned with only profits...they forgot what made them great. Yes, I know they continue to file and are granted patents, in the thousands each year, but, to me, the spirit is gone.

    1. naive

      Re: Big Blue -- Lost Identity

      This comment is so spot on, sad to see a once great company like IBM walk the same path into oblivion as Sperry/Unisys did 25 years before.

      This is indeed what you get when profit is the leading motivation, and not the will to be the leader in technology.

      Perhaps Rometty should lead Ferrari after she demolished IBM, i am sure there is something that generates more profit than building fascinating cars, luckily most car manufacturers are smarter than IT companies, they do not allow females to destroy their brand and corporate identity with short term gains.

      1. Adair Silver badge

        Re: Big Blue -- Lost Identity

        Do please tell us what the CEO's gender has to do with the price of fish, or IBM's performance for that matter?

        1. naive

          Re: Big Blue -- Lost Identity

          My remark is not meant negative towards women in general, they just are different in a way they do not have passion for technology as such. They never would build a 12 cylinder Ferrari or a 16 cylinder Bugatti just because a Prius also brings one from A to B, for less costs.

          This attitude also influences decisions over projects like building complex chips, why do something technologically challenging if in the next quarter some profits can be improved by selling consultancy hours or firing the chip designers ?. With no passion for technology, these decisions are easily taken.

          1. Adair Silver badge

            Re: Big Blue -- Lost Identity

            Naive, I know this is a horribly delayed reply, but I'm going to have to call bullshit on that as a credible response. There are plenty of women who care passionately about technology and good design (my daughter for a start), just as there are plenty of blokes who really couldn't give a toss.

            How that passion gets expressed may possibly vary in gender specific ways across a large population, but disentangling that from cultural influences is probably next to impossible.

            So, all you can actually say is that the present CEO, who happens to be female, is not interested in pursuing R&D as a central plank for sustaining IBM's profitability [I have no idea whether that is in fact the case]. Her reasons for that position are her own, and we are certainly not in any kind of position to blame it on her gender.

            Making baseless claims derived from prejudiced stereotypes really doesn't help anyone.

            1. Zed Zee

              Re: Big Blue -- Lost Identity

              At a time when x86 architecture is taking over the world (hyper-converged infrastructure, hyper-scale datacentres, Open Source Software, HPC, Cloud Computing and on and on), IBM decides to withdraw into its own shell and get out of that market.

              Instead it focusses on bringing it's mainframe (LinuxONE) and Power Systems (OpenPOWER) into the 21st century, kicking and screaming and try to wrap the usual software/services around them in a vein effort to distinguish itself and stay relevant in an industry that has long left it behind and taken its best customers with it.

              At least HP tries to keep up with the market - and has so far, despite the upcoming company split, which I believe will actually do it a great deal of good - it's done quite well; Moonshot micro-servers for the data centre, Helios for OpenStack, coining Converged Infrastructure and an ever-present, ever-reliable and established x86 server brand, in the ProLiant systems. IBM has changed it's x86 server brand name 4 times since HP took over Compaq!

              Meanwhile, Dell also maintains a competitive edge. What's that, Mr Customer? You want Hyper-Converged Infrastructure from us? No problem - let's get into bed with Nutanix and offer a solution.

              Every time IBM is faced with such challenges, it sells a portion of itself and makes people redundant!

  4. dchassels

    Lack of R&D in Enterprise software will be costly...

    The IBM emphasis seemed to switch to end to enterprise software delivery with little support for R&D on real innovation. They have over decades made acquisitions in this sector which by definition is "old" technology and related delivery models. Powerful marketing messages have a limited life if not supported with reality .......looks like time is up....

    Enterprise software is at a tipping point with emphasis on digital which requires a very people driven approach. There are very significant long overdue changes coming which will see a commoditized approach that delivers customisation something that will further hurt likes of IBM.

  5. PassingStrange

    Gutted from within

    I've said it before, and I'll say it again: IBM, in its current form and under its current management and management culture, is moribund. It could be years dying yet, but that's what it's doing. The outside world possibly may not be able to see that clearly yet, but it's plain as a pikestaff once you get inside. And its problem isn't sell-offs per se - those are just visible symptoms of a wider culture of "money right or wrong" (and "money for my share options") that came in when Lou Gerstner replaced John Akers in the 90s, and the bean-counters took over from the techies.There's no money available for anything. Pick any 10 grunt employees at random, and ask them how much real education they've had in the last couple of years, say - you'll be shocked at the answer. There may be something in there worth salvaging - but it's not going to amount to anything under the current board, any board likely to replace them, or indeed the sort of middle management appointees that the culture fostered by the board produces.

    1. Anonymous Coward
      Anonymous Coward

      Re: Gutted from within

      IBM was at it's best when it was run by engineers. Thats when all the innovation happened - thats not to say that the company wasn't without its problems, but it had incredible momentum and innovation...

  6. Nursing A Semi


    Chrome off anyone who actually does any real work and replace them with 2 layers of management process.

    It is safe to globally resource your build people because kit always arrives on site assembled and correctly configured doesn't it?

    And as for keeping P-Series "shrinking market" but selling off X-Series "what do we need to grow our cloud offerings again?", simply great strategy.

    The future is bright but sadly not blue.

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