Choices
I just wish Ginny would chose an exit - any exit
The past six years have been unkind to IBM but top brass only have themselves to blame: the firm generated tens of billions of dollars but bought back shares and returned money to investors rather than doing something radical. This is according to respected Wall Street number-cruncher Tony Sacconaghi at analyst Bernstein, who …
It's a problem in many large companies that reward their top executives shares and options based on metrics that aren't necessarily what's best for the company's long term prospects.
Since infinite growth is an impossibility, mature companies need to start looking at different ways to earn money and keep their product line up or services relevant as technology changes (if applicable). A solid company that pays a reasonable and consistent dividend can be a better investment than a company with a growing stock price that could crumble at any moment.
Acquiring companies that don't fit into a company's product mix or into long term strategies can be a dead end especially if the company being bought is behind in its tech. For IBM, buying SalesForce might turn out to be a division that sits out on its own and doesn't add anything to any other IBM division. It might be better to look at something like Dassault Systems (SolidWorks, Catia and other CAD/CAM) that works with very large firms such as Boeing and Lockheed that need company-wide, worldwide hardware/software systems with the need for performance and interoperability. IBM's experience in high performance computing would be great for having a centralized computing center for complex simulations along with distributed data centers that make accessing company engineering easy for teams located in different geographical areas.
"I was just about to give you an up-vote, then I realised that you had written LiMux rather than Linux..."
You realise that Limux was largely developed by IBM? And that quite a lot of the work was done for free just to try and shaft Microsoft. We all know how that ended. (Well if you are one of the few that don't, Munich are ditching their legacy *nix / OSS stack and migrating to Windows 10. And they only wasted about €100 million along the way!)
Issue with the theory that IBM should have acquired businesses, rather than its own shares is that it assumes IBM is capable of successfully integrating the purchased business and maintaining and then growing the revenue stream.
In my direct first hand experience it just can't do it - and I can't honestly recall meeting with anyone who had seen or experienced a successful M&A such as you'd see from someone like Cisco. As a former IBMer, I've no love for anything Ginny does or did, but I think there was a general acknowledgement amongst the less indoctrinated senior management that anything they bought they also tended to kill.
Having been inside the asylum, and now looking at it from the outside, the real way to turn IBM around would be to cull about 50% of the management - save money, increase morale, and boost productivity. For a couple of quarters I had five line managers - two direct, and three dotted line, and I was a simple sales specialist fer chrissakes! 95% of my time spent causing myself long term brain damage with Domino/Notes and endless reports and spreadsheets... every now and then I'd find an hour a month to indulge in my actual role of selling stuff.
The standard IBM acquisition way was to pick pick small targets that they hoped they could massively expand the customer base for by marketing them across all existing IBM clients.
Of course , they would also "bluewash" any incoming products, and often forcibly merge them with some existing (unsuccessful) IBM product in order to minimize their success chances. As well as crushing the spirits of any incoming acquired employees under the weight of IBM process and policy.
As someone who came in thru one of those acquisitions, and yes, my alias is not a complete secret, I can tell you that any acquisition goes thru this process.
And having been in this industry for far too many years, I can tell you that what happens at IBM is not alone in this process.
IBM, Oracle, Teradata, EMC, etc ... they all do this and unless you've spent time working for a mega corp, your soul will get crushed because you are not prepared for it.
There's more, but I can't really say because of friends still within the belly of the beast even today.
I can tell you that what happens at IBM is not alone in this process.
And it isn't unique to the tech sector. I have experience that matches Salestard's sorry tale, almost word for word, but in the energy sector. There is, I think, a link, and that is the concept of "incumbency". The belief by management that they are too big too fail, that (evidence not withstanding) they are successful, and that more generally the world owes them a living. Mr Gumby's list of other practitioners tends to support this, I think.
I think Salestard is also bang on the money with the cure. Clearing out the stables, and dumping entire legions of senior managers is the only way forward. Break up the cosiness, get rid of the inertia and obstructions. The boards of these companies also need reform. Since none of them were paupers when they joined, one solution is a pay scheme that is entirely comprised of stock grants - some immediate, some mid term, some long term. That would mean they'd ALWAYS have skin in the game, even if they leave. Whether that works well for employees I'm not so sure, but at least it would help resolve some of the "agency" problems of managers who don't act in the shareholders' interest.
I had a similar experience at MSFT, awful things such as 'managing your manager' and 'managing up' were positively encouraged. I guess it's symptomatic of any large sales driven organisation that have been around for a while. When this is systemic then there is literally no time to care about your customers.
An analyst whose firm specializes in M&A analysis - and charges BIG bucks to consult for businesses for their help in that field. OF COURSE they're going to point to cases where a merger or acquisition would have been the right call.
Had IBM spiked over the past five years and Apple took a tumble, they'd be writing this exact same research note about how Apple should have done some big M&As and looking in hindsight at companies they could have bought and claim the tens of billions they poured into stock buybacks was misused.
Issue with the theory that IBM should have acquired businesses,
They did, the problem was is they then destroyed them. I was with PwC consulting we were sold to IBM and from that point on they forced the borg implants on us. They had no idea as to how we actually worked with our clients, all they wanted was to get us to ship boxes and outsource everything to india.
They just drove all of the good staff out.
IBM knew the cost of everything and the value of nothing.
They did, the problem was is they then destroyed them. I was with PwC consulting we were sold to IBM and from that point on they forced the borg implants on us. They had no idea as to how we actually worked with our clients, all they wanted was to get us to ship boxes and outsource everything to india.
There's the problem. What IBM needs to do is turn itself into a holding company rather than trying to be some monolithic vendor. When they buy a company they should allow the company to continue as an independent entity rather than trying to assimilate it into the Borg of Armonk. Because right now they behave like ill-mannered vampires, acquiring companies, sucking the lifeblood out of them, then discarding the husk. Instead they should just be buying, holding, and selling independent operations. Perhaps even picking up John Akers' original plan to break the company up (I think I understand what Gerstner was trying to do, but that would never have worked without purging out pretty much all the upper-management types).
I've even thought of a new name for them: "Computer Technology Resourcing" (CTR). Raise your hand if you understand the reference.
I don't think it's particularly controversial to point out that IBM, like a solid majority of big businesses, has grown a cadre of supremely incompetent senior managers. It's typical and commonplace because unless they are very, very careful indeed, almost all companies' senior strata, as they grow, become parasitised by people who think and act like politicians instead of professionals, and IBM—whom I have worked alongside, but never worked for—certainly appear to have that problem in spades. Once you have allowed the upper levels to be colonised by self-serving liars and greedmongers, it's all downhill.
This sad story perpetuates and multiplies because there are few consequences for failure, however abject. Being "rewarded for failure" is a cliché, almost, because of its widespread applicability to politics and big business.
And thus to IBM. It has been badly managed both strategically and tactically, making a decade's worth of unforced and sometimes even obvious errors, shortsighted, blinkered, unimaginative, hampered by institutional arrogance. What will its Board's pay cheques look like this year? Will there be bonuses, even? Will *anyone* responsible for this mess pay *any* kind of price?
Or shall we see yet another Marissa Meyer moment, as the architect of disaster, almost single-handedly to blame for a series of stupid decisions, walks off with a few million?
This strategy is probably going to catch on with other US companies. By lowering their "profits" and moving income to a smaller number of shareholders by repurchasing their shares, IBM have drastically reduced their tax bills and paid their owners (the remaining shareholders) a lot more money.
It would be interesting to know what proportion of the remaining IBM shares are owned by entities in Bermuda, Panama, Channel Islands, and the Isle of Wight.
Senior Management are out for themselves only and strategy only consists of dumb buzzwords.
Middle Management - goodness knows what they do except consume space and have meetings with each other.
Lower Management are overworked and have to stack and rack who will be chopped next in their group, adding to their stress, and have a target on their own back.
When I left my previous manager with 20+ years service had been assigned to a crappy job with lots of meaningless travel in the hope he would take early retirement.
My card carrying acting manager was off on stress related sick leave.
My 2nd level manager was appointed in an email no-one read, and he never bothered to email or speak to anyone under him - had to point out to him I was in his group.
When I quit it was a struggle to find anyone to give my notice to - had to go to a dotted line 3rd level person. HR never contacted me and had to shop around to find someone I could hand my crappy 4 year old Toshiba laptop to on last day. My colleagues even suggested I just go work for my new company and see how long it took anyone to notice.
Still at least all the data centres are now powered by Thomas J Watson spinning in his grave.
Anyway, old IBM joke that is still relevant:
2 lions escape from Whiteplains [insert favourite IBM location] zoo. One week later they meet up again. 1st lion is mangey and thin and stressed out, the 2nd looks not too bad at all. The 1st says - it was horrible, they came after me with guns, I had to hide all the time, there was nothing to eat! But you look great what happened? 2nd says - Oh I hid out in the IBM car park, I ate one middle manager every day, and no-one noticed!
IME the first three pars of your post could apply to almost any organisation more than 15 years old, with >=500 employees and >=$25m revenue.
What we technically capable types need to understand lies in the answer to the question "If I'm so smart, why aren't I rich?" - something I like to remind myself of every morning whilst brushing my teeth. If any idiot could be a middle or senior manager, why are we slogging our collective guys out designing, building, installing and operating computers, when we could be paid 5x, 10x, 100x more just generating PPT that leaves a brown stain wherever it goes and finessing expense claims?
I have a friend who was paid for ten months after walking out on IBM, purely because no-one noticed.
Then again my current employer (financial services, believe it or not) recently discovered they'd been paying someone for the last FIFTEEN YEARS after they left, so... IDK. "FML" is my usual conclusion.
Look, its no secret.
For over a decade, IBM executives have been buying back the company's stock to increase the stock share price as a way to earn major bonuses.
Ginny was promoted to Captain after the ship (IBM / Titanic) struck the iceberg. (Seriously, anyone who knows IBM... why would they put a woman in charge? She was set up to fail from the start.)
Under Sam P, they cut expenses to the bone. They moved everything offshore that they could, sacrificing customer sat in the process. All the time preaching to the sales team that for every percentage point of customer sat gain represented a billion dollars in additional revenue.
So when Ginny took charge, she was dealing with a company that still brought in a pile of cash, just less of it each quarter, and she needed to jump start the company.
She tried. and she was hobbled by her executive team who not only lacked vision, but also imagination. They were so brainwashed and hog tied by the bean counters not much they could do. Not to mention that the promotion ladder at IBM promoted the drone who would follow orders and lacked creativity. That were more process driven and didn't take risks... just do the same old thing because maybe this time it will work. Or they were fed so much blue punch that their brains rotted. (Just talk to any heritage IBMer who was fired... went thru the shock and found that life outside of IBM is much better.)
So don't blame Ginny because she lacked the staff needed to make the change.
You think Trump faces a deep state trying to usurp him? Ginny has it worse. And while I say don't blame Ginny, I haven't forgotten the fact that she too is a product of IBM and because she lacks perspective is also doomed to fail.
"Under Sam P, they cut expenses to the bone..."
Sam it was who said something like this to a collection of senior technical staff:
You don't need a PhD in Computer Science to understand the business model, a liberal arts degree is fine. Execute to the plan and we'll make the numbers.The plan of course included cutting expense and making sales. Couldn't be easier, no messy technology knowledge needed at all.
Correct. Gerstner actually understood that he was running a technology company, and listened to technologists. This did not apply to Palmisano and does not apply to Rometty. Hence the current death spiral.
Gerstner was a bit fortunate in that some of the old-style cash cow products were still viable in his time. He did try to bring on new technology, but Palmisano went the "services" route and, as you say, seemed to believe that human resources could be cut off the roll by the metre, regardless of skills and experience. Rometty learnt from him.
As I recall it, Lou Gerstner was the first leader of IBM to start the "borrow money to buy back stock" game. That was the beginning of the path to hell. IBM couldn't figure that they wanted to own the PC operating system, not lease it from MS. They made the specifications of the PC open for cloning. They'd already be hammered by DEC. The thing that saved them for a time was possessing the best hypervisor for making good use of vitualization on a mainframe. Now they're hoping they can get into the distributed file-system game, but they're at twice the price (it appears....) and the main speed components of their offering seem to be generic NVMe off-the-shelf items. Lou started the financial games way of managing. He had terrific press relations.
IBM took the offshore/onshore model to an extreme.
You don't need any skilled people, just bodies who can do what they are told and are cheap.
The big problem with this is is the ones we had where not able to do what they were told. And as the poor bastard that had to herd those cats it was always my fault even when I had no control over who was in the outsourced team. How the hell can you manage to sort out a large DB2 setup and config when you can't even get a DBA!
When you see a "business strategy" that targets $20 earnings per share you just know that such "management" as there is practices financial smoke and mirrors and no-one is even trying to actually run the business. A cynic might suspect that Palmisano picked this arbitrary (and rather high) number not to benefit the business in any way but because it would make him even richer when he retired/cashed-out (which it did).
Sure, Rometty finally abandoned Roadmap 2015 - in 2015 when it was totally bleeding obvious the game was up. But the senior "management" is still addicted to financial manipulation with unfortunate consequences for the business, it's employees, customers and ultimately shareholders.
Maintaining profits levels and a target EPS is not rocket science - as your earnings decline you reduce your costs (employees) accordingly and also reduce the number of shares (buy backs). But plot a timeline for this "strategy" on a graph and the slope inexorably heads downwards.
I was with IBM for 15 years and it was great to work with colleagues who were by and large intelligent, diligent and committed to customers. But I grew weary of miserly or non-existent pay rises and the ever present threat of capricious "resource actions" decided by some spread-sheet psycho. All the while seeing executive salaries and bonuses grow ever more lavish.
So when Ginny took charge, she was dealing with a company that still brought in a pile of cash, just less of it each quarter, and she needed to jump start the company.
....
So don't blame Ginny because she lacked the staff needed to make the change.
Ah, but you *CAN* blame Ginny, because she was one of those people implementing and DEVISING a lot of those bad decisions and policies under Palisamo's reign. All that happened with her becoming CEO was she continued doing more of the same. She either created or at least joyfully implemented the "LEAN Initiative" (you know, the one often called "Lay-off Every American Now"). So she's not some patsy put into place to fail, she was and is a willing conspirator.
If they want to maximize profit going forward, they should sell everything and fire everyone, and become a patent troll.
Lawyers rule!
If they were to do just that, we would not even have electronic calculators, back to pen, paper, and slide rules, maybe, if Apple were to file suit, you know, slide to "unlock the result", nobody could have a patent on Abacus, right ? Well ... not so sure mates ...
Booboo4u, please watch what you are wishing for ...
Got you! You missed the “/s” for sarcasm.
Unfortunately lawyers do rule, and it makes for unrewarding jobs for the majority of workers.
In the name of profits, putting out a good product/providing excellent service and establing customer loyalty takes a back seat. Does IBM still provide/value any of these things?
I’m feeling the need to watch Office Space again, because it’s so true.
Itsy Bitsy Morons have been struggling with changes in IT since the mid 80s or longer. What most forget their business model was built on mainframes and supporting mainframes. The development of mini-computers and later PCs meant that a lot jobs that were run on mainframes could be offloaded to smaller, cheaper devices. These devices had the bonus of being more accessible to the users. This change meant that mainframes, which were mature product back then, might have declining sales over time.
In the 80s they entered the PC market which the market credibility for businesses. But they seemed to never go all in as if they feared cannibalizing mainframe sales. A couple of major blunders did not help either. There was a period about 1990 when it appeared they might go belly up. There was a grudging refocusing on software services as they got out of the PC business.
One problem Ginny faces, besides incompetent managers, is the maturation of the IT industry as a whole. There are niches such as the 'cloud' that are growth opportunities but as a whole the industry is relatively mature both for hardware and software. Surviving in this type of market where most sales are either repeat customers or subscriptions requires a different approach. A well managed company can still make plenty of money.
or did the journalist read the book from 2013 " The great Deformation " the corruption of capitalism in America from the economist David A. Stockman
which point it in may occasions load and clear that
the IBM managed puts more energy in financial engineering than in new products engineering .
If you're budget is higher to buy back stocks than research and development . Than it cannot come as a surprise x years later that IBM is no longer a leader but a ...
https://books.google.be/books?id=qqA4DgAAQBAJ&pg=PT325&lpg=PT325&dq=David+Stockman+on+ibm&source=bl&ots=KwE_H7LBuY&sig=VLGi0cnARLK-Sh_nymXKEE3FgmA&hl=nl&sa=X&ved=0ahUKEwj_9f6j8Z3YAhWRKOwKHVdfAKkQ6AEIbDAJ#v=onepage&q=David%20Stockman%20on%20ibm&f=false
I'm not a fan of the current regime, but it seems disingenuous of a Wall St analyst to call Rometty out for doing stock buybacks. Wall St crush any business leader who does not maximize shareholder returns. Not "increase profits" or "be the best at X" or "have customer satisfaction scores bested only by mothers and their newborns". Share price uber alles.
So, Rometty finds $92bn between the sofa cushions. What does she do next? Take the easy way and buy shares? Or take the hard way and rebuild the company? You all know what she picks.
The problem for American corporate leaders is that taking the easy path is a one time deal, and so inevitably you then have to do the hard things, like cut jobs, spin off assets etc. to keep the share price train rolling. This is about the point where some people ask "surely you should be investing in new things to sell instead?" and that's true, but it doesn't play nearly as nicely on a balance sheet, and remember that Mammon is always looking over your shoulder ready to strike.
I truly think that the employees at IBM at the top of the IBM food chain are there only to ride it out to its death as like a food train.
If I was at the IBM helm I would be making drastic changes to what they do and such.
A great example is like in outer space you do not need a windows operating system nor a linux operating system. You truly need an operating system designed purely for outerspace missions.
Designing a system with ability for plugins not just as patches but patches of software and hardware design. Perhaps if someone wanted to talk to their hardware then install Alexis from amazon.
Installing AI with links to the AI server farms on the ground. Would be easy to propel our current space agency into the future this way. Automated AI 3D design in outerspace would be done on the cheap!!! Common! We can do it!
Everything you need to know about the core problem at IBM is in "The Innovator's Dilemma". The management has been unwilling to "bet the business" and go all-in on a new technology (as IBM did with the them revolutionary S/360 mainframes back in the 1960's). Everything else has just been symptomatic of this underlying problem. The same inability to re-invent themselves affects much of the rest of the IT industry. Too bad. 40+ years at IBM...
Steve Jobs noted that either Fruit cannibalizes its own products or someone else will. So the question is are you as a business leader willing to let a current product line wither if necessary to have future products that will carry you forward for many years. Ironically being will to cannibalize your own might give the older products more life. I can name Fruit, Chocolate Factory, Chipzilla, and Slurp products without any real effort but I have no clue what products IBM actually has.
are you as a business leader willing to let a current product line wither if necessary to have future products that will carry you forward for many years
No.
I worked for a UK business (Big 6 energy supplier) watching customer numbers shrivel as customers bought different and/or cheaper products from new entrants. Senior management were united all the way up to and including the main board that they needed "innovation" and that the core business would if need be cannibalised by new innovative products. But they just couldn't do it. Even with a business incubator completely outside all normal rules of governance, decision making, procurement etc, they still couldn't come up with new products quickly, and implement them so that they were attractive to customers, and anything that might cannibalise the main business lines just had the commercial life slowly crushed out of it.
Innovation is not about committees, about good governance, sound investment, or risk management. It is driven by mavericks, following seat-of-the-pants instinct, matched with energy and the zeal of the converted. So all the things large corporates are good at is bad for innovation, all the qualities that make for innovation and entrepreneurial success is seen as a bad thing and actively suppressed, even as the organisation tells itself that it is committed to innovation.
Absolutely spot on. And the problem is mavericks can rarely prosper in any large established company because they're 'not on message', and are prepared to take well calculated risks. And not forgetting that innovation rarely comes from people who have tenuous employment, they go for the safe route because they can't be targeted for that. Equally, it rarely comes from those entrenched and comfortable cadres, the magic circles within the company who control the narrative and are never to e questioned. They can be both technologists and management.
Redundant management and others at IBM was a problem as far back as the late 90's when I worked in the PC division. Some second line managers had two reporting managers, each with 4 employees. 3rd line often one or two second line. Many non-management had jobs you could do before the morning coffee break. It's no secret that when Lenovo bought the division they laid off masses of people and still grew the sales enormously.
I think IBM has tried to acquire some new growth businesses
in the last 20+ years. FileNet was one they bought for $1.6B
when it was doing about $400M in sales. With there channels
they were able to grow the business to $800M in sales in two
years. However they milked the cow and did nothing but cut
head count and refused to invest in new R&D. Hence it was
typical IBM since FileNet fit there model, 50% software
sales and 50% consulting revenue, which worked until
they ran that product into the ground.
If you are an investor in IBM stock, I might suggest you
should have bailed about 5 years ago. Now might be
too late, but if Warren Buffet bailed, so should you!
Now you tell me !
Lots of good people at IBM have been misled. While at IBM I was surprised by the faith staff had in their staff share scheme which wasn't that generous. I'm still waiting to make a profit on the shares I bought. If I underperformed for 24 days I would be out of a job. 24 quarters? Seriously?
No need for a coat, I lost that with my shirt.
Lots of good people at IBM have been misled. While at IBM I was surprised by the faith staff had ....
They may be good human beings - but - they are still dum-dum's the lot of them; the competent having either left years ago or joined with the vultures in management, helping with ripping the flesh from the carcass for a percentage of the loot.
I happen to work in a similar setting, we have these collaboration / profit sharing contracts where the idea was to share the surplus if everyone performed under budget. Now, "nobody could possibly have imagined(1)" that if the "partners" instead do a really shitty job with lots of rework then the "partners" can grab *all* of that contract money instead of sharing it.
If one point out how many ways they screw up at project meetings, the contractors people become depressed and despondent because they really, really think they are doing proper work, it is simply not possible to explain to them that they are 3'rd rate at best and they should sharpen up, they think they are Really Good and cheap too (despite being at cost+ 20%, normal is 5%). Then management complains about "bullying" and "work culture" so --- why bother? This is what they want!
The project managers are mostly staying around for the negotiated exit package when the project eventually collapse and is rebooted (it is a "too-big-to-fail-thing").
1) Yeah - right. "My half" of the org chart might have had an unusual faith in their fellow man, I'd rather think that they somehow get a cut of the proceeds since their job seems to be to stop my project managers to go to arbitration and inflict the rework costs onto the contractors.
>"With there channels"
>
>their
>
>"since FileNet fit there model"
>
>their
I've worked in this industry long enough to have met plenty people who can't string a sentence together, let alone one with correct grammar, punctuation and spelling. In my parents' generation such people were labeled "thick", by the same people who hit kids who dared to write with their left hand.
In my experience most of those people are perfectly capable of doing their jobs; plenty of those people shine, despite being unable to write well.
While it may be acceptable to frown upon a badly-written and poorly edited piece of professional journalism or technical document (like most recent IBM Redbooks, to keep this vaguely in topic), one has to take into account the context. In this case, it's someone writing a comment on a web site. And to be fair the comment itself does offer a valid viewpoint, whether you agree with it or not.
Or in other words, give the guy a break. It's Christmas :-)
The IBM people are nice and most of the people I worked with were pretty competent - far better than when a previous place I worked at got borged by Oracle.
However... the 'bluewashing' is ridiculous. Yes, every large company 'integrates' their new purchases. We had a product that would work on almost any Java app server (JBoss, WebLogic, WebSphere) but before the acquisition JBoss was what most customers used - by a large margin. IBM decided this was not gonna fly, the bluewashed version would come bundled with a special version of WebSphere.
Trouble was, our product was successful because it could be easily deployed and managed - that's simply not true with WebSphere, and most of our customers (and internal PS guys) had limited experience with WebSphere. Add to that the fact that the 'special bundled version of WebSphere' had a LOT of bugs due to being rushed meant it was a disaster.
Dear companies, if you buy a company then please think twice before anchoring it to a sinking piece of turd - it is always far more likely that the turd will bring down whatever you've tethered it to!
Given that IBM is doing pioneering stuff in 5 nm integrated circuits, it's hard for me to think that the company has failed to invest in its future. The specific acquisitions recommended could have easily failed as succeeded.
Back when the Macintosh used the PowerPC chip, if antitrust issues would not have prevented it, IBM should seriously have thought of buying Apple. We might have a better Macintosh today if that happened. But then, there would likely never have been an iPhone.
They've been doing amazing stuff with silicon for years, and completely failed to successfully monetize any of it (to the extent they had to effectively pay GlobalFoundaries to get the foundry business and associated liabilities off their books). Silicon R&D is exceptionally expensive, and without fabs its hard to see how they will ever get any return on that investment.
IBM is seen by guys like me in the outside world as unapproachable. I generally am responsible for $10-$25 million a year in solution purchase decisions. I have been very interested in IBM as parts of those solutions but regularly lean towards “build your own” solutions.
IBM should be working their asses off on making access to their technologies interesting to the Github world. For example, right now the world is moving towards FaaS services which has been IBM’s core business model for nearly 50 years and AWS and Microsoft will take that all from them. I have a small $1.8 million budget for a proof of concept over the next 18 months. If it pans out, it will become the core system for the next 10 years at a 2 billion euro multi-national company which is a subsidiary of a top-5 global telecom company.
I’m designing the system by using AS/400 as the architecture of our platform. Since IBM is something which feels unapproachable to me, I’ll invest in small group of people to rebuild all the key components of the AS/400 platform instead of simply buying them from IBM. This could easily be worth $40-$50 million for IBM, but I wouldn’t even know who to call to open a conversation with them. It’s easier to buy some out of print manuals on the platform architecture and build it ourselves and open source it.
This. AS/400, oops, I mean, IBM i [1], is fascinating technology. Basically, it is an operating system with a relational database integrated at the filesystem level. A "file" on IBM i is really a database table, and in fact can be a "virtual file", i.e. the (dynamic!) result of an SQL query.
As far as can see, IBM is sitting on this technology and only selling it to its existing user base, rather than showcasing this to the world.
[1] Stupid rebranding IMHO. AS/400 was a fairly well-known name and had a good rep. Nobody knows what IBM i is.
This year in the UK it was #yearofthepartner, a programme dedicated to working us poor channel partners. At the kick off the crux of the programme was about the importance of skills in the channel and how the skills would drive partner deals and engagements with IBM sellers.
At the end of the presentation IBM said it was all about skills. Up until someone asked a question: "I think that is a lie. It is all about revenue, not skills?"
IBM's answer: "Ok. It is about revenue first. Then skills."
#year of the partner, my arse
They should have leveraged existing content and re-purposed it to create new synergies that changed the exiting paradigm that offered more value to stakeholders while raising visibility and brand awareness to drive more actionable results in response to projected pent up demand and reached out to....
Oh fuck them.
Unmentioned is that buy-backs increase share value and greatly enrich the executives who hold major amounts of options. The new tax law will make this stunt even more popular.
Buy-backs are not betting on the company, they are theft of worker and shareholder value for the immediate enrichment of the BoD
I wish Big Blue would spin off..as far as possible...cutting edge efforts like Watson from its core products and hopefully focus on that in some form of start up mentality. New management, etc. Their blockchain efforts as well.
I work for a growing tech firm that competes with IBM. I know a lot of local IBM folks. Some have never heard of my company (which they should) and scoff at my co workers "oh, you work at XYZ? Pshh.. big deal thats not impressive....". Well it is, cause we are eating IBM's lunch in market share. Maybe you should read up on the technology and learn some humility?
My co-workers and I also happen to know we make multiples more than those IBM folks and are very happy, and they hold mid level "cog in the wheel" type admin roles, dissatisfied and often seeking other employment. But they never make moves...
total head in the sand ignorance and complacency. Riding it out for a steady paycheck. not grinding.
thats the scariest thing i see about IBM. get back to being hungry!!!
IBM is the master of the virtualization for more than 50 years (with it's mainframe of course), and he could have been the master of the PCs virtualization too, only if the management had believed in the PC.
At the time of OS/2, the Mainframe division was so afraid that the PC would wipe out their business, they killed the future of this OS and the PC division, with all the bad decisions and choices IBM made.
If only they had a vision, IBM would have ruled the world completely with their Hypervisor.
I'm not saying it would be a good thing, but it would have been possible.
They are a big Dinosaur (always been) and they will eventually be slowly replaced...
I left 6 months ago after 8 years at IBM.
It simply doesn't know the world has moved on. Addicted to lumpy transaction revenue and lack of strategy in true aaS had left it increasingly irrelevant.
There is no msp strategy and the reseller channel continues to dry up.
Splitting the business is probably the only move, but it is most likely to late.
I used to work closely with both IBM and HP (etc.) for years as a customer. Both seem to forget that my company uses IT to solve business problems. Not an IT problem (usually) but a business problem. Both IBM and HP are still technically based and tack the business on afterwards. You buy a solution from them (more expensive than the competitors) then you find that they have no knowledge of how to use the thing and you have to go to an external (expensive) consultancy company to get the solution in use.
And why did I buy the thing from them in the first place? Because it was sold to me over my head. IBM management has had a talk with my company management and told them that not choosing IBM shows the incompetence of the company's staff. That is me.
However this isn't really just a problem only with IBM and HP. All of the IT companies have problems understanding that IT is purely a service and that the issue is trying to solve a business problem. Microsoft is no better than Oracle. Microsoft doesn't sell directly to the management but it also doesn't also understand the business need. That is mainly stability. I am not interested in the latest techy solution. My business problems (financial, security, compliance) can be solved with a solution from twenty years ago, and usually are... But selling stability is not sexy and it doesn't make large profits.
Anyway I have left the IT field now and work slightly outside it looking in. The mess isn't getting any better.
Bingo article isn't without a bit of irony. In the race to save itself and reach safe harbor, IBM has wasted its most valuable resource. People are revenue. The 80% of revenue is used to pay salaries and benefits of hard-working IBM employees who return with the ideas that drive innovation. Without fresh ideas, innovation and incentives. The company is BM (Brick and Mortar)