* Posts by JohnCr

3 posts • joined 4 Apr 2017

What's big, blue, and hands out pink slips? IBM on Thursday: Word spreads of job cuts


The danger of instant gratification

IBM suffers from the danger of instant gratification. The problem started during Sam P's tenure when IBM started managing the company to please Wall Street. Every earnings report had to be rosy. The company was manged, serious cost cuts were made to achieve that goal. That put many of their lines of business into a death spiral. Now they need new lines of business and they are too impatient to spend the years it may take to develop them.

It takes over a decade to develop new medical products and services. Years are needed for R&D, testing, and the regulatory work. IBM's Watson Health work had great potential. The fact they gave up on it in a couple short years shows IBM really does not know how to operate in the health care industry. They were looking for instant gratification, instant profits, a nice pop of their quarterly earning statement. Spending $100M's over 10 years is incomprehensible to them.

IBM is still a very large and profitable company. The problem is their existing business are shrinking and layoffs needed. The new businesses are not growing fast enough, nor are they covering the decline of the rest of the company. IBM use to be a $100B/year company. Now it is below $80B. It is getting smaller each year. The big question for IBM is 'do you want to be a $100B, 80B, or 50B per year company?' If the company wants to GROW it needs to be managed differently. It needs to seriously invest in itself, not pander to Wall Street. The stock buybacks must be suspended. The company should plan on returning smaller profits. A lot more money needs to be invested into the business. And, most important. IBM needs leaders who know how to manage for growth, who know how to build new businesses,

I worked at IBM for 20 years. You can't imagine how many great businesses IBM has neglected over the years. Global Services could be very relevant today if it were managed better, made more efficient (not by moving jobs to cheap labor markets), and saw smart investments in the business. The world needs more storage, a lot more storage. IBM doesn't make the storage the world needs. The R&D needed to make the storage products needed is trivially easy. It is all open source technology. If IBM were willing to operate the division as a high volume, commodity, lower margin business they could be THE major player in the market.

IBM's problem is it is managing the company to please Wall Street. Wall Street does not provide IBM's income. They are really not a customer. IBM's real customers have been subjected to terrible service and over priced products. They are shopping elsewhere and each year in increasing numbers. It is sad to watch.

Stop us if you've heard this one: Job cuts at IBM


Attn IBM'ers


Things one can do... Make the EEOC in the USA force IBM to release its layoff data as required by law- AEDA, OWBPA acts. Contact the EEOC. Contact your congressional representative and senator.

It's 30 years ago: IBM's final battle with reality


A tiny bit more

A few comments.

1) IBM was STRONGLY urged to skip the 286 and create a true 32 bit, 386 version of OS/2. Even Microsoft was strongly pushing IBM in this direction. IBM's resistance to do so was a major contributor to the split between IBM and Microsoft.

2) The MicroChannel was better than the ISA bus. The problem was it was not good enough for the future. The PC evolution was moving towards faster graphics and network (100 mbps) connectivity. The MicroChannel, even 3 generations into the future did not have the bandwidth to meet these needs. The industry evolved to the PCI interface. As an interesting historical coincidence, PCI uses the same type of connectors as did the MicroChannel. And the PCI interface found its way into other IBM systems.

3) The IBM PC was inferior to Apple's products. The PC became more successful because a new industry and IBM's customers worked together to make it successful. (Steve Job - The Lost Interview) In 1987 IBM turned a deaf ear to the industry and its customers. When IBM stopped listening its fortunes turned. This culture took over the whole company and was a major factor in the company almost going out of business in the 1990's.


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