Thread regarding IBM layoffs

All Intel/AMD support going to Cairo. Ibm finally is rid of all hardware support for inrel/and servers. IBM corp can Dance in street.

@fj I was in Power sales 4 years. There is NO WAY THEY SPENT BILLIONS on Power11. That is WAY over stated. The response to P11 will be exactly as it was for P7/8/9/10. But this time IBM is ALL IN on PowerVS and really no longer wants or cares about on prem P10/P11 sales. If IBM does not move the needle with PowerVS sales AND SAP RISE on Power-cloud, P12 if it even comes out will be the last. Arvind and Robbie Thomas etc think Power is IBM power supplies for the pathetic watsonx.

@fj IBM is past the point of "waiting for a customer response" on anything. They knew what the story was with POWER many, many years ago...who the potential customers are (or were), how much they could expect in refreshes, new sales, etc. Look on their website...what do they have to sell except storage and a few rack servers?

The bottom line: IBM will either "partner out" POWER or open it up like OpenSPARC. Sure, they'll do custom bids for select enterprise customers, but for most customers they'll either sell them Z or send them to business partners. ISVs like SAP, Oracle etc. will do something similar in response.

Why would IBM partner off Power when it has just launched Power11 after investing billions. Even if they want to, they would atleast wait couple of years to see the customers response to Power11

@OP

The vast majority of IBM Egyptian employees are worse than Indian ones - they have a lot of lovely fake certifications that they love to show off. Based on personal experience they are not much good when it comes to troubleshooting and resolving problems in a timely fashion unless it's dead easy. But they have one advantage over Indians - they are native Arabic speakers and that helps a lot in the Middle East. When it comes to working with other Arabs on technical issues, the Egyptians are the best. They can usually work with US and other Arab techs to fix IBM tech issues since they have good English IBM and Alvind have been chasing Saudi money and business since MBS has billions of dollars. Alvind and his Pipmunks don't seem to score much when they use pathetic Indians who can't speak Arabic. At least MBS might bring in more deals to the table when they use Egyptians, rather than Indians. The Egyptians are winning.

@et yes this makes a lot of sense. A big reason why IBM is screaming "you have to move to PowerVS Power Virtual Server!!!!" aka PVS. That is accessing Power systems and your apps remotely in 1 of IBM's WW data ctrs vs on prem. Most Power customers do not care anymore about the next turn of the crank on P10/P11/P12 etc like they may have used to. It is just a washing machine now and just runs until you need a new one in 5 to 6 yrs. That refresh cycle IBM no longer likes so they would rather you spend more in the cloud-PVS model. Good for IBM. Bad for customer as the TCO is higher despite what IBM is saying. I could see IBM turning off the ability to run Power on prem (look at SAP who no longer supports on prem, it is cloud SAP RISE only).

And as far as Power dragging other revenue (ooops IBM also exited formerly very profitable IGF leasing) that is urban legend. It was what Sys x said for years to try and live longer at IBM but really there are no longer all IBM shops so really Power customers do not but IBM storage of IBM consulting. And there is zero teamwork and motivation for IBM sales teams to work together. It is dog eat dog. In fact most IBM sales people do not know each other anymore with IBM trying to get down to 10 or so hubs in the US. There are real estate offices now bigger than IBM bldgs for sales. I think it is true most US states now have no IBM bldgs other than MAYBE a TLS parts drop. I think IBM leadership thinks you no longer need local sales and SEs. Just have "partners" sell IBM and buy IBM software via SaaS off IBM cloud or better yet off AWS etc. Problem is IBM really has no partners. Partners can and do sell IBM, HPE, Cisco, Dell, SAP, MSFT, Nutanix, VMware etc etc etc so there is no loyalty or leading with IBM like there used to be when the customers viewed IBM reps as the trusted advisors and would FULFILL thru partners. The who IBM ecosystem thing is so sc--wed up with people who have been promoted that have never sold, anything or where horrible at it or have not done it in 15 yrs say "...well when I was a seller...".

If you run the numbers, Power most likely is a cost drain on IBM. Power sales = 2 billion a year at 35% margins (enterprise sales are larger margins (60-70%) but scaleout margins are smaller (5-30%). Given that a new generation of Power (eg Power 12) is going to cost 3-4 billion in development and investment, you can see 700 million profit per year (2 x .35) doesn’t break even till you hit the 5 year mark. IBM can’t have a 5 year development cycle for Power and have it remain viable. THUS IBM has to find a partner to share development costs, or come up with “something else”. Could IBM’s Telum chip absorb “enterprise Power” installs? Perhaps Could IBM spinoff all of the low end and farm the IP? Perhaps Anything is possible, BUT right now given current course and speed, Power doesn’t have a profitable future. NOTE there are other reasons to invest in Power. EG it catalyzes SW sale, it catalyzes consulting and ISV (eg SAP) sales, it provides essential technology for “Enterprise storage” I truly suspect the bean counters have run the numbers and suggested to management that something has to change

It’s all about money; button pushers from overseas cost a fraction of the cost from the ones from the USA ; especially when factored in all the costs associated, such as overhead, etc…

@b1

at one point I remember seeing IBM swag being offered on the w3 site with guess what ?
BLUEPOINTS ...

@ac this makes a lot of sense and seems to be playing out thanks.

@b1 yes, spot on. Here are Polaroid branded (once 1 of the most leading edge and innovative companies on the planet) batteries on sale at Amazon. Polaroid went bankrupt in 2001 and now just licenses its name from a time long long ago...https://www.amazon.com/Polaroid-27083-Super-Alkaline-Batteries/dp/B000Q96GKS

How about a line of RT-inspired products like the IBM SmartHoodie, IBM SmartSneakers, the IBMSmartBullshitter, and the IBMSmartCockSucka?

IBM's future will be to license its name for use on consumer products.

I'm serious about this. IBM is giving up every line of business that it has, and it won't be able to sustain legacy mainframes and software as time goes on.

So it will do like famous names of the past (e.g. Honeywell and GE) have done...they license their famous names to other companies for use on consumer products.

IBM ballpoint pens, anyone? IBM clock radios? IBM Duffel Bags? They used to give out that stuff as swag, so they might as well get license revenue out of them.

IBM in 2nd q announced they had partnered off power and storage manufacturing to Foxconn. It’s just a short hop to get support to be partnered off too. I suspect IBM is moving to an IP type revenue stream for Power and storage, with the partners picking up the perform side of the equation. You could make the case that Infrastructure gets consolidated into consulting with it focusing primarily on mainframe. If you look at the pie that IBM infrastructure presents on every earnings call, imagine IBM keeping just the Z part of that pie under consulting, and everything else (power, storage, cloud, and their associated TSS parts), being partnered off and just managed by consulting via an IP arrangement

@a8 yes agree. In fact we should have gone out on strike when the G Man Gerstner started to rip apart IBM 4-1-93 like a hungry hyena. Maybe a month+ would have done it and IBM would get the msg and his pension heist would have stopped. But it was done drip drip drip so we fealt it but perhaps thought after this cut it would stop BUT IBMers WERE SO LOYAL back in the day and LOVED working for IBM because you were part of something special and paid well with great benefits. It was never the people. It was mis guided mgmt and strategy and execution by people who were promoted to levels they never should have been.

In my prior post I meant to say most people have been saying 1 US support person does the work of 6 Indian/Bulgarian/Costa Rican/Egyptian people. Nothing against people in other lands but for my money US support is best and I want the best and will pay more for it.

@a5

Ditto.

Every time I go shopping, I look for the following info: "Made in... (fill in the blank)"

For example, "Made in China" - I don't buy it.

I'd rather have less stuff, but made in America or a friendly country or a country known for better practices.

I was at a retail store the other day and even the employee told me (when she noticed I flipped the item to look at the "made in..." info), yeah, don't get that one, it's made in Thailand, same thing as China, she goes, and she pointed at another item, and said, this one is better (was made in Portugal). I asked her, do people care about where it is made? and she said, totally, almost everyone asks where it's made these days.

Customers have been noticing the offshoring of IBM support for a very long time and voting with their feet. IBM is really struggling with the zero growth of z mainframes while they still bring in 80% margins. There are ZERO net new installs of Power and z. Complete refresh cycle. Why IBM is pushing so hard for cloud-subscription-SaaS computing which has consistent cash flow (Arvind's #1) vs the 4-5 year refresh cycle that OTC one time charge and perpetual licensing which spiked and dropped. Funny IBM was sued for anti trust at least twice by the Feds for perceived abuse of it's size and share and one of the big beefs by the Feds was IBM's hold on customers via leasing (consistent cash flow). Back to the future I guess.

I think they would love to sell and RIF TLS and RA all the great SSRs. I could see them selling it to Dell etc as IBM cloud and TLS are having a love in with Dell bragging about Dell PCs for cloud and TLS doing support for Dell.

IBM's 2 majors hybrid cloud and AI are going absolutely NOWHERE with customers. I have never seen such ecochamber insolence and tone deafness. Even if they were ok they are pure commodity with no stickiness or loyalty.

If I were a customer I would want my support supplied for the most part done in country. Lets face it, we have consistently seen many say a typical Indian support person for example does the work of 1 US support person. It is lots of things. Culture. Language. Skills. Training. Patriotism. Upbringing etc etc etc. Quality used to matter. No more. Increasingly I am doing business with smaller, local and US based companies and willing to pay a bit more.

It is a race to the bottom.