@10q Sounds similar to what actually happened to DEC (Digital Equipment Corporation) Sold off software/hardware in pieces until finally DEC was acquired by Compaq who in turn was later acquired by HP. Bob Palmer took over as CEO for Ken Olsen, founder of DEC, and ruined the company. I could write a book about how the wrong CEO can totally ruin a company.
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We have all seen IBM's future, believe it or not.
"IBM" will follow General Electric, Westinghouse, Honeywell and Bell and Howell as being nothing more than famous names on consumer products.
The most likely scenario...you read it here first!
- AI and Quantum fail to gain traction for IBM. Nobody takes the company seriously.
- IBM continues to sell itself piecemeal to the highest bidders. Telum, mainframe hardware, legacy software products, other software...all sold off. Storage and midrange? Sold off...the only issue is who the buyers will be.
- Consulting and services will be sold off. Again...who will buy them?
- The IBM name and logo are what remains. They are, to be quite blunt, the only entities that IBM executives are competent to manage. We've already seen the logo on bits of "merch"...coffee cups, ballpoint pens, alarm clocks, luggage, sweatshirts. This is where the path of IBM ends.
Remember...you read it here first!
IBM will continue layoffs until it finds a business model that works and works reliably for many years. For the last two decades, Software, Hardware, and Services have taken turns playing the IBM not-me game. I won’t make profit, but I will amplify that other team which will directly own your profit. Without my synergy, you will surely fail, so you must keep me. Every couple years, a new profit maker is anointed and a new round of the game begins.
Even if they find a model, it needs to work reliably for many years. Not so long ago at the beginning of Watson (AI), a Watson kick-off meeting was held in Austin for the entire Watson management team. The business plan presented would rapidly accelerate to stratospheric heights in 3 or better yet 2 years and remain there for 20-30 years before starting a gradual and still profitable decline. Commoditization utterly destroyed this plan and business in 18 months. Models fail even faster in 2025.
In a world of cheap vanilla-grade CPUs, RAM, networking, and storage and completely free software, it’s hard to find a higher grade product that people will pay for outside of regulated businesses. And those who do unquestionably need the value add point to the cheap stuff and demand lower pricing. And the cowards in sales fear losing 100% of their commission and decide that a steep discount benefits both them and their client.
This is nothing new; it’s just come to IBM’s corner of tech now. In the 80’s there was a battle between two consumer video storage systems: Betamax and VHS. The cheaper — in both senses — won out. There were superior alternatives to Compact Discs for audiophiles, but the CD wiped them off the market. MP3 audio compression is terrible, but it dominated the music streaming and download business for a long time.
All 3 of IBM’s pillars (Hardware, Services, and Software) have experienced their own versions of this. That’s why they play not-me. IBM has 3 future strategies. Hybrid Cloud, which can’t sustain an IBM-sized business. AI which is already deep into the commoditization spiral and has as an industry accumulated over a trillion dollars in debt. IBM has already stepped off the AI stage, preferring to serve as high-end salesmen for partners’ actual products packaged up with an IBM bow. Quantum Computing: how many non-governmental clients will actually need this capability badly enough to shoulder some risk, finance the development costs, and pay ongoing support. Quantum computing could be the opening for IBM to become the CocaCola Bottling company of tech — providing a low-profit product that makes others fabulously wealthy.
Until these things change, IBM will have to undergo periodic amputations. When it ends in one or more passes through Bankruptcy Court, then we will discover how bad things can get.
A once failing tech company called Apple righted itself for a while by leaving the tech industry and joining the fickle fashion industry. Is there another industry where centenarian IBM might fit well?
Buckle up folks … and prepare for turbulence for the duration of the flight.
Hard to work for a place with fear of layoffs always present. I feel for families and even younger people who have young children. Even the RTO policy is hard on families. IBM requiring employees to uproot their lives and move their children to the big city is heartless. I guess people should take note of employers doing this and avoid working for these companies. They have little regard for the family.
IBM's remaining customer base: those chained to mainframes and new ones who don't know the score and believe consultants. Adios little blue.
@d0
and i thought people just made stuff and sold it
it appears there are parasites attached on top of this
Put it like this, Most of their revenue comes from consulting contract. They can only sc--w over so many potential customers, until word really gets around, and noone wants to do business with them anymore, due to their inability to deliver.
If anyone should be RA'd. It should be my first line. That b0z0 brags that she can't code.
She is as useless as Scuba gear in the Sahara.
Let's try to look at this through the lens of business opportunities.
IBM doesn't have many. They are getting rid of people because the owners of the company (the shareholders) decided to sell out major parts of the company for cash. The company shrinks, business opportunities shrink as well, less people are needed. Rinse and repeat. Everybody knows.
It doesn't matter what geography you're in...onshore, offshore, domestic, foreign. Labor arbitrage was a thing some time ago, but at this point the lower-level managers are just trying to keep the lights on. They do this while the executives and major shareholders sell shares every time there's a bump in price. Less opportunities leads to less investment, and less investment leads to less employees.
There are two answers here Both are related but each has a different goal
In first world nations “it’s all about costs” So if IBM can find someone to do your job for less (offshore) YES it’s going to migrate there. Given the first world employee populations, and the Kyndryl 7-8% on shore model, IBM can easily absorb two more large (8k or more) layoffs.
In 3rd world nations “it’s all about efficiency” So if IBM can automate your job, YES it’s going to be eliminated. Given AK’s past statement that 30% of all repetitive jobs will be automated, IBM India will easily eliminate 30k worth of offshored jobs
Look for IBM to slim down to a 225k headcount as time moves forward
If they partner out the channel, and all of scaleout opps (cloud, TSS, and manufacturing) look for IBM head count to get under 200k
@bp oh really ? Thought it is continuous cleanup, like DevOps.
Next one will be with the next 3-4 months
easy answer... it is IBM's only playbook... It will never stop and will probably accelerate under the next CEO (RT).
Brace yourself.