IBM's New CEO Will Need to Drive Cultural Changes to Ignite a Turnaround

The list of notable IBM stumbles since 2012 is too long to list in this article. But on a big picture
level, here are a few major ones:

1. IBM's massive software operations have grown more slowly than an enterprise software
market that has seen healthy growth amid a secular shift towards cloud/SaaS offerings.

2. IBM's also-massive IT services and outsourcing operations have struggled to grow, losing share
to the likes of Accenture (ACN) and Infosys (INFY) .

3. The adoption of Amazon Web Services (AWS), Microsoft Azure and other public cloud platforms
has directly or indirectly weighed on numerous IBM hardware, software and services businesses.
And though IBM spent $2 billion back in 2013 to buy web hosting and cloud infrastructure
provider SoftLayer, it has remained a second-tier player in the cloud infrastructure space.

4. IBM has made several dozen acquisitions during the Rometty era, and – while it's possible that
the recent, $34 billion, Red Hat acquisition works out – the company has thus far failed to get a
sufficient return for all of this spending, judging by how its sales and profits have trended for
various businesses that the acquisitions were meant to strengthen.

https://realmoney.thestreet.com/investing/technology/ibm-new-ceo-will-need-to-change-culture-to-ignite-a-turnaround-15226105

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My experience with Krishna over the past few years in Cloud and Watson has been cuts, cuts and more cuts. I can't imagine we will see anything different for the entire IBM in the near term.

Krishna signed on to do the dirty work. That was baked into the cake before he took the job. The only question is how quickly does it start. I would speculate sooner rather than later as it gives them more runway to achieve the savings. Remember the cuts are self funding according to Kavanaugh’s 13.45 per share Let the games begin

@1wob - Correct. The culture can be changed, but Arvind has to be willing to fire a lot (most) of the SVPs and GMs and also needs to be willing to sell off underperforming businesses. The problem is those execs all know where the bodies are buried and those underperforming businesses are still providing revenue even if they're not growing and not profitable.

IBM is silo’ed and has zero incentive to play nice with others. Until management addresses that, IBM will not change. Most likely a culling of the management team is long overdue. IBM exiting businesses that they no long can compete in, or innovate their way around in, will also mean radical strategy changes

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IBM's New CEO Will Need to Drive Cultural Changes to Ignite a Turnaround

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