IBM's one goal has always been 'to be essential'. By spinning off x Servers and Thinkpads, IBM made a mistake. Margins were thin, but a Global IBM could make profits by manufacturing in China, Vietnam, Malaysia and Korea, and selling everywhere in the world. At least large businesses would have stayed as IBM only customers because of global nature and multiple products and offerings. Instead, Dell, Lenovo and HP increased their footprints on PCs and servers. Now, GTS spin-off will make IBM even less essential. Another thought, GTS will freely move workload to AWS or Microsoft. IBM used to be the one-stop shop to many customers years ago. And, I agree with the comment that the amount of work the spin-off will take over the next 12 months, competitors will get edge on getting in to our customer base.
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My question is AK what have you been doing since April You should have known day 1 where you were moving all of the chess pieces Why have you paid Bain a boat load of money to tell you what everyone already knows? 60 days? It should have taken you 60 minutes
- and while these id–ts work on figuring out who goes or doesn't, IBM will get behind even more...
@3cat Listen to Arvind’s webcast. No company transfers for the next 60 days while they finalize what parts are going to NewCo.
What is the 60 day transfer freeze mentioned below?
Cognitive will also unload their low margin Bobby shop parts too
Parts of GBS are under consideration for NewCo as well. Just heard straight from a GM. We will know more after the 60 days transfer freeze.
Buckle up folks.
" Management did not reveal exactly how it will distribute IBM’s $ 64.7 billion in total debt between the two companies at the end of the second quarter, but did state that it is aiming for an investment grade rating for NewCo and while maintaining a better “Single A” rating for IBM. This suggests that NewCo will have quite a heavy debt burden. " Source ;https://www.de24.news/2020/10/will-the-spin-off-from-ibm-actually-benefit-shareholders.html , this is sick..if you spend 34 billion $ to Redhat than accept the cost under IBM Cloud , why GTS have to cover IBM' cost ? Let NewCo to build their own financials.
@1ovn Article is asking the wrong question. The real question is what IBM does next. Cloud requires investment. That's been lacking. Look for big CapEx after spinoff to know if IBM is serious about cloud. Can't keep pretending that Openshift = Cloud while relying on marketing confusion.
What the streets first impressions are It all depends on the debt
https://www.fool.com/investing/2020/10/11/will-ibms-spinoff-actually-benefit-shareholders/
There is a very good chance TSS gets folded under Systems (you need to service what you sell) That doesn’t mean Power and Storage (scaleout) will remain with IBM as they don’t fit into the enterprise model. Systems will become a mainframe, OS, and IP shop. The 4th q 2.3 billion charge will answer that question. That removes systems from the equation. GTS - TSS = 4.8 billion in 2nd q revenue 2.4 billion per quarter is non-cloud and moves to Newco. GBS and Cognitive will each contribute approx 1.2 billion per quarter to Newco You can decide where the non-perform or low margin part of each resides. Most likely TPP, GPS and application management will take the biggest hits with some bench management on the consulting side rounding it out
What will happen to TSS?
Uproot your family and relocate knowing in a year we're with newco?
NO WAY JOSE
I'm sorry .. brothers of a boat that is sinking .. and if there is a direction on this bathtub ... I doubt it is known to the so-called leaders .. good luck
AK said in his Townhall last Friday that NewCo will essentially consist of all of GTS minus TSS.