there is panic in armonk. the divs like finance and gts that they wanted to pawn off, needed to conflate this qtrs rev numbers, have no buyers. ginni is obsessed with salvaging her legacy - to no avail. bye.
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No panic here though
I am a long time IBMer and I knew it was over when we stopped using the word "customer" and used only "client". A customer is someone who buys a product, so if we have no customers we must have no products. A client is someone who buys a service and that is all we do. When people ask me "What does IBM do now?" I can't answer them because i don't know. International Business Machines has no Machines.
No one I know at IBM has been on a successful project for the past 5 years. New hires joke that we don't actually have customers. Revenues from various groups are being cannibalized by new groups within the 'strategic initiatives' to boost their YOY numbers. There's no organic growth. Incompetence is rampant within middle management and pure greed or ambition fueling the executive levels. Young talent gets wooed in by the brand but as soon as they get into the thick of it they realize how bad things are. They realize there's no leadership. Technical leadership is full of talking heads who've spent their careers wooing customers as glorified technical salesmen. Product management only knows how to identify companies to buy, but has no clue how to actually design and build a product from the ground up. There's zero coordination between teams on large projects.
IBM is a chicken whose heads been cut off, running around aimlessly before falling dead.
I'm not surprised. There's always been that persistent rumor about IBM selling off the Hardware Division. I always wondered why they didn't. Well, I talked to a buddy of mine in IBM Legal and he gave me an surprisingly plausible reason. Seems that IBM has been consistently overstating the value of STG in the books. And if it were to be sold for what it's actually worth, IBM would take a huge financial loss. This would just about kill their already shaky earnings per share. Plus they'd have to admit they've been using Enron Math with their financials all these years! Wouldn't surprise me if this situation were true with their other divisions. This the result of a decade-and-a-half investing in "Financial Engineering" and not IBM's people, products and customers.
I wish they would just do it. Put an end to the madness.
There are buyers, just not at the price that IBM wants. The way to, set the price is to have several investment / hedge funds (bain, KKR, etc etc) compete for the business. They will do their analysis, and come up with a price. It's surprising how close all of the independently done analysis will be. Ibm management obviously is shopping divisions as they want the company to go in a different direction, and they need to salvage this quarter. Everyone who is bidding, knows that, and will factor that into their bid. They can wait out IBM, till the end of the quarter. Look for an Indian company to take services, Wall Street to take finance, and a legacy HW/SW company to take LegacyHW and OS's, most likely a USA company). Ibm has to extract the value of their 20 year investment into these parts of the business. (Most likely via a structured IP (stream)deal with a OTC purchase to goose the current quarter. IBM's CFO has all but said that over the last few quarters (look at HCL arrangement as the model). It's the Aikers plan just 25 years later. Ibm will have to purchase someone with the revenue raised to change the course of the company. I still think they will move into, the LINUX area in a big way