With so many cuts, one has to wonder what the end game is for IBM. Other than keeping EPS stable, I believe there's something in the works, whether it be acquisition, merger, selling off portions of the business. Any insight into Ginni's, execs, boards, mind to bring some reason to the hacking of limbs. I've heard rumors of Apple or Salesforce acquiring portions of IBM and a barebones skeleton crew. Thoughts?
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Just resigned after 20+ years in IBM (UK) and I would say the comments above are pretty much how I see things. In the last 10 years they have sold off all property and leased back a shrinking footprint, culled jobs by 10-15% every year until this year it is more 30-33%, they stopped enhanced redundancies, stopped any meaningful bonuses, pay rises very rare. There is absolutely no sense of business impact to any of the job cuts, service is appalling, projects and processes are wholly inefficient. The word employees use to describe the work environment inside IBM is "toxic". To add to the insult and stress they overload the remaining staff with marketing bullsh1t, compulsory education and a laughable adoption of Agile with a crash course online education and a plethora of new tools on top of the old ones.
GTS Germany is annexing 1000 jobs to a subsidiary to work around labour laws and I am quite sure a imminent rank and yank exercise. it has all the marks of a final squeeze before a major collapse or sell off.
I can imagine a final big dividend for shareholders and a final fat payday for the retirement ready Ginni.
Someone posted on this site recently the focus on top 250 accounts, I would bet most if not all are mainframe related shops due to software revenue. Think large banks and insurance companies worldwide. IBM IGS is taking over the assets, combining with software, and calling it 'cloud' , they are discounting this software revenue. This is why mainframe is now 'strategic'. No way, now how is IBM growing cloud revenue to be in a close 3rd with AWS, Google, Microsoft with new business. They are cannibalizing mainframe software revenue and calling it 'Cloud'. If you are outside of the mainframe space, these accounts pay millions per month in software licensing costs which increases 'cloud' revenue quickly. Once they get enough of the top 250 on board, they finally shut down R&D on new mainframes (if they have not already done so) and ride out the revenue stream in perpetuity. Fewer employees needed to support this model, as there is nothing left to sell, does the electric utility have sales or support people? All they need are repair people.
Does IBM really count mainframe under Strategic Imperatives? They sure don't treat their mainframe people like anything that matters.
Kind of agree with -bnr. IBM has good vision but not execution. IBM business is still depending on legacy businesses such as mainframe license, middleware, on prem software. Putting these businesses under Strategic Imperatives (reporting wise) is just an illusion of growth. Strong growth in Cloud? Ask those customers how many are SLR (license audit) vs truly delivering values to customers?
That sounds like the logical assumption. I would say Apple might be a contender with Google for that merger. Dominant player in the B2C space but is not too prevalent in the B2B market and AI to go with their products. Ginni and Tim seem to be buddy buddy as of late.
IBM is a cash cow. (mostly related to Legacy). As such The current management is moving the legacy to cloud and dumping the head count as quickly as possible. What is the end game???
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Right size IBM to cloud via dumping heads
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Offshore all labor intensive accounts
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Spin-off IBM India once they own all labor intensive accounts
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Merge IBM with a company who “needs” Enterprise entry and some AI and patent expertise. (google jumps to mind)
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Drinks and options for all of the executive team
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FYI this is John Akers plan 25 years later. (net net when you run out of ideas piece the parts out for as much as you can get)
There's not much to IBM to attract anyone else. It's decrepit old technology products and failed attempts at building new tech products (API, mobile, cloud, AI) that are way behind the competition. Maybe someone will buy the blockchain tech but that's pretty ubiquitous now and nobody knows if there will be any significant profit in it for some time yet.
The board and exec team know this, they're just cooking the books to stretch it out for as long as they can, raiding the coffers while the ship slowly sinks into the tarpits of tech to join Xerox, Kodak, and others who did not innovate and did not realize the value of a loyal and motivated workforce.