I know we are seeing a lot of layoffs, but even so, we are still one of the biggest employers in the world. We might not have job security individually, but I think as companies go, we know IBM will be around for a long, long time.
Many other companies in our field can't say the same thing.
7pmh. I believe IBM very much values the Mainframe. It’s an annunity that just keeps on giving. What IBM doesn’t value is the USA and EU skill set to keep the Mainframe running. So what is a CFO to do??? My guess is to breakup the Mainframe skill set into “cheaper” pieces. SO SW support goes to India, HW manufacturing goes to a USA based commodity manufacturer, research goes to the IBM labs (where most can also be in India), as a service goes to India EXCEPT for Govt contracts which will remain based in USA and EU data centers. 90% of the support for Mainframe will reside in India. NOW thats what I call farming an annunity Lower costs 75% by going to India, and keep the annunity running for years
It’s GE, without the medical devices or jet engines
-5lau, you are telling the truth. But truth aside, IBM does not value the mainframe. Mainframe experts are old and expensive and that does not fit with the IBM staffing model. IBM would sell that business in a heartbeat if it could.
5rkd,
The Internal Revenue Service's Master File systems that receive taxpayer data and dispense refunds run on a 50-year old IBM mainframe. The DOD's Strategic Automated Command and Control System that coordinates U.S. nuclear forces runs on another 1970s-era IBM computer system. Some of Immigration and Customs applications run COBOL on IBM mainframes as does the Veteran Administration's Time-and-Attendance tracker. (Ref: https://www.gao.gov/products/GAO-16-696T)
Despite IBM's hyping of cloud and AI, it could very well be the humble aging mainframes that make IBM anywhere close to being "too big to fail".
"Too big to fail" does not refer to the size of the organization. It means if the organization failed, the damage done would be too great to withstand. So the question is: if IBM disappeared tomorrow what damage would be done? Employees would obviously be hurt but IBM doesn't care about them. Mainframe customers would be hurt but IBM has been de-emphasizing them for decades. So would any of the "strategic" areas of IT even notice IBM was gone? Would the AI world be destroyed? Would the cloud world take a major setback?
4leb. Amen. Until the leadership and vision return, I believe IBM continues on the financial engineering games treadmill. My guess is Mr Buffet asked the same question we just did (what is your vision and how are you going to get there). When the crickets kept chirping he sold. We as a company are well past due for a top down executive leadership change. Ibm continues to layoff citing “new blood/new ideas”. PLEASE tell me where the new blood or new ideas are in the executive ranks. Financial engineering doesn’t feed the bulldog
As the saying goes, size doesn’t matter… So IBM has a bunch of strategies (strategic initiatives in their lexicon) but in support of what objective exactly? The purpose of a strategy is to help achieve a specific goal, but other than propping up the share price or earnings per share what is IBM’s fundamental goal?
Any fool can prop up a share price - if you have say a billion shares at $12 per share then you are notionally worth 12 billion dollars. If you keep buying back shares to disguise poor performance you can play this game right down to there being 1 share left worth $12. Share price maintained - well done, have a bonus.
Unless someone can enlighten us as to IBM’s core objective then their strategies amount to arbitrary platitudes and they will fail - probably quite catastrophically as large, incompetently managed companies are prone to do (Carillion in the UK for a recent example of so called too-big-to-fail).
The only remedy is to replace the hubris and greed at the top with vision and leadership, but I’m not holding my breath.
3cny. Yes you are correct. What is strategic???? Just list Ginni’s 5 strategic initiatives, and you can rank them. 1. Cloud (yep), Analytics (again yep), mobile (nope), Social (nope) and Security (yep). Will these change. Of course they will, but that’s the nature of technology. Things are always in flux. Security was on the edge until folks discovered that hacking was far more prevalent. Now it’s making a pile of money for IBM and everyone else. Will IBM ever get back into social. Only via the AI datamining aspect. Will IBM every get back into mobile. Only via forming an IP deal with Apple and again that will most likely center around AI. Does Apple have a vested interest in getting into “enterprise/fortune 250 accounts”. You bet they do, so they have an interest in IBM. Same with Google, but they have made a second bet via Power and AI. Are services strategic??? Yes they are, but only from the point of view of “as a service” (technology wise) and not from the point of view of outsourcing (personnel wise) So what does the last statement of “as a service” say about IBM’s HW division. It says IBM wants to design HW, and make money from the IP of HW, BUT not sell HW (per se), BUT rather rent it via “as a service”. IBM loves HW as a “legacy, IP, and Performance point of view”, but they hate having to staff to sell it. So what is a CFO to do??? Rent it jumps to mind, and “as a service” fills that void. So let’s get back to “strategic”. What does IBM view as strategic??? I would say that which can be automated, lower personnel costs, gain advantage performance wise, or legacy wise, be sold/rented IP wise, or offer entry for another via partnership wise. Everything else is viewed as too low margin, or “non-strategic”. Does IBM have a handle on this??? Perhaps, but that assumes the current management Has their hands around what the market place currently views as strategic, or what the marketplace is evolving to
Is this a layoff site? To say well we might not have jobs but IBM is too big to fail sounds like a second rate trolling attempt on this site.
-2ogr says the new IBM will keep the strategic, Problem is, nothing is strategic. Some things are called strategic but then suffer crippling layoffs. Other things are called strategic but then just disappear. If IBM ever makes up their mind about what is strategic maybe it won't be in this mess.
Anyone who's still wanting to back to the glory days of hardware sales isn't living in reality. Dead. Gone. Power and storage are nits, and they aren't coming back. That's not a strategy problem, the market chose and IBM lost. The strategic mistake wasn't selling them off when they sold x.
2aaa. Be patient. Bain is working on the split off of services. The new IBM will keep the strategic, with the rest going to the split off. Expect the new IBM to make an announcement (acquisition) within 1 year of the split off
IBM is the new AOL
The company (especially services) needs a reboot in order to really be competitive again.
Hopefully services is sold off to a company who has no problem cleaning up the real waste.
ex. how many different tools we use to record our time? Embarrassing
The company has been dying a slow and agonizing death for years. You can thank Sam Palmisano and current CEO , Gini Rometty for being continually slow to market. Those 3 letters no long mean much of anything, the tarnish on them is thick. Very sad to see but until Gini is relieved of her duties, the slow death will continue.
IBM? Not even on our leading competitors radar as a server option. Most don't even track IBM. The dying IBM I and AIX markets will not sustain the company, or even the systems division.
POWER9 is interesting, but the cost of converting is not economical, and sales show it. The bulk of the POWER9 line is selling to the installed base, which is bleeding at a very impressive rate.. "Z" is already fading on the recent upgrade cycle.
Marketing is talking to themselves, in a bubble that echos what they want to hear. Marketing management is more concerned with equality, LGBT rights, and political statements than executing a winning strategy.
Our own SVP & CMO is tweeting support of the latest Nike campaign. CMO is highlighting the G-- Pride Parade. All valid and reasonable causes, but not appropriate for business posts. Overpaid executive dolts, totally ignorant to the world outside their limited worldview.
No matter how you feel, it is totally ignorant to push a personal agenda on a business website or Twitter feed. You risk alienating some 50% or more of our customers who have different views. Seriously, keep your personal opinions to yourself. Most of us don't care what you think personally, and the rest who do might be potential customers.
Bunch of millennial newbies being hired who are clueless. "We can sell a massive cluster with digital marketing plays"... Right. Good luck with the next email campaign. Make sure you get the right number of marketing qualified leads. Fruit of a poisoned tree.
IBM, the next "Too Big to Fail" dinosaur on the chopping block. I am hanging on, but realistically I don't see much of a future. Sorry... guess I am bitter after seeing many of my long time friends getting RA notices.
RANT / OFF
No company is too big to fail. Some like IBM just die slowly and that is their current trajectory.
Remember Kodak, Eastern Airlines, etc?
Did the original post come from an IBM marketing brochure? The stumbling, bumbling, aimless, rudderless, pointless thing we now call IBM might exist forever, but it will never again be important to anyone.
IBM failed their works crossing a line by going after older workers and kicking them out. They have no strategy and lag behind getting to the market . Only a matter of time before they start to cut up the company.
To big to fail - well, Enron was big. WorldCom was big. Bear Stearns and Lehman were big. original post seems written by IBM shill or eternal optimist. IBM may not die but it is collapsing like a class M start.
To whomever asked the question, " Is IBM too Big to fail", I am about to give you some very bad news so I hope you are sitting down. IBM is dead.
I know that the Marquee on the building you work in might say "IBM" but it not the real McCoy. It is a cheap imitation of the once great company that has become the victim of identity theft.
R.I.P.
I think they are bound to fail
Legacy support is seeing RA's galore, its obviously dead in the water.
I have to agree with HBM. It’s not a size problem, but rather a “what do I want to be when I grow up” problem. CAMSS has morphed into Cloud, Analytic’s/AI, and security. Mobile, and Social are toast. What’s interesting is the three winners listed above are successful due to their dealing with proprietary OS’s (can you say Z/MVS for cloud, and Power (LINUX) for AI). Security wins due to legacy knowledge. Does anyone buy Intel cloud from IBM??? We have not heard about softlayer and it’s success in a while. Intel cloud is owned by Amazon. Intel propriatary SW is owned by Microsoft, and Intel AI is owned by Google. Will IBM break up??? The security analysis think yes. How IBM decides to maximize shareholder value is the question. Remember IBM is pursuing a fortune 250 strategy and their go to market “niche” is built around Z and Power HW wise, SW wise and “As a service”) Everything else outside of Fortune 250 strategy will have to be evaluated and will most likely be sold or spun off. IBM India (labor intensive). It’s been nice knowing you. IBM fortune 250 (niche HW and SW as well as “as a service”). Welcome aboard. DONT forget we want to hire you as long as you are cheap. Again it’s a rush to the bottom cost wise. So do the math and figure out how the current CFO maps a path forward that maximizes share holder value. That’s the path forward and nothing will slow it down
Sure, someone will have to sell mainframes every 2-3 years for decades to come. But as for the rest? Services is a low-cost commodity business that has terrible margins, hardware is the same. IBM missed the cloud boat by years. Security is dying from lack of investment. Analytics is just old stuff repackaged. When an elephant dies, the fingernails keep growing for a while, but the carcass stinks.
I disagree because IBM's problem is not size. IBM has no strategic leadership. They picked the five SCAMS "strategic initiatives" a few years ago. Since then they have gone from five to two. Cloud is still around but IBM will never be more than an also-ran. Watson is getting a horrible reputation as overhyped and underdeveloped. There might be a company called IBM "for a long, long time" but no one (including IBM itself) knows what it will be or even what business it will be in.
Nobody knows the future but weighing up all the evidence that I see, read and hear .... I think IBM will / has failed and it's too late to recover. Over the next few years IBM will in my opinion be broken up and sold off until only a small entity named IBM remains. So I guess in that scenario IBM will still exist, but the company we know today will be all but gone. Bit like Kodak I guess.