Robert X. Cringely has a new ebook out, The Decline and Fall of IBM. Cringely believes that IBM is in deep trouble and has been since before the Great Recession of 2008. He also says that the company has probably been doomed since 2010.
On Sunday, Cringley was interviewed on the nationally syndicated talkradio program Moneytalk. Program Host Bob Brinker pointed out that Warren Buffett bought almost $11 billion worth of IBM common stock, then asked Cringley "what did he miss?" Cringley answered that IBM is in a downward spiral because it is focused on maintaining and increasing earnings per share (EPS). IBM is borrowing money to buy back shares, propping up EPS but adding debt. IBM's debt has tripled in the last 5 years.
Cringley also told Brinker that IBM has gone from hardware sales to selling services but they have poor customer retention, having lost the state of Texas and The Walt Disney Company. Their sales culture tends to bid low to win the contract and then extract more dollars by selling extra services. IBM also lost a contract with the CIA to Amazon. A person who called-in to the program pointed out that IBM lost its leadership in product development, lost sales of its core products to Fortune 500 companies, and its software business is eroding because of open source applications. Cringely concurred with the caller and told him "you made my point."
A summary of the interview is available here.
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El Reg reports
IBM's chip chaps make fine product, but not so fine or in sufficient volumes to turn a profit. Big Blue is believed to leak a billion or two dollars each year.
GlobalFoundries was touted as a likely destination for IBM's unloved chip biz, but the deal fell through.
Bloomberg says that's because GlobalFoundries wanted $2bn in cash, a sum it deemed sufficient to stem losses while it turned things around.
IBM wasn't willing to dip that far into its pockets to make the deal happen, so everyone retreated to square one. GlobalFoundries carries on as usual. And IBM keeps trying to figure out what to do with an asset it doesn't want, but can't give away.
(Score: 1, Interesting) by Anonymous Coward on Tuesday August 05 2014, @11:28PM
When the banks start to upgrade their gears, IBM will have fallen off the cliff.
(Score: 3, Interesting) by fadrian on Wednesday August 06 2014, @12:01AM
I'm sure it can die one more time on the way to its final place of rest. Hell, I'd give it three or four more deaths. Big companies have so much inertia they don't stop so quick, unless actual corporate malfeasance is in play (e.g. S&L scandal, Enron, AIG, etc.). So because IBM is such a behemoth it also gets to be be the corporate cat with (at least) nine lives.
That is all.
(Score: 5, Insightful) by Nerdfest on Wednesday August 06 2014, @12:18AM
If it wasn't for the "we always buy IBM" crowd, they would have been dead in the 90s. There are still lots of those types around, trying to force Jazz or DB2, or RAD on developers and admins that would rather have the free, open-source tools. The problem of course is that open-source doesn't buy golf vacations for purchasers.
(Score: 2, Interesting) by PapayaSF on Wednesday August 06 2014, @02:13AM
I think that's true, and that the recent arrangement with Apple is a bigger deal than many (including Cringely) think. Lots of people in enterprises are already using iPhones and iPads. If IBM can write decent iOS software that connects to their enterprise offerings, they won't die quite yet.
(Score: 4, Interesting) by cafebabe on Wednesday August 06 2014, @08:45AM
I interpret the matter differently. Apple, Motorola and IBM had the PowerPC allegiance which worked quite well until games consoles dwarfed Apple's purchasing volume. This stalled the development of G5 mobile processor. Out of desperation, Apple switched to Intel. (Given this occurred during Pixar's reverse merger into Disney, Intel's superior DRM may have been a financial consideration for Saint Steve.)
Anyhow, Apple is being destabilized by suppliers again and is returning to IBM. In this case, Foxconn intends to run one million robots which can each produce 30,000 products of iPhone6 complexity each year [soylentnews.org]. If this works, Apple won't survive as a premium brand. Indeed, the plastic iPhone5C already shows that Apple is losing premium appeal. This could accelerate. Despite huge and deliberate incompatibilities, a proportion of people freely switch between mobile OSes at each opportunity.
Actually, things are going badly for quite a few brands. With the exception of games, Microsoft is distinctly in maintenance mode. Google has search but is otherwise retreating. Amazon is losing margins. And Facebook's impending crunch is cheered by many of its active users.
TL;DR: Now that hipsters are unprofitable, Apple does a deal with the ultimate squares.
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(Score: 1) by PapayaSF on Wednesday August 06 2014, @05:16PM
I agree that Apple switched from PowerPC to Intel partly out of frustration with IBM and Motorola, but it also allowed Apple to benefit from Intel's vast economies of scale. Overall, it was positive for Apple.
I don't agree that "Apple is being destabilized by suppliers again." Foxconn's robots are a sign of Apple's continuing success, not a sign that they "won't survive as a premium brand." The iPhone 5C is more "affordable quality" than "loss of premium appeal." As for switching mobile OSs, there's plenty of indications that most Android buyers are first-time smartphone purchasers, and that many later switch to iOS.
In short: Apple is still very profitable, the brand is not in decline, doesn't depend on "hipsters," and the deal with IBM is not a desperation move for Apple (though perhaps it partly is for IBM).
(Score: 2) by cafebabe on Wednesday August 06 2014, @07:14PM
In the 1980s and the 1990s, Apple had problems with supply and demand; either manufacturing too many units or not enough. Apple has improved significantly here and would not be so successful without this experience. However, as Apple has grown, it has become a whale in the market. Apple's volume orders for 22nm processors locked out competitors. There's only a finite capacity for 22nm and Apple contracted a chunk of it to the detriment of other brands. Also, the screen size of forthcoming devices is among the highest category of commercial secret because it hinders copycats.
Apple learned mistakes in lucrative niche markets and is now using the economics of scarcity to its advantage. However, it is accustomed to being near the top of the pyramid. The Foxconn Foxbots could be a significant problem. If one factory in China can make 30 billion devices per year, Apple cannot lock-up that manufacturing capacity. So, any rival can have phones manufactured to the same quality. Furthermore, this would cost less than Apple's current contracts. Potentially, final assembly labor, electricity, packaging and shipping could be less than US$2 per phone. Unfortunately for Apple, that price will apply to any party which contracts in sufficient volume.
So, now is the time to stop replacing metal parts with plastic (in five colors, like the second generation iMac [wikipedia.org]) and find another premium niche.
You'd think that app and music purchases would encourage loyalty. However, nothing currently listed in the app store will run in three generations unless it is re-developed, re-compiled and re-validated. Likewise, every crunch, theft, loss or out of warranty failure decrements the DRM on apps and legacy music. So, the value of investment decreases with each incident. It doesn't matter if you're rich, poor, careful or careless, the value of the investment depreciates significantly after five major incidents or three generations.
Although Apple customers earn the most, are most likely to purchase an airline/cinema/theater/concert/festival ticket, book a taxi, eat at an expensive restaurant and purchase films/television/music/apps, all platforms have high churn and Android is gaining [soylentnews.org].
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(Score: 1) by PapayaSF on Wednesday August 06 2014, @08:00PM
I think you are looking at this in an odd way. "Unfortunately for Apple, that price will apply to any party which contracts in sufficient volume." Apple now does volume like nobody else in the industry. The fact that Foxconn is expanding will help Apple the most, not their rivals, because Apple does the most volume, and will continue to do so. Apple being "a whale in the market" is working to their advantage, at least so far.
Apple inspires loyalty not because of hipsterishness, or lock-in, or even app purchases. It inspires loyalty due to quality of software and hardware design and manufacture. Android has been gaining but that process has slowed, if not halted and reversed in some markets. There seem to be more Android-to-Apple defectors than the other way around. Besides Samsung, Android device makers don't seem to be making much money, and even Samsung seems to having some trouble these days.
(Score: 2) by cafebabe on Wednesday August 06 2014, @10:04PM
I hope I'm not looking at this in an odd way but perhaps I am privy to different information. I'm glad that you've mentioned Samsung because I find it mildly amusing that while Apple and Samsung have been suing and counter-suing each other, releasing similarly named products and confusing judges, Samsung has been variously selling LCDs, processors [ifixit.com], RAM and other components [ifixit.com] to Apple. And some of the other components are bought from common suppliers. I'd be wholly unsurprised if Samsung could obtain the parts for an iPhone at less cost than Apple. Admittedly, that doesn't cover OS design, circuit design or assembly expertise but Samsung is the pinch point for Apple's components.
It may be that Android is always unprofitable for manufacturers and that Samsung only looks hopeful because it profits from every iPhone sale. However, if one could pull ahead, it would be Samsung. Samsung's pinch point is assembly. Foxconn is the most reliable at this level of complexity and they're planning to increase capacity, increase quality and decrease price. That leaves Samsung with zero out of four major manufacturing bottlenecks (LCD, processor, RAM, assembly) and Apple with three out of four. (Perhaps IBM can help with processors?) Apple is ahead in all areas of design (OS, chip design, board layout, construction considerations) but that may not be enough.
Android looks like an explosion in a widget factory and has worse security but, apparently, 44.62% of users had it foisted on them, bought something random, compromised on price, wanted to deploy Android software, wanted something outside of Apple's product range, had a bad experience with Apple or had another reason to choose another brand. It may be that people buy Android and then switch to Apple when they become more discerning. However, if you're not in the fastest growing segment of a growing technology market then you're going to be squeezed.
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(Score: 2) by Thexalon on Wednesday August 06 2014, @02:44AM
Hey, if getting caught cooperating with Nazis didn't kill it, pretty much nothing will.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2, Informative) by sudo rm -rf on Wednesday August 06 2014, @10:47AM
Just like Coca-Cola [wikipedia.org] or Kodak [duckduckgo.com] or Ford [adl.org]Motor Company [wikipedia.org] and so on....
(Score: 1, Interesting) by Anonymous Coward on Wednesday August 06 2014, @12:05AM
I think Sears could be lumped in here with IBM--just for another example. They contracted terminal gangrene years ago, but they're so large, it takes a long time to spread throughout the system.
(Score: 2) by WillR on Wednesday August 06 2014, @01:54PM
(Score: 0) by Anonymous Coward on Wednesday August 06 2014, @12:20AM
Most everything he said about IBM applies to HP too.
Especially with their $14B acqui-merger with Ross Perot's old consulting company, EDS.
(Score: 1, Interesting) by Anonymous Coward on Wednesday August 06 2014, @12:48AM
Forget HP, have you noticed that Dell fell off the map? Since they went private our sales rep has changed at least 4 or 5 times (to the point I don't know who they are anymore). We opened a service call for next day business support that took 5 business days for their subcontractor to even call and schedule the visit (after calling Dell 3 different days to state we hadn't received service next day). So the big selling point Dell used to have in the 80s and 90s (great customer service) is completely gone and they can't compete on price point with Lenovo or HP, and their sales team is beyond miserable. What is it keeping them afloat exactly?
I have to agree about the Sears comments too, and as for IBM services, well let's just say I've been watching the same UPS battery replacement light and half-dozen failed drive lights on a rack they are supposed to manage for at least 3 months - the company they are contracting for is one failed drive or power flicker away from disaster, so I don't see them keeping that contract when it is up for renewal.
(Score: 3, Informative) by cafebabe on Wednesday August 06 2014, @09:04AM
Dell is being kept afloat by cluster computing. A large proportion of the Top500 Supercomputer List uses Dell hardware and even moderate clusters are Dell. I presume a large number of hosting companies are also using Dell hardware. In this case, they often sell 100 octocores with RAM upgrades. However, the support contracts are a nightmare.
I was involved with a 4,000 core renderfarm (mostly Dell octocores) with seven node failures. One engineer came to fix five of the nodes. However, the remaining two nodes were purchased in different six month window and therefore maintenance was subcontracted to a different company. It is for this reason that maintenance engineers are very particular about serial numbers. Otherwise, they could spend their time fixing equipment which is not their responsibility. Despite this, the engineers are quite happy to share a common pool of maybe-working, on-site spare parts.
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(Score: 1) by cockroach on Wednesday August 06 2014, @12:29AM
Ever since they started selling their hardware business (mostly to Lenovo) I have been wondering. To me it seems that giving up the ability to sell everything from mainframes to laptops forces your customers to take at least part of their business elsewhere. This can't be good for customer retention...
(Score: 3, Interesting) by bzipitidoo on Wednesday August 06 2014, @01:22AM
It seems that for a decade or more IBM has been trying to change from a hardware to a software company. And not a classic software company that sells copies of software, but a seller of software services. Last time I looked over their job openings (which was some years ago), all I saw were salesy kinds of positions. They didn't want only technical ability, they wanted tech people to go flying around the world to push software solutions to large organizations. Just why they are trying that is the big mystery.
I mean, it's not like their software endeavors panned out. OS/2 could have been a winner. It was technically superior to Windows. But IBM blew it. They got greedy and tried to extract more "value" out of OS/2 by not including the networking. Customers had to pay extra for that part of OS/2. This was just when the Internet was taking off. Big, BIG mistake. Microsoft bundled IE for free, included networking and a browser, while IBM wouldn't even include networking. To top it off, MS charged less for their package of so much more.
Another disaster was IBM's Office Vision product. It was marketed as the next big thing in increasing office productivity in mysterious ways. There was no telling how much more productive your office would become if only you used Office Vision! The name was of course vainglorious hype, and the product was nothing more than a massively kludgey email client and server. The whole effort showed IBM's remarkably poor grasp of what networking and the Internet would mean. Simple text based email clients ran circles around Office Vision. Oh yes, Office Vision didn't implement any of the developing standards for email, so it couldn't talk with any systems but itself. IBM doesn't follow standards, IBM makes the standards! Not Invented By Me, in spades.
I see no indication that IBM has changed.
(Score: 3, Interesting) by dry on Wednesday August 06 2014, @04:04AM
1994, OS/2 Warp V3 is released with enough of a network stack to support dial-up in an age where dial-up was about the only way for regular people to connect to the internet along with a free browser called webexplorer, mostly DLL based so any part of the system can use HTML along with an excellent gopher client and crappy news reader and email client. Excellent (at the time) email clients, news readers and even third party front ends to the browser are released. By '95 I purchased the red box (no winos2, you had to buy win3.1 separately) for $50, that Windows license made OS/2 expensive.
1995, Microsoft releases Windows 95 without including a web browser, just a front end to their propriety network. Bill Gates goes on record as saying the Internet is a fad.
1996 OS/2 Warp V4 is released, including a full network stack that can connect to most any type of network including the internet, it includes an icon on its desktop to download the Netscape internet client (and refreshes include it) for the same price as Win95.
Microsoft updates their OEM version of Win95 to include their browser with almost the same name as the original IBM browser and also DLL based so various parts of the system can do HTML. MS takes it to the limit and bases their desktop, help system etc on the browser engine.
1998, Microsoft comes out with Win98 which users can purchase and finally includes a browser. IBM ports a newer Netscape.
Warp V3 also included DIVE and DART allowing game designers to more directly interface with the video and audio sub-systems. MS took those ideas and created Directx the next year.
Around 1995 IBM hires Gerstner as CEO, he decides to make IBM a services company instead of producing good hardware and software. MS continues to try for a monopoly with questionable business ethics.
(Score: 4, Interesting) by bzipitidoo on Wednesday August 06 2014, @11:00AM
In the early 90s, I was trying to get a home LAN set up. I tried Lantastic, and while it worked, I couldn't do much with it. I moved to 10 base 2 Ethernet as hubs and switches were awesomely expensive back then. I bought OS/2 Warp V3 for a little under $100, thinking it could do what DOS could not. Nope! It simply didn't occur to me to check that full networking capability was included with OS/2 (why on earth wouldn't it be?), and I was upset when I found out IBM had cheated and fooled me. For an additional $170 or so, I could buy that part of OS/2. Well, after being fooled like that, the last thing I was going to do was pony up more money and find out IBM had left out something else. Couldn't return OS/2 either, thanks to the policy of no returns on opened software packages. Tried a commercial UNIX clone, Coherent, but found it had such limited hardware support it wouldn't run on anything I had. Couldn't so much as install it, as it couldn't talk to my hard drives.
Yeah, I remember Bill Gates pooh poohing the Internet. Was one of the stupidest things he ever said. Ranks up there with 640K being enough memory for everyone, which he denies he ever said.
I also tried Linux (Slackware, kernel version 1.3), and found it had it all, except games. All the capability I wanted for LAN and WAN. Support for most common hardware. And a C/C++ compiler! A compiler, I might add, that wasn't a bug infested piece of crap like Borland Turbo C++ 2.0, another piece of software I regret paying good money for. And Linux was all free, and open source. Windows 95 with IE was a better deal than OS/2, but on networking, development, openness, capability, reliability and price, Linux blew them all away. After that and a few other experiences (like the makers of Master of Orion 2 bragging about LAN play and then shoving it out the door before that part of the game was finished and trying to claim it was an innocent bug or two preventing LAN play from working), I never paid for commercial software again if I could help it. Got stuck paying the Microsoft tax several times, though I tried to avoid that too.
(Score: 2) by dry on Thursday August 07 2014, @04:05AM
Yea, IBM made some weird decisions, or perhaps just targeted getting the most money from business. If you had been a bit later you could have bought Warp Connect which was Warp V3+MPTN or you could have installed the fixpak for MPTN which would have given you full networking though unlicensed.
My first Linux also was Slackware 1.2 with the 1.3 kernel and yes it worked well after recompiling the kernel and setting up X, I liked some of the games (rocks'n'diamonds) as well. At the time it was fun and interesting. I still ended up going back to OS/2 which also had a decent GCC port as well as real X11R6, version 3.3 so it wasn't hard to have multiple desktops, WPS, Winos2, and X
(Score: 0) by Anonymous Coward on Wednesday August 06 2014, @11:59AM
In other words, the decline of IBM started 1995.
(Score: 4, Interesting) by VLM on Wednesday August 06 2014, @12:18PM
"Last time I looked over their job openings (which was some years ago), all I saw were salesy kinds of positions. ... Just why they are trying that is the big mystery."
One of the largest offshore dev firms in the world. Basically abandoning USA for all STEM occupations and moving to India. STEM need not apply to IBM in the USA its an India only thing.
Their play is that in the rush to India / China they'll do better with Indian software than Chinese hardware. In that narrow question they're almost certainly correct.
I've been toying with the idea of leaving the USA after my kids are grown. Nobody in the USA wants to hire STEM people but the demand is pretty high in civilized, or at least civilizing, countries. Better medical, etc. Living in India would be weird, but plenty of British did it a century ago so I figure a dude from USA could handle it. I imagine the paperwork is a PITA.
(Score: 2) by bzipitidoo on Wednesday August 06 2014, @05:38PM
Yes, I agree that the US has lost a great deal of respect for progress, science, and facts, and leaving is an option to think about. IBM is perhaps merely a symptom or victim of this trend. Same with the Republican party. Maybe progress sows the seed of its own destruction by making life so easy it allows idiots to do stupid stuff and not suffer for it. One of the stupidities they do is stifle progress. Just got told this morning by some door to door Jehova's Witnesses that no one knows how old the Earth is, but humans have only been around for 6000 years. Obviously, those are not people to count on for support of scientific endeavor.
But where to go? Where is it really better, and not an illusion of the "grass is greener on the other side of the fence" variety? How about Brazil? As I recall, RMS praised Brazil for being among the most supportive towards libre software. I also hear Brazil is very corrupt.
(Score: 2) by VLM on Wednesday August 06 2014, @05:53PM
Might be language issues. I could move to Ireland or generally speaking former british empire territory.
"Where is it really better, and not an illusion"
Well, where I live has a formal official policy of helping export as many STEM jobs as possible, so it can't get much worse than the USA...
(Score: 1) by Hairyfeet on Wednesday August 06 2014, @02:50AM
While they have screwed themselves several times over with bad management I'd argue that the X86 sale was NOT a bad move and here is why....X86 systems have become a commodity and everybody knows it. Apple can get away with top tier prices because of OSX and even they have only been able to carve out a teeny niche, with IBM only having Windows other than the clitmouse they really had no way to distinguish themselves from everybody else.
ACs are never seen so don't bother. Always ready to show SJWs for the racists they are.
(Score: 3, Interesting) by mrider on Wednesday August 06 2014, @03:58PM
You make an excellent point.
I would say the original summary touches on why nobody wants to work with them (this is related to your "bad management" assertion). The problem is that they low-ball their price to get in the door, and then every fucking time you turn around they are hitting you with an extra charge. "Oh you want me to plug into Ethernet port 7 instead of 9, here's a change order". That's why a 7 Million contract winds up costing 20 million by the time they're done. They are also another one of the contractors that attract you to the contract with world-class talent, and then once you've signed they send the flunkies to actually do the work.
Doctor: "Do you hear voices?"
Me: "Only when my bluetooth is charged."
(Score: 1, Offtopic) by Hairyfeet on Thursday August 07 2014, @12:27AM
In case you haven't noticed my little cyberstalker has figured out how to game your system, he is getting dozens of modpoints which he is using to try to modbomb my account. You might want to check the mod history and compare it to IP addresses because i think you'll see a pretty easy to spot pattern.
ACs are never seen so don't bother. Always ready to show SJWs for the racists they are.
(Score: 2) by aristarchus on Wednesday August 06 2014, @02:05AM
Robert X. Cringely has never been wrong before. Except when he was.
(Score: 1) by negrace on Wednesday August 06 2014, @02:17AM
* IBM had many failures recently (banned in Queensland, banned in some middle-eastern country, losing customers, the NSA scandal, etc).
* Internally they are in shambles: many levels of management, horrible business processes (like three levels of approvals to get a new pencil or a mouse), idiotic sales strategies, massive layoffs.
* Everything they do now is to maximize Earnings/# of shares. So they cut costs like crazy (stupid execs cannot grow revenues, their revenues have been dropping for like 9 or 10 quarters in a row now), and they take on massive debt to buy back they own shares.
It will probably take some time(3-15 years), but it easily might crash and burn like Dell did.
(Score: 4, Interesting) by dcollins on Wednesday August 06 2014, @02:37AM
Doesn't IBM have the largest patent portfolio of anyone? So it seems like the end-game, assuming it's on the horizon, would be to shed all the working staff and become the most monstrous patent troll of all time.
(Score: 1) by Linatux on Wednesday August 06 2014, @04:58AM
As long as they can afford to keep up the R&D.
(Are you still a troll if you fairly & reasonably licence your patents?)
(Score: 5, Interesting) by khchung on Wednesday August 06 2014, @02:44AM
I remember reading his column about how IBM is unsustainable since early 2000s, and a bit of Googling found these easily:
2002: http://www.pbs.org/cringely/pulpit/2002/pulpit_20020418_000729.html [pbs.org]
2006: http://www.pbs.org/cringely/pulpit/2006/pulpit_20060518_000897.html [pbs.org]
2007: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070511_002058.html [pbs.org]
Not to say his reasoning is wrong, but is it still "news" about the same guy saying the same thing he has kept on saying for the past 12 years?
(Score: 0) by Anonymous Coward on Wednesday August 06 2014, @04:37AM
Well, you'd have only made about 3x your money in IBM since 2002, so I'm sure RXC has been completely right so far.
(Score: 0) by Anonymous Coward on Wednesday August 06 2014, @02:44PM
(Score: 3, Interesting) by Anonymous Coward on Wednesday August 06 2014, @07:13AM
Kodak, Polaroid, Pan Am, Comp USA, AOL, Nokia, Motorola, SGI, Sun, Borders, Barnes and Noble, Best Buy, Sears/K-Mart, DEC, HP, MGM, all failed, or were acquired and shuttered save for trademarks and IP, or are on the verge of failing. Only Apple and GM (courtesy of a Government bailout on sweetheart terms) and a few others have chartered an upward course from the brink of disaster.
It can be done, but requires radical changes. Jobs famously retooled Apple from a failing Computer niche maker to an custom, semi-luxury electronics gadget maker (Ipod, Iphone, Ipad) with greater reach and margins. But utilizing the corporate knowledge of how to make stuff easier to use from the computer side.
Most of the failing/dead companies got hammered by technology or social changes. Pan Am never recovered from Lockerbie, Kodak remained dependent on film, as did Polariod (the current revival of the marque is not the same old 1960's company). Compuserve, AOL, Sun, SGI, all got hammered by technology trends and Comp USA, Borders, Barnes and Noble, Best Buy, Sears/K-Mart by social buying trends (online for price shopping or Big Box cut-rate discounts at Wal-Mart).
There are many competitors for IBM, not having hardware and software they control was a mistake, now customers have two vendors and IBM has to compete on price not simplicity of service. Labor has gotten cheaper and various outsourcing Indian places give lousy, but "good enough" service that most businesses don't see the need to pay IBM their min price. They can go lower with Infosys or other outfits.
The only path to "save" IBM would be big, complex super-computers for massive calc farms, or mainframes for massive throughput (like say payroll or taxes or such). But they'd have to control the hardware to provide super-optimized solutions, not just slap a few consultants on the product and say its a win.
(Score: 1) by known on Wednesday August 06 2014, @10:57AM
IBM is Pyramid scheme in Globalization due to https://en.m.wikipedia.org/wiki/Wage_slave [wikipedia.org]
(Score: 5, Interesting) by PizzaRollPlinkett on Wednesday August 06 2014, @11:10AM
As much as I hate people who make sensationalist claims to sell their books, hate the media machine that hypes books instead of reporting real news, and hate promoting this book by agreeing with the author ... well, there's something to this terminal diagnosis of IBM. I've been involved in the IBM world.
IBM will be in palliative care for a long, long time. It's not going to "die" because just about every big company and government agency depends on their hardware and software. You don't see it much in tech news because startups use commodity Intel hardware and open source, but when you get to a certain size, the IBM mainframe is the only thing with the horsepower and throughput to do the job. No one is going to report on a big company doing mission-critical data processing, they're going to report on a new app that sends one-word messages.
IBM can just collect license fees and turn on "dark" CPUs (mainframes ship with extra ones so you can upgrade instantly when you need more capacity). IBM is also immune to outsourcing to "the cloud" because if you're using a mainframe, the cloud is not cheaper than having your own hardware. Even if people do switch to the cloud (there are some commodity mainframe outsourcers, believe it or not) IBM won't sell fewer mainframes. And you're not going to replace mainframes. All those new web apps people are building with J2EE and cool new technologies are calling back into business logic encoded as CICS transactions. Sure, the new stuff is using IBM's Java interface to CICS, but the logic is in CICS. No one is going to rewrite all that.
Where IBM is dying is they've been taken over by professional management, and they treat their employees like disposable resources. This book is not the only place you can hear horror stories. Cringely just wrote them down, but they're floating around. What IBM's professional management does is treat employees as fungible commodities, and gets work done cheap. That's leading to the death spiral of their consulting. IBM is being managed by people who only care about the short term, and it's really affecting the company. It's a pale shade of what it once was.
Having said that, the mainframe market is ultra-mature - like one step beyond maturity into fossilization. There's just not much room for growth other than selling hardware, and that's not profitable. That's why IBM got into consulting in the first place. Companies are just not investing in the mainframe any longer. Software sales are down across the board, and independent software companies are hurting worse than IBM. If customers want to buy, they have a lot of trouble getting budget approval. And not many want to buy.
IBM's software quality has been in decline, too. Mainframe stuff used to be rock solid. Utterly unbreakable. That's no longer true. Now it's a mess of bugs and patches. I know people who know DB2 better than whoever works on it at IBM, and they find bugs and report them to IBM. Things like bugs in the SQL interpreter.
So, yeah, IBM is "dying" and is a shell of what it once was, but the installed base of users is so massive and so important that IBM isn't going anywhere in our lifetime. Some hollowed out version of IBM will keep going despite being taken over by professional management with short-term thinking.
(E-mail me if you want a pizza roll!)
(Score: 2) by CoolHand on Wednesday August 06 2014, @11:01PM
mod up...
Anyone who is capable of getting themselves made President should on no account be allowed to do the job-Douglas Adams
(Score: 1) by stp on Wednesday August 06 2014, @02:17PM
Please take RAD and WebSphere with you.
(Score: 1) by treeves on Thursday August 07 2014, @11:08PM
Don't forget Lotus Notes! ack!!!