Robert Cringley has just posted an extended essay on how IBM can be turned around.
If there's one company that Cringley understands, it's IBM. He's done his research on this company and apparently has dozens of contacts inside the company, plus many more former employees who departed either voluntarily or as part of an "RA" (Resource Action = layoff).
I expected Cringely to go ballistic when CEO Ginny Rometty dropped a three-part bombshell on the financial markets last week: 1) IBM missed its expected revenue and earnings estimates for the quarter by a huge margin; 2) IBM was selling its semiconductor manufacturing business to Global Foundaries; and 3) Rometty was giving up on the infamous "Roadmap 2015" to $20 earnings/share established by her predecessor, Sam Palmisano, which Rometty had been following diligently since she took over the reins in 2012.
Instead, Cringely reacted in a measured way, writing a pair of short analysis pieces for Forbes; the first on how the IBM server business (the high end business the company retained, not the commodity business sold to Lenovo) will be at a huge cost disadvantage over the next 10 years, even after the sale of the microelectronics division to Global Foundaries; second, how IBM's software and services businesses have been badly damaged by frequent waves of layoffs, so that opportunities for revenue growth too often come from tightening enforcement of software licenses and similar gadgetry.
Now, a week after the announcement, comes the longer reaction piece. Bear in mind that Cringley is a journalist and blogger, not a management consultant or financial analyst, so his advice won't be confused with a bound report prepared for management's eyes only by McKinsey & Co. Cringley's prescription follows...
1. Stop cutting staff, particularly in Global Services. The layoffs are damaging quality and alienating customers.
2. Look for Cloud Computing opportunities higher in the stack, in SaaS (Software as a Service) rather than in the commodity PaaS (Platform as a Service). Look for sales opportunities from smaller customers outside the Fortune 1000 (IBM's traditional customer base).
3. Acquire more business software companies (e.g. Intuit, Computer Associates) to obtain products that can be converted into SaaS offerings for the cloud.
4. Create a mobile app store, not to compete against Apple, Google and Microsoft, but rather to entice ISVs to develop mobile applications for IBM's enterprise and cloud software.
5. Fire Ginny Rometty as CEO
Ginni’s plan to save the company will involve further cuts. You can’t cut your way to prosperity.
6. Ask several members of the board to follow Ms. Rometty out the door.
This reminds me of a curmudgeonly quote made several decades ago by W. Edwards Deming, the statistician and quality guru who is credited for helping to revive Japan's industry after World War II:
Populating management with financially oriented people has ruined this country (USA).
Apparently some folks in Armonk, NY didn't get the memo.
(Score: -1, Offtopic) by Anonymous Coward on Tuesday October 28 2014, @12:00PM
We're pissing away
I don't know what
I'm to say I'll say it anyway
Today's another day to find you
Shying away
I'll be coming for your love, OK?
Piss on me, piss me on
I'll be gay
In a day or two
So needless to say
I'm odds and ends
But that's me stumbling away
Slowly learning that life is OK.
Say after me
It's no better to be safe than sorry
Piss on me, piss me on
I'll be gay
In a day or two
Oh the things that you say
Is it life or
Just a play my worries away
You're all the things I've got to
remember
You're shying away
I'll be cuming on you anyway
Piss on me, piss me on
I'll be gay
In a day or two
(Score: 0) by Anonymous Coward on Tuesday October 28 2014, @12:12PM
What song do those lyrics go to?
(Score: 0) by Anonymous Coward on Tuesday October 28 2014, @02:14PM
The Ballad of Systemd?
(Score: 0) by Anonymous Coward on Tuesday October 28 2014, @04:52PM
FYI http://youtu.be/djV11Xbc914 [youtu.be]