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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.
(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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