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Ask HN: What's going on at IBM?

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Re: Ask HN: What's going on at IBM?

#61

Post by Ologn »

Afforess wrote: post #15

IBM is suffering the fate of OPEC countries, except with technology. IBM wasn't diversified. (Sure, IBM has lots of products, but it usually sold licenses to all these products in large bundles, rarely did anyone buy just DB2, rather, agreements purchased entire ecosystem of IBM software/hardware). IBM was built on a single golden goose "massive multi-million dollar agreements with Fortune 500 CTO's for thousands of…

> So the legacy IBM is dying on the table

If it is dying, it will be a slow death. IBM spent decades entrenching itself in government and Fortune 500 enterprises.

The 23 year old Ruby-on-Rails coder sitting at his desk in his unicorn's open floorplan office in SoMa may not be aware of it, but there are a ton of IBM machines out there in the world right now, running programs written in JCL, Rexx, Cobol, PL/I, and Fortran.

The first z196 mainframe to roll out six years ago went to Citigroup ( http://www.informationweek.com/it-leadership/global-cio-ibms... ). With the pressure for increasing quarterly profits and other priorities, why would Citigroup decide to spend a fortune to upgrade their ancient legacy systems, hoping that there won't be too many bumps along the way? IBM makes it easy for them to keep their legacy systems around - it's much cheaper, and it works. The systems have worked for decades actually.

When JPMorgan Chase decided to start cutting down on their IBM usage twelve years ago and start doing more IT in house, they had to strike a deal with IBM to hire about 4000 IBM IT workers ( http://www-03.ibm.com/press/us/en/pressrelease/7294.wss ). Since JPMC just put up a job posting ( https://jpmchase.taleo.net/careersection/jobdetail.ftl?job=1... ) looking for someone with "Expert Skills in IBM-Z/OS COBOL, CICS, VSAM, JCL, MQ, DB2 SQL, Assembler and Stored Procedures", I'd guess some of those systems are still in place.

Note the location of the job. Tampa, Florida. Not exactly the center of what's young and hot in the tech world. More like the kind of place an IBM old timer might go to retire, before he decides he was bored and would like to stick his hand back in and get some work. This JPMC job ( https://jpmchase.taleo.net/careersection/jobdetail.ftl?job=1... ) looking for "Experience with z/OS ISPF, JCL, and JES2" is in Bangalore. Not the center of tech, but plenty of people out there are working on these mainframes and with languages listed in the job listings like JCL, REXX, Cobol etc. These jobs are all at a bank which tried to start weaning itself off IBM twelve years ago.

Governments and Fortune 500 companies have plenty of IBM mainframes out there running, often with code written half a century ago in PL/I or the like, running business processes which are still used, and they're not going away any time soon.

Re: Ask HN: What's going on at IBM?

#62

Post by contingencies »

I'm surprised no comments here mention containers. These are a great example of where IBM absolutely screwed itself. Most of the kernel features for containers and the initial release of LXC were done on IBM's dime. The two major developers (one focused on kernelspace, one on userspace) then left, at least one of them for Ubuntu, I believe. I know this because I was in touch with them and using LXC personally about 2009-2010 before the docker hype era.

As I comprehend it, the features were originally intended to allow fat mainframes to dole out tiny resource portions for distinct jobs. As it seems to have turned out, every CPU these days is the equivalent of a fat mainframe, and the greater challenge is around integrating this form of rapid SOA micro-provisioning in to developer workflow through tooling and education. I just upgraded this few year old Macbook Pro to run Docker 1.1.0: 200MB Linux ISO + Virtualbox + kludgey go wrapper = better solution than IBM ever provided. With a different management culture, they could have released this in 2010, pre-empting stable docker by 5+ years with a kernel commit history and adequate marketing funding.

Re: Ask HN: What's going on at IBM?

#63

Post by dh997 »

samstave wrote: post #12
stonogo wrote: post #4

Accountants have taken over leadership roles, resulting in a corporate-wide prioritization of earnings-per-share promises over engineering and logistics.

Blech!! It's too bad that companies like both IBM and Yahoo! didnt do a better job in capturing the startup market given the hoards of cash they both have. Talk about 900 pound gorillas, they got their asses handed to them even though they could have funded every single startup in the valley over the last ten years and not put a dent in their reserves... I'm curious to know why these companies with massive cash stock…

Investing in many startups requires a great deal of judgement and some due-diligence, far more than either IBM or Yahoo were capable... If direct investment were in-house scalable, institutional investors wouldn't invest in VC funds, but it's a very high-risk, somewhat hands-on activity to avoid throwing all money away.

It's not called a warchest for nothing, so although it might give competitors some pause, it does chap investors for not disbursing larger dividends or reinvesting in growth/m&a, and it additionally paints a larger bull's eye on them for capital extraction.

Re: Ask HN: What's going on at IBM?

#64

Post by toyg »

Ologn wrote: post #61
Afforess wrote: post #15

IBM is suffering the fate of OPEC countries, except with technology. IBM wasn't diversified. (Sure, IBM has lots of products, but it usually sold licenses to all these products in large bundles, rarely did anyone buy just DB2, rather, agreements purchased entire ecosystem of IBM software/hardware). IBM was built on a single golden goose "massive multi-million dollar agreements with Fortune 500 CTO's for thousands of…

> So the legacy IBM is dying on the table If it is dying, it will be a slow death. IBM spent decades entrenching itself in government and Fortune 500 enterprises. The 23 year old Ruby-on-Rails coder sitting at his desk in his unicorn's open floorplan office in SoMa may not be aware of it, but there are a ton of IBM machines out there in the world right now, running programs written in JCL, Rexx, Cobol, PL/I, and Fort…

The problem is that being "the legacy vendor" is not a good place to be. Your margins can only get lower. You get a huge runway towards building alternatives, but building alternatives you will have to do.

Re: Ask HN: What's going on at IBM?

#65

Post by TheRealWatson »

Riod wrote: post #9
mathnode wrote: post #7

From my lowly developer point of view. Power may be a bit quicker than Intel, but it's unfamiliar to many. Nvidia is breaking new ground, it's sexy, accessible, and cheaper. On the software side it's a similar story. Why use their unknown proprietary cloud stuff when I can just make use of the plethora python/julia/clojure/R stuff? AWS is fancy and ever expanding, Softlayer is a PITA. IBM biz news http://finance.yaho…

AWS does cater to enterprise customers, but do they have the same one point of contact style service that IBM has historically provided?

Yes, of course. If you are a company, you know your rep.

Re: Ask HN: What's going on at IBM?

#66

Post by Zigurd »

edge17 wrote: post #35
IBMGuyHere wrote: post #14

I've been working at IBM for a couple of years now, started as a grad. What you must be referring to is the stock price, which has dropped from 200 dollars a couple of years ago to like 120 these days. I can't claim to understand this company, I think very few people can. There are 300,000 employees and more teams/products/departments than you can imagine. It's absolutely insane. However, what I can say is the follow…

IBM always seems to be in the process of shifting it's strategy. When I was there around 2006/7, they were in the process of cutting down on R&D, reducing it's footprint in the hardware space, and generally moving towards services (presumably because the margins were very high). I would say it's a large company that's trying to find it's place in the world again. That's not to say they don't make a ton of money, but…

From the outside, that looks like a good summary. IBM found that services are price sensitive, and IBM's name goes only so far in holding off pricing pressure. The question is whether the new R&D efforts will get sufficient resources to build enough value to more the needle. It could be that IBM's move to services is a last move and that things like Watson won't get the resources to be competitive with Google, Microsoft, Apple and other players in deep learning and AI.

Re: Ask HN: What's going on at IBM?

#67

Post by Zigurd »

pdq wrote: post #5

IBM has transitioned into an enterprise services/consulting firm over the past 15 years or so. Their game plan is to get huge $$ contracts from Fortune 50 companies and government agencies, which is a long and costly process. This kind of business is extremely hard to scale, compared to a true software or hardware company innovating and licensing/selling products. IBM does have a ton of resources behind Watson, but t…

A "ton of resources" is relative. Compared to true technology players going after dominance in AI in general, or even in specialized areas like self-driving cars, IBM is not putting a lot of wood behind that arrow. I get the impression that IBM would like to find Watson only far enough to use it to sell services and integration at a higher price.

Re: Ask HN: What's going on at IBM?

#69

Post by tim333 »

According to the CEO the declining revenues are not a bug, they are a feature. From http://www.cnbc.com/2015/11/03/ibm-ceo-said-sometimes-size-m... :

>"In my tenure, I've divested $8 billion of businesses," Rometty said. "The point was, they weren't about the future of where we were going."

>Rometty cited an example of a recent divestiture in hardware — making semiconductors. Now, only 10 percent of IBM is comprised of hardware.

see also their pdf on the same http://www.ibm.com/annualreport/2013/bin/assets/ibm_ghv_marc...

Re: Ask HN: What's going on at IBM?

#70

Post by GFK_of_xmaspast »

IBMGuyHere wrote: post #14

I've been working at IBM for a couple of years now, started as a grad. What you must be referring to is the stock price, which has dropped from 200 dollars a couple of years ago to like 120 these days. I can't claim to understand this company, I think very few people can. There are 300,000 employees and more teams/products/departments than you can imagine. It's absolutely insane. However, what I can say is the follow…

> many people have been working at IBM their whole career (20-30-40 years)

The first huge layoffs at IBM were something like 25 years ago, presumably the people at least at the lower end of this scale would be used to things getting disrupted by now.

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