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The decline and fall of IBM

cringely.com

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Re: The decline and fall of IBM

#41

Post by seanmcdirmid »

jussij wrote: post #38
seanmcdirmid wrote: post #36

Earlier quoted context omitted.

Let's just focus on today and Cringley's articles. If you can find something wrong with his articles, where something isn't factual, please let me know. But what IBM has been doing: cutting R&D for short term gains rather than long term ones is going to have to consequences later down the line. Also, they are betting big on India at the expense of tech talent in the states...I'm not sure if this will pan out. IBM has…

Guess how they got out of trouble in the early 90s: January 17, 1993 The announcement by International Business Machines, whose corporate world headquarters are in Armonk, that this year it was cutting 25,000 more jobs worldwide and reducing its budget for research, development and engineering by $1 billion may signify that the company will have to initiate the first layoffs in its history. Up to now the company has…

I did my first IBM intern stint at Boca in 1995 (my second at Hawthorne in 2000). Many of the people laid off were hired back, then laid off again. It was definitely a very messed up time (incidentally, OS/2 was moved from Boca to Austin in early 1996 while I was there, many people moving but many laid off). They didn't really get out of trouble with the 1993 lay offs.

IBM culture back then was pretty toxic, and there was a lot of dead weight to lay off. It makes sense that many of those job could easily be moved to India, yeh for them! But now...even the high-end tech people who worked there are moving on to less toxic companies like Google. What's left? A bunch of consultants and a huge insourcing operation in India?

Re: The decline and fall of IBM

#42

Post by matt4711 »

ori_b wrote: post #35
ajross wrote: post #22

Earlier quoted context omitted.

Their share of the tech industry (which they used to utterly dominate at a scale we hadn't seen since the days of Standard Oil) has been on an inexorable downward path for almost three decades now. Yes, they're still large and influential, and even "successful" in a limited sense. But in context I don't think you can look at their recent history as one of ascendance.

They've moved from the original consumer facing businesses that they used to be deeply involved. Their involvement in that industry did nearly sink them in the early '90s, where they were losing money hand over fist. They cut their losses, sold off their PC divisions, and moved on. However, in the high end markets where they can extract absolutely massive margins -- they used to dominate there historically, and they'…

the mainframe / high end server market generates only a small portion of the overall profit at IBM. And it has by far not the highest margin (that would be software and services). Just read the earnings report from last year.

Re: The decline and fall of IBM

#43

Post by seanmcdirmid »

krmmalik wrote: post #10
gallinaponedora wrote: post #7

website is down, the sweet irony... Now haven´t seen the opinion, I'm sure I have read the same already (over and over). IBM is not declining. To be magnanimous, I´d say it is only declining for narrow minded tech people who can see past their area of expertise. They are not investing, they are not innovating, they are cutting jobs in the US, bla bla bla. Well, they've been compounding at over 10% for the investor fo…

Agreed. I can't reach the article as the site is down, so my comment may be out of context, but i do agree they're doing something right. I haven't been following their stock price, but i do take the odd glance at their movements. I was in talks with an employee at a blue-chip here in the UK, about assisting them with their digital strategy. They clearly needed alot of help. Unfortunately a major player swooped in -…

Right! They are mostly a consulting company now (much like PwC consulting was...), and we should judge them as such. As I'm interested in tech R&D, that makes them completely uninteresting to me, and I don't think they should be valued higher than my current employer (Microsoft), but the market works in mysterious ways.

Re: The decline and fall of IBM

#44

Post by babesh »

happycube wrote: post #17
babesh wrote: post #3

This is actually old news. IBM has been in decline for a LONG time.

And Apple Is Doomed(tm)

Interned there a long time ago and built software for an application they bought. From the internal perspective there was a lot of big company politics and mail it in behavior. From an external perspective they buy companies in growing markets and milk them but don't really improve them. The complaint is that they are not pushing the boundaries not that they don't make money. The way I am evaluating them is whether I think that are bringing something new and valuable to the world. Celebrating them is like celebrating record profits from Exxon. Its kind of sad.

Re: The decline and fall of IBM

#45

Post by ori_b »

matt4711 wrote: post #42
ori_b wrote: post #35

Earlier quoted context omitted.

They've moved from the original consumer facing businesses that they used to be deeply involved. Their involvement in that industry did nearly sink them in the early '90s, where they were losing money hand over fist. They cut their losses, sold off their PC divisions, and moved on. However, in the high end markets where they can extract absolutely massive margins -- they used to dominate there historically, and they'…

the mainframe / high end server market generates only a small portion of the overall profit at IBM. And it has by far not the highest margin (that would be software and services). Just read the earnings report from last year.

Sorry, I should have been clearer -- I meant to write "high margin" when I wrote "high end". Services are certainly IBM's bread and butter.

Re: The decline and fall of IBM

#46

Post by ChuckMcM »

Since his sight seems to be down I'm left commenting on the headline [1](sigh) but my guess is that the arguments are the same as they are for the 'decline and fall of Microsoft' or any other company where their relative standing in a market that changed dramatically over their life, also changed the way in which folks perceived them.

Not to get all Grey Beard on y'all but back in the day IBM was the big behemoth and startups like Sun Microsystems or Microsoft even were the challengers. IBM was created when computers filled rooms, businesses ran on paper processes, and "uploading your database" consisted of tens or hundreds of young women typing on mechanical contraptions called "card punches." And they are still here and still making money.

And that last bit is what amazes me. Look at the 'big names' when they started, Rand, Sperry, Univac, Cray, Control Data, Digital Equipment Corporation, Etc. They are on track to become the first 100 year old "computer" company. (depending on when you think of it as becoming one) and they continue to dominate in patents issued.

What IBM has created is a very durable technology corporation, which is up there with Corning Glass and DOW Chemical. Somehow I suspect they will prove Cringley wrong.

[1] Ok so I read the cached copy and as I expected Cringely is extrapolating out from a few point changes into some apocalyptic demise. Previous columnists in Datamation predicted that once IBM's monopoly over peripherals was broken (1977?) they were doomed as well. Didn't happen of course.

Re: The decline and fall of IBM

#47

Post by kragen »

I think the first time I saw Cringely predict the death of IBM, it was in Accidental Empires, where he was confident that their mainframe business, and therefore their entire company, would collapse at the beginning of 2000 because of the Y2K bug.
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