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The decline and fall of IBM

cringely.com

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Re: The decline and fall of IBM

#31

Post by seanmcdirmid »

forrestthewoods wrote: post #25
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.

IBM is the world's 24th most profitable company (2011). Only 23 companies in the entire world - not country but world - made more profit than IBM. Their revenue and profit grows year over year. Any definition of the term "downward path" that includes IBM is useless and provides no value. http://money.cnn.com/magazines/fortune/global500/2012/perfor...

Read Cringley's articles. IBM is great at marketing themselves and creating the appearance of value, but I doubt that they can do that forever.

Re: The decline and fall of IBM

#32

Post by seanmcdirmid »

gavinh wrote: post #21

Ah, I was waiting for Cringely's annual IBM-doom-and-gloom post.

I really don't know why he bothers anymore. IBM is just a consulting company now that makes money but has little to do with actual technological innovation. Its just not interesting anymore as they are irrelevant.

Re: The decline and fall of IBM

#33

Post by ctdonath »

reinhardt wrote: post #24
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.

A downward spiral for almost three decades while still being a multi-billion dollar company is a problem most hip startups would kill to have.

Q: how to create a small fortune?

A: start with a large fortune.

Re: The decline and fall of IBM

#34

Post by jussij »

seanmcdirmid wrote: post #31
forrestthewoods wrote: post #25

Earlier quoted context omitted.

IBM is the world's 24th most profitable company (2011). Only 23 companies in the entire world - not country but world - made more profit than IBM. Their revenue and profit grows year over year. Any definition of the term "downward path" that includes IBM is useless and provides no value. http://money.cnn.com/magazines/fortune/global500/2012/perfor...

Read Cringley's articles. IBM is great at marketing themselves and creating the appearance of value, but I doubt that they can do that forever.

People have been writing off IBM for decades.

If you go back to the early nighties IBM had two or years in a row where it's annual losses where bigger than some countries total income and their share price fell under the $20 mark.

That was around the time with the clone PC where taking off and everyone was predicted the end of IBM and big iron.

Move on 30 years and their share price is now back over $200.

Re: The decline and fall of IBM

#35

Post by ori_b »

ajross wrote: post #22
forrestthewoods wrote: post #15

When I look at their net income (~16 billion) and stock two words that do not come to mind are decline and fall. http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&c...

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're still dominant, and raking in money hand over fist.

At this point, I'd say they got past their business problems from the early '90s, and seem to have reversed their decline. They're not the behemoth that they used to be, but they've got a very comfortable niche that is doing a good job of lining their pockets.

Re: The decline and fall of IBM

#36

Post by seanmcdirmid »

jussij wrote: post #34
seanmcdirmid wrote: post #31

Earlier quoted context omitted.

Read Cringley's articles. IBM is great at marketing themselves and creating the appearance of value, but I doubt that they can do that forever.

People have been writing off IBM for decades. If you go back to the early nighties IBM had two or years in a row where it's annual losses where bigger than some countries total income and their share price fell under the $20 mark. That was around the time with the clone PC where taking off and everyone was predicted the end of IBM and big iron . Move on 30 years and their share price is now back over $200.

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 a hyper focus in optimizing their share price due to the talent they acquired from PwC; I would say, its more like PwC acquired IBM due to the cultural changes that followed (not that IBM was already dysfunctional, they were all too easy to convince of this). But really, how long can this last? Eventually they are expected to do great things to justify their valuation, and all the news suggests that they have no capabilities at all to do such; they just cut and cut!

Re: The decline and fall of IBM

#37

Post by jetti »

camus wrote: post #30

IBM is doing quite well. They are not falling at all. Yes they are not what they used to be , but they dont need to look like the new hotness to survive. IBM provides very high quality services for medium and big businesses. I'm not sure i get your point , just look at the numbers , they are quite good.

As somebody who makes a living writing code that integrates with an IBM product in the BI space, I absolutely love IBM. They gobble up companies to increase their portfolio and do little to improve them but end up crapping it up. It leaves a lot of market space for a company to come in and write software that will make working with their product(s) easy and intuitive.

Re: The decline and fall of IBM

#38

Post by jussij »

seanmcdirmid wrote: post #36
jussij wrote: post #34

Earlier quoted context omitted.

People have been writing off IBM for decades. If you go back to the early nighties IBM had two or years in a row where it's annual losses where bigger than some countries total income and their share price fell under the $20 mark. That was around the time with the clone PC where taking off and everyone was predicted the end of IBM and big iron . Move on 30 years and their share price is now back over $200.

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 used voluntary means like job buyouts and early retirement to eliminate jobs.

http://www.nytimes.com/1993/01/17/nyregion/ibm-weighs-possib...

Seem familiar?

Re: The decline and fall of IBM

#39

Post by lmg643 »

ctdonath wrote: post #33
reinhardt wrote: post #24

Earlier quoted context omitted.

A downward spiral for almost three decades while still being a multi-billion dollar company is a problem most hip startups would kill to have.

Q: how to create a small fortune? A: start with a large fortune.

A: start with a large fortune, and buy an airline.

Re: The decline and fall of IBM

#40

Post by prewett »

sinnerswing wrote: post #13
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…

exactly. "Why Warren Buffett Keeps Buying IBM" http://www.forbes.com/sites/gurufocus/2013/01/08/why-warren-...

I must be missing something, because when you have a debt/equity ratio of 173, isn't that a huge warning sign?
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