321–330 of 374 posts
Earlier quoted context omitted.
I joined IBM over 40 years ago, like my pappy before me. My main takeaway from IBM's longevity is just how astonishingly long big companys' death rattles can be, not how great IBM are at running software businesses.
Are they dying? IBM’s stock is up 160% over the past 5 years.
This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way? Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic…
IBM lives off huge multi-year contract deals with their customers, each are multi-multi-million dollars worth. IBM has many of these contracts, maybe ~2000 of them around the planet, including your own government wherever it is that you live. This is ALL that matters to IBM. ALL. That. Matters.
These huge contracts get renegotiated at every X years. IBM renewal salespeople are tough and rough, in particular the ones on the renewal teams, and they spend every minute of every hour in between renewals grooming the decision makers, sponsors, champions and stakeholders (and their families) within these big corporations. Every time you see an IBM logo at a sports event (and there are many IBM-sponsored events), that's not IBM marketing to you the ad-viewer. They are there for grooming their stakeholders, who fight hard to be in the best IBM sponsored-seats at those venues, and in the glamorous pre and after party, celebs included. IBM also sponsors other stuff, even special programs at universities. Who go to these universities? Oh, you bet, the stakeholder's kids, who get the IBM-treatment and IBM-scholarship at those places.
But the grooming is not enough. The renewal is not usually at risk - who has the balls to uninstall IBM out of a large corp? What is at risk is IBM's growth, which is fueled by price increases at every renewal point not the sale of new software or new clients - there are no new clients for IBM anywhere anymore! These price increases need to happen, not just because of inflation but because of the stock price and bonuses that keep the renewal army and management going strong, since this is a who-knows-who business. To justify the price increase internally at those huge client corps (not to the stakeholder but to their bosses, boards, users, etc) IBM needs to throw a bone into these negotiations. The bone is whatever acquisition you see they make: Red Hat, Hashicorp... Or developments like Watson. Or whatever. They are only interested in acquiring products or entering markets that can be thrown at those renewal negotiations, with very few exceptions. Why Confluent? Well, because they probably did their research and decided that existing Confluent licenses can be applied to one (yeah, one) or many renewal contracts as growth fuel for at least 1-to-N iterations of renewals.
Renewal contracts correspond anywhere from 60% to 95% of IBM's revenue, depending on how you account for the the consulting arm and "new" (software/hw sales/subscriptions). I particularly have not seen lots of companies hiring IBM consultants "just because we love IBM consultants and their rates", so consulting at a site is always tied to the renewal somehow, even if billed separately or not billed at all. Same for new sw sales, if a company wants something IBM has on their catalog from their own whim and will, then that will just probably be packed into the next renewal because that's stakeholder leverage for justifying the renewal's increase base rate. Remember, a lot of IBM's mainframes are not even sold, they are just rentals.
Most IBM investment into research programs, new tech (quantum computing!) etc are there just to help the renewals and secure a new Govt deal here and there. How? Well, maybe the increase in the renewal for the, ie, State of Illinois contract gets a bone thrown in for a new "Quantum Research Center (by IBM)" at some U of I campus or tech park that the now visionary Governor will happily cut the ribbon, photo op and do the speech. Oh wait! I swear I made this up as an example, but this one is actually true, lol:
https://newsroom.ibm.com/2024-12-12-ibm-and-state-of-illinoi...
You get the drill?
This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way? Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic…
Watson was a marketing exercise designed to sell a bunch of disconnected text and image processing libraries pulled together by consulting services. It did not function as advertised. At one point we worked with a large energy company that was basically sold something LLM-like (large-scale indexing and searching/querying of documents) in 2016 or so. IBM had a team of 90 people doing full-time data ingestion for somet…
Until 3/4 years go I was in healthcare for 15 years, a good bunch of them being partners with IBM in radiology imaging solutions. I've been in their IBM La Gaude (former) research/presentations lab a couple times and I've seen a lot of their Watson product come and go, without much success. I have to say that I've seen a couple that were very interesting, but were mostly statistical, with no AI/LLM/... involvement.
And don't talk me about Softlayer/Bluemix. Or their private cloud racks that I cannot even remember their name...
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0: https://pharmaphorum.com/news/ibm-sells-off-large-parts-of-watson-health-businessEarlier quoted context omitted.
> they consistently deliver low quality/bottom-tier services and products I worked with IBMers. The main priority for a lot of them is to ensure continuous employment for themselves and their buddies. They'd add unnecessary complexity to a product to stretch out the development for another couple of years. And they work at leisure pace for tech. Actual 9 to 5, many coffee breaks. They can't compete.
I worked with IBM several decades ago for a customer project, and the solution suggested by an IBM'er for backing up a NoSQL database (Lotus Notes) on a daily basis was to translate and migrate the data to a relational one (DB2), then use a DB2 tape backup system to back it up. When I pointed out that this was a stupid way to do it, they openly told me that they just wanted to sell DB2.
Now AWS is eating Confluent's lunch with it's managed Kafka. AWS MSK is still a little rough like all AWS services but it's still cheaper and a no-brainer if you are already on AWS.
This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way? Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic…
IBM is where good (acquired) software goes to die. RIP Clearcase.
And the enshittification treadmill continues. Great time to be a kafka alternative. I'll start. https://github.com/tansu-io/tansu
Do any of these alternatives make it easy to transition a system that is using Kafka Connectors and Avro?
https://docs.streamnative.io/cloud/build/kafka-clients/kafka...
Confluent had great stuff but their prices were crazy. When we got a quote from them, it was 20x more than what we could run on our own. We got quoted something like ~500k/year and my math on running it on AWS came around 25k for the same sized cluster via Strimzi operator on dedicated K8s nodes. We could hire a dedicated 3 person team to manage the cluster for the same price lol. Now AWS is eating Confluent's lunch…
When looking for alternatives to Kafka these are the most promising options I found, not counting RabbitMQ which needs no introduction.
Pulsar seems to be 'kafka done better'. The version of Kafka that Confluent used internally (Kora) seems closer to Pular as well. Pulsar has a lot of features that Kafka doesn't have, like per-message acknowledgement, similar to RabbitMQ. And it has protocol support for RabbitMQ and Kafka, so can be a drop-in replacement.
Redpanda seems like a great re-implementation of Kafka.
I'm hoping this boosts Pulsar's status and helps get some traction for StreamNative. It seems like the best technical solution for events and messaging. It just needs a bit more market adoption to make an easier choice for enterprise, in my opinion. This might be that moment.
*(yes I know about NATS)