Tuesday, 30 April 2013

IBM Disappoints

Been late to latch on to this news. IBM has had a piss poor  disappointing quarter. The numbers are appalling to say the very least. I cant remember a result like this when Sam was around. Its been 2Q's for the new CEO and she hasnt really delivered. Boh Q's have been poor... and whats more, she didnt even consider it necessary to be with Mark Loughridge, CFO, during the call. Shocking, truly shocking.

Been checking a few links and sites to find out what the problems that ail are... and see that IBM is betting big on the private cloud... mmh, tough chance that. I am sure that there is a market for private clouds and it should grow at a decent clip - but its a tight and a closed market and there isnt a lot of opportunity there. Besides, a lot of the people who get into pvt clouds will be IBM customers already.

In another interesting news, Tivoli got rebranded to IBM Cloud and Smarter Infrastructure. Has anything to do with the debacle? I would like to think so.

The transcript of the call tries hard to makes one believe that a lot of big ticket deals [400mn $] didnt get clsoed and should get closed for the 2nd Q of 2013. But if that has to be believed, what about the same reason that was given during the last Q meeting. mmh.

Wide speculation about IBM trying to hive off the x86 server business too. MS puts the business at around 4.9 bn$ out of the 15.5bn $ that Hardware brought in to the coffers.

Interesting but very challenging times ahead and I personally feel that these are testing times for Big Blue. They have lost a trick or two and are playing catch up. Not confident of them in 2k13 from here is my opinion.

It remains to be seen if the failure is just because of poor execution as the executive team will like the people to believe [which can be course corrected. Cyclicals and the like] or if its more deep rooted and its because of secular challenges and the competitive environment [which will mean alternative strategies and the current strategy of going behind pvt cloud is a poor one].

Time will answer. But my bets are currently off IBM in the near term.

A few interesting reads herehere

Update on my personal opinion: Thought I had added it. Looks like I didnt. So here is:
What exactly is a private cloud? I mean, what really is it? Looking up on the internet it says, its personal h/w that companies buy to load it with their personal and confidential data and also their business applications so they can leverage their IT h/w and have seamless access to data and applications and so on.

Mmh. Very interesting. Game changing. Fantastic. Way to go... Mmh, hey, wait a second. Wasnt it done all the while? Didnt people call it data centers earlier. Wasnt it called server farms before that. Werent they called hardware that companies owned [pr assets perhaps? along with their associated depreciation costs]. Wasnt this budget getting squeezed and companies wanted to reduce their own infrastructure and hence tried to move to the cloud? Seriously now, is this even about to take off at such a fast clip as IBM and a few other companies forecast. Am I wrong in my assumption or the company executives and forecasters getting it all wrong becasue of the rebranding of pvt infrastructure to pvt cloud. Are customers going to fall for this trick too? I doubt it!

Update 2: Aaha. I am not late to this. IBM is acquiring SoftLayer. Link here. Agreement signed and this should help in accelerating their cloud push. But private cloud growth? Needs to be seen.