Not a great time to be an IBMer, huh?

Not just disappointing... but piss poor. What ever are the execs thinking?


Nice article from this person which actually raises more qns than answers.


WOW, just WOW

Forcing functions

Interesting article on forcing functions


 Through Forbes


"
While AWS made progress because of this forcing function, it is reasonable to ask: Was there a better forcing function? Recent moves by IBM and enterprise-class cloud firm Virtustream shows that Bezos may have made the wrong choice in forcing functions if he were seeking the largest market possible for AWS, not just increased operational efficiency for Amazon.com.
"

Uncle Sam weighs in

"In 2012 he formed a think tank called the Center for the Global Enterprise and just came out with an e-book called Re-Think: A Path To The Future. The book argues that multinational firms in a rapidly integrating world need to remake themselves into what he calls globally integrated enterprises (like he did with IBM). So-called GIEs are different than mere multinationals in structure and operating approach. Legal could be in Amsterdam, research in China and California, HR and accounting in New York. Talent goes where it’s needed. Work flows to where the customers are, not where the headquarters is. Country managers don’t get to act like royalty of their own realm. Collaboration is digital and frequent. Palmisano says that IBM saw a total productivity gain of $6 billion from 2006 to 2010 by doing things like globalizing support services and the supply chain (fewer and bigger factories), freeing up local managers to focus on sales and relationships. IBM outgrew growth markets such as China and India at twice the rate of the tech industry."


More here

Another Quarter, Another disappointment for IBM

Piss poor results.

BM beats by $0.03, misses on revenues • 4:06 PM

• IBM (IBM
  ): Q3 EPS of $3.99 beats by $0.03.
• Revenue of $23.7B (-4% Y/Y) misses by $1.07B. Shares -2.7% AH. (PR
  )

Ridiculous. How long more? I thought they were doing decently till I was around. Which was around last Octish. Sam was around and things did work like clock work and we had outstanding stand out performance. 

What has really changed? The CE has changed for sure... but wasn't the plan for 2015 [Roadmap to 2015] already in place? 

An afterthought: Was I really the REASON [I am reminded of the vague GBS [IBM Service division] T-shirt that the people used to wear in IBM which said "I am the REASON" without mention what they were the reason for.

Mmh, I digress. Was I the reason? 4 Q's now and 4 Q's of progressively bad stuff. Will they recruit me again to see if I am the reason? 

Revenue miss is disappointing and I think IBM does need to stop the stupid focus on financial engineering and focus on revenue growth. It is steadily becoming a holding company for vastly disparate assets with poor innovation focus lately... Mmh, isn't that called an investment bank rather than a technology company if you becoming a holding company rather? 

More later.   

IBM launches NeXtScale

Slightly late to this beat. So, IBM has launched NeXtScale a few days back.

Tried to probe a bit - Its to do with hyperscaling. [It seemed new and raw to me too initially. It basically means cloud scale. Commoditized hardware with compatible software innovations. away from modular x86]. Dell solves that through DCS and HP also were  dabbling in it [dont know how well they were doing it.]

So far so good. IBM had POWER architecture and it wasnt really the best of options considering costs and other factors too.

mmh. But getting into the x86 market this late?  Dell has been doing it decently through DCS and HP is also dabbling and both of them approximately have 2 times the market share [atleast] (and IBM's market share is trailing and sort of just 11% now and doesnt seem like it will pick up). Seriously, why? Werent they trying to sell the x86 commodity server hardware business to Lenovo [and quoted an outrageously high price which Lenovo didnt accept to]

I do wonder whats the actual reason.

A nice take on this here: NeXtScale

Possible? Perhaps. Even probable. IBM has been aggressively cutting low margin businesses to meet the 2015 roadmap. Its difficult to meet it as it is. [EPS of 20 tgted and they are at almost 14 now, IIRC]
They just sold a big chunk of GPS too. Why launch NeXtScale is a question which I am currently curious about.

Update: Sep 18th: IBM plans to invest 1bn on Linux over next 4-5 years. 1Bn proposed investment by IBM on Linux Interesting the thought. Needs to be seen if it will generate cash though. A development cloud is a nice idea but its for free? for entitled customers, perhaps. So, if I think from the other angle, it basically means that IBM charges such a heavy license cost that it can afford to keep a DC [dev cloud] running for free [which can be loaned for development efforts of their customers]

IBM Reported by SEC for violations in cloud reporting

Interesting times get even more interesting.
Now IBM has been reported by SEC for violations in its cloud reporting in its earnings.

Mmh... but hey, wait a minute. Didnt IBM say there is an aggressive push by the company towards the cloud, its adoption and making it more seamless. Havent they been showing approx 25-30% growth in it Q-o-Q.

Sadly, no link yet. Its still hot news though. 

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 here, here

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.

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