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Magical thinking at IBM - Cringely on technology -
2012-04-21 06:45:53 GMT
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"Successful companies aren’t heartsick and IBM today is exactly that, so the company is not a success. Looking back over the 35 years I’ve been covering this story I can see in IBM an emotional and financial sine wave as rapture leads to depression then to rapture again, much of it based on wishful thinking. The first IBM rapture I experienced was pre-PC under CEO John Opel, when someone in finance came up with the idea of selling to IBM’s mainframe customers the computers they’d been leasing. Sales and profits exploded and the amazing thing was the company began writing financial plans based not only on the idea that this conversion largess would continue essentially forever but that it would actually increase over time, though obviously there were only so many leases to be sold. When the conversions inevitably ended, IBM execs were shocked, but Opel was gone by then, which may have set another important precedent of IBM CEOs getting out of Dodge before their particular shit has hit a fan. We see that most recently in Sam Palmisano, safely out to pasture with $127 million for his trouble, though at the cost of a shattered IBM. Thanks for nothing, Sam."
"Yes but, readers tell me, that’s just services, not the real IBM. There is no real IBM, not any longer. The company has become a cash cow. You never feed a cash cow, just take money out until the cow is dead. Hardly respect for the individual, eh? If IBM is planning a 78 percent staff reduction, then that will of necessity involve all USA operations, not just Global Services. Hardware, systems, software, storage, consulting, etc. will all see serious staff cuts. This means IBM could be moving a lot of its manufacturing and product support offshore. Raleigh, Lexington, Rochester, and several other IBM communities are about to lose a lot of jobs. Every non-executive job at IBM is viewed as a commodity that can be farmed out to anyone, anywhere. IBM was once so special but today there’s little difference between IBM, AOL, or Yahoo except that IBM has better PR. All three are profitable, something we tend to forget when it comes to AOL and Yahoo. All three are effectively adrift. All three are steadily selling off the bits of themselves that no longer seem to work. When Global Services is gone, what will IBM sell next? Everything else."
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