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Jim Whitehurst to step down as IBM President

189 points by sweettea 5y ago

echelon 5y ago
I'd really like to see IBMers talk about the past, present, and future of the company. It looks pretty pale to me. Back in the Thinkpad era, IBM had a lot of cool stuff going on. But now it seems like a shadow. Watson and IBM cloud look like flops. The email fiasco is weird and should never have happened. What did buying Red Hat accomplish? As an outsider, it doesn't seem to have infused any new ideas, and the changes to centos just made people move further away AFAIK. Or buying stuff like the Weather Channel? The chip business looks promising. Maybe IBM should double down there? Consulting, in general, seems to not be a great tool to sharpen internal capability. The constant layoffs of the past have also had a hugely deleterious effect.
- acoard 5y ago
  >What did buying Red Hat accomplish? As an outsider, it doesn't seem to have infused any new ideas, and the changes to centos just made people move further away AFAIK. I am not an IBMer though have worked with many former IBM folks, and work with Red Hat on and off every month or so. From what I've gathered, Red Hat is the new core of IBM. The goal is to grow Red Hat, specifically their OpenShift offering (which is huge in gov't as it allows for hybrid clouds), and make centre the biz around that then the "traditional" IBM consulting style.
- Retric 5y ago
  IBM’s core business is boring crap that doesn’t make the news. So, how the company is doing has little to do with the kinds of things you hear about. That said, their market cap peaked in 2012 at 240B vs 130B today and their revenue and profits are similarly down, which suggests things haven’t been going well for a long time.
- throwaway57754 5y ago
  IBM bought Red Hat for OpenShift. IBM buying Red Hat was supposed to propel OpenShift and Red Hats portfolio into the C-suite connections IBM had. Instead, it seems IBM has force marched Red Hat to focus all their energies on OpenShift at the expense of their larger portfolio. OpenShift probably isn't performing as well as IBM expected, and even with 4 it still carries the "OpenShift is not Kubernetes" vibe. IBM also has a bunch of products in their portfolio that compete with Red Hat. On the IBM side, weird shit is a foot. The GTS spinoff into Khndryl is very, very bizarre. They're a profitable part of IBM but need to be excised, quickly? It's causing chaos for accounts that had deep GTS coverage as the account teams are basically adversarial. The rest of IBMs portfolio is stagnating as they chase fads and lose to niche players with better overall value. Especially with the Data/AI space, startups are killing them.
  - rescbr 5y ago
    ex-IBMer here, product side: GTS sometimes had better private pricing and incentives for products from competitors that other business units couldn't match due to internal pricing policies. Now try explaining to the customer why IBM is recommending an IBM's competitor while IBM is also offering the same product with a better price directly to the customer. It doesn't make sense at all. Consider two service-focused business units (GTS and GBS) that sometimes are complementary but mostly adversarial and it is chaos for the customer. Spinning-off GTS (and I dare say, GBS too) is better for the customer and for the product business units.
  - jhickok 5y ago
    Containerizing IBM's software and forcing it all on OpenShift is such a weird move to me. When you force your customers to become Kubernetes admins when all they really want is some other solution I think you have a drastically smaller target. I think a lot of Red Hatters are tired of having the IBM sales force show up in their OpenShift accounts asking about upgrading them to Cloud Paks.
    - NAK21 5y ago
      Even worse is the IBM team trying to sell IBM cloud saying cloud-only is the way to go. Customer agrees and compares clouds, settles on AWS or Azure, then IBM team brings in Red Hat to pitch hybrid.
- kingsuper20 5y ago
  >Back in the Thinkpad era, IBM had a lot of cool stuff going on. But now it seems like a shadow. I remember their stuff from the pre-Thinkpad era. Quite a company. Working for both a large competitor and for a small company that was trying to sell to them they seemed clumsy but still had an amazing portfolio. My guess is that they just need to merge/break-up/reconfigure into oblivion. Just another AT&T/HP/ITT/Polaroid/Xerox
  - matt_s 5y ago
    Having worked at one of those that also did business with IBM, I felt there was an ethos I observed in the upper ranks that is hard to describe. It was like they felt they were better than others, had large egos about their brand and had a certain stuffiness to them where they knew what was right because it was them. Like a business book/MBA club of sorts. Kinda hard to describe it. Anyhow I wonder if this better-than-thou, stuffy corporate attitude leads itself to internal re-org cycles where it results in no identity and no central vision, just internal battles. It seems like other similar size large companies, like Apple, can be successful so maybe their leadership doesn't show these character traits?
    - kingsuper20 5y ago
      When I had to deal with some small tendril of IBM, I think the anti-trust suit was still in the works. It probably scarred their dealings with other companies to the same degree that their dominance did.
- strife25 5y ago
  This Stratechery article from 2018 nailed it for me: https://stratechery.com/2018/ibms-old-playbook/ https://stratechery.com/2018/ibms-old-playbook/
- osipov 5y ago
  ex-IBMer here. I rode this from 2001 until 2016 when it became clear that breaking up the company (as they recently did) would become the only sensible path forward. While many poor decisions were made inside of the company, I ultimately blame Wall Street for IBM's downfall. Remember that back in 2011, Palmisano finished strong with IBM's Watson winning Jeopardy, IBM Software delivering consistent >80% profit margins on $10Bs in revenue, and a strong services backlog. Many don't know that Palmisano's departure was preceded by a Wall Street mediated competition for the successor. IBM Software Group SVP, Steve Mills, was the obvious choice. The guy was a lifetime IBMer, intellectually superb, allegedly with photographic memory, effective public speaker, and with a proven history of leading (at the time) the 3rd largest software business in the world. Unfortunately, Wall Street didn't like Mills because he did not come across well on CNBC. The guy is chubby and doesn't look like a conventional CEO. So Ginny Rometty, with a claim to fame based on building IBM Global Business Services from on the PwC acquistion became the leading candidate. Ginny is "media friendly" and the diversity factor didn't hurt. Once Ginny came on board, leadership style changed from long-term to fickle and neurotic. Instead of committing to the hard work of building complex technology (e.g. cloud), any signs of technological challenges became reasons for business strategy changes at the top level. What started as a build decision (IBM SmartCloud) turned into a buy decision (Softlayer), followed by a build decision (IBM Bluemix), and so on. However, Ginny's biggest failure was her inability to raise capital on Wall Street. IBM's engineers weren't failing at building cloud technology because the engineers were terrible (some were, normal distribution rules still apply) but because cost cutting policies starved engineering teams though attrition and lack of hiring. Staffing a team meant bringing in internal hires w/o the right skill set or taking a gamble on offshore (global) resource. At the same time Google was hiring left and right with comparative ease (as an aside, now they are dealing with the consequences). Bottom line, Ginny couldn't get the capital to fund internal engineering efforts for the scale of the transformation needed to sustain IBM's success with machine learning (Watson) and cloud. I place the blame on Wall Street since they made the bet on Ginny and then left her out to dry.
  - josipt 5y ago
    Wall Street? Couldn't raise capital? Maybe IBM could have used some of the $110 billion dollars they spent on buying back shares to, I don't know, build a real business? IBM could potentially have built what is now AWS but what did they do instead? Share buybacks. What do they have to show for that? IBM has been essentially a financial engineering machine for many years, with their ridiculous 5-year EPS targets and all the rest of it. While I was there they even removed plants, copiers, coffee machines, televisions, pads, pencils, pens and everything else in sight to "save" money. The "leadership" of IBM drove the company in to the ground, period.
- chr15p 5y ago
  > The chip business looks promising. Maybe IBM should double down there? I always thought IBM should have bought ARM, the combination of IBM chip tech plus ARMs designs and Red Hat for the software stack would make for an amazing tech business.
  - kjs3 5y ago
    This is a really nifty 'what it' to think about, but I don't think IBM needed ARM to have owned the world. They had/have POWER & PPC, and the associated development ecosystem, which gave them processor coverage from low-end embedded thru supers. They just needed to tweak their go-to-market to match the flexibility that ARM has given their licensees and it could have been a very different story.
- darksaints 5y ago
  The chip business has so much potential, and they're wasting it all because they're so stuck in their enterprise marketing and sales model. There is so much demand out there for non-X86 workstations with high performance and large core counts, and they won't even touch it. There is so much demand out there for highly scalable and energy efficient cloud professors (to the point that they're developing them independently), and they won't even touch it. Just sell the damn processors to the people who want them already!
  - xadhominemx 5y ago
    There are many very well funded companies working on merchant non-x86 processors. There’s no reason to think IBM would be any better at it or that customers would prefer to buy from IBM.
    - kjs3 5y ago
      There’s no reason to think IBM would be any better at it I dunno...they've been building processors since the 1950s.
- thedougd 5y ago
  IBM once had a deep, deep bench of engineering talent and squandered it away. They failed to maintain the engineering culture while making many strategic mistakes (cloud). Starting in the late 2000s and early 10s, executives were crying for 'cloud skills' as part of their continuous 'workforce remix'. Did Amazon build AWS by hiring cloud skills? Of course not. You build a cloud with a wide array of talent including hardware, chip design, software, and systems engineering. IBM had all that available in house.
  - geodel 5y ago
    True. I remember in that big data hustle in last decade, some morons were claiming that Google is facing problem in hiring Hadoop talent. Imagine that!
vlovich123 5y ago
An email migration was that important that they decided to shake up quite a bit of the exec team? Or was the email migration stuff just internal politics playing out in the news?
- rdl 5y ago
  Email migration? I haven’t been following IBM very closely but a quick google search failed me here.
  - NortySpock 5y ago
    https://www.theregister.com/2021/06/30/ibm_email_outage/ https://www.theregister.com/2021/06/30/ibm_email_outage/
    - rdl 5y ago
      (Thanks; I was searching under the CEO’s name and not IBM for some dumb reason; I blame lack of coffee.) Whoa.
    - echelon 5y ago
      That this could happen in any organization is surprising. That it happened in IBM is downright shocking. How do you fail an email migration and not have email for your employees? How do you let this affect billing and invoices? Why haven't they at least set up something temporary?
      - reaperducer 5y ago
        Why haven't they at least set up something temporary? Yes, just spin up e-mail addresses for 400,000 people in 177 countries. No problem. Just run it on a Raspberry Pi in the basement.
        echelon 5y ago
        Pay Google or Microsoft to do it for you. Focus on the core business competencies, of which email is clearly not one. Edit since I can't reply: An extended email outage isn't a good look either. If IBM can't run their own critical systems, why trust them with yours? I personally think making the strategic decision to outsource demonstrates the ability and desire to find timely solutions.
datahead 5y ago
I like Whitehurst and have had the chance to meet him a few times. If you want to understand his ethos check out "The Open Organization". It details his transition from Delta to Red Hat and the transformation of his leadership style being around a lot of smart engineers and team players ready to constructively challenge each other. Good read for anyone interested in building inclusive company culture in tech. Honestly, I thought IBM would be feel less rudderless with him at the helm. I wanted IBM to become more 'red' and not RH to become more 'big blue'- but it appears this isn't the case after all... seems like a short tenure. Anyone know more about the new leadership?
- htrp 5y ago
  In every acquisition the Acquirer imposes on the Acquiree..... In this case, I'd bet that it's Arvind Krishna pulling people out of IBM Cloud (his old division) to run the rest of "big blue" And yes, IBM will basically bleed talent from Red Hat for the next 3 years until RHEL is a pale shadow of its former self.
  - paiute 5y ago
    I expect IBM will be an Irish or similar company soon.
    - na85 5y ago
      What's an Irish company, in this context?
      - simcop2387 5y ago
        I believe they're referring to this, https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven
    - raverbashing 5y ago
      It already is ;)
hal-employee 5y ago
I thought Jim was going to be the next CEO.
- datahead 5y ago
  I did as well, and was rooting for him.
rvz 5y ago
Jim Who? The man who sold the red hat to big blue?
mrtweetyhack 5y ago
Jim Whitehurst fired
BrandoElFollito 5y ago
One of my recent revelations was when I told my teen children "... a company like IBM". To what they said "what is IBM??" They know all the large tech companies but that one was a surprise to them, they had a look at Wikipedia and said "ah yes, it was a great company in your times". Time to get some wine.
- avereveard 5y ago
  IBM portfolio isn't targeted to consumers like Apple's or other companies, even at peak IBM it was an office name, not a household name. The only consumer facing product they had for the longest time were cash registers, and those aren't particularly hip as to live in consumer imagination Edit: in today episode, hacker news forget they're a niche cohort.
  - ComputerGuru 5y ago
    > even at peak IBM it was an office name, not a household name IBM was synonymous with PC for quite some time.
    - avidpsychlist 5y ago
      yeah, in my early youth "IBM" or "IBM Compatible" (for the value shoppers out there, such as my family) was very much a household name...if your household had a computer at all, that is.
    - lancefisher 5y ago
      This is true. You had an IBM or an IBM compatible PC running DOS and then Windows. I was well aware of IBM at a young age.
      - browningstreet 5y ago
        How many times was that phrase used in computer magazines? I kind of forgot about it, this thread has brought me back to the days I would sift through computer magazines at book stores.
htrp 5y ago
Stock is down 4%
nomoreplease 5y ago
When I talk to former IBMers (including a VP), it seems much of the outward “success” there is financial engineering, yet the business is crumbling in reality. Jim leaving amidst a chaotic, failed email migration that is impacting sales is not surprising
- djrogers 5y ago
  > leaving amidst a chaotic, failed email migration that is impacting sales is not surprising I'm not sure if you're trying to imply causation here, but vast sweeping changes like this rarely happen in a matter of days - it's far more likely that this has been in the works for a while, and the email mess is coincidental.
  - nomoreplease 5y ago
    Coincidental yes. I was not implying causation.
  - MattGaiser 5y ago
    It speaks to the standard of work they do at IBM.
- sidcool 5y ago
  Can you shed some more light on email migration? What was it about and why did it fail?
  - Bayart 5y ago
    Previous threads : - IBM's 18-month company-wide email system migration has been a disaster: sources[1] - IBM email fiasco complicates sales deals, is worse than biz is letting on[2] [1]:https://news.ycombinator.com/item?id=27692965 https://news.ycombinator.com/item?id=27692965 [2]:https://news.ycombinator.com/item?id=27706128 https://news.ycombinator.com/item?id=27706128
- mathattack 5y ago
  They long ago moved from the innovation business to the share buyback business. It’s crazy that a tech company struggles so much to innovate that the best use of their cash is either returning money to shareholders, or buying companies on their behalf.
stuff4ben 5y ago
We all hoped it wouldn't happen, but RedHat is going to become more blue rather than the other way around. It's the way with all acquisitions unfortunately. As a current IBMer, I'm fascinated with this and I wonder what Arvind's end goal was here? It certainly doesn't seem like it was Jim's idea.
peytoncasper 5y ago
Cloud is the new mainframe. And IBM Cloud is terrible in comparison. All you ever hear about is how challenging Kubernetes is to manage. IBM invested in self managed Kubernetes essentially while everyone else built SaaS Kubernetes Engine’s. IBM feels like a collection of revenue lines that hasn’t really tapped into any new streams lately.
- jhickok 5y ago
  For what it's worth IBM has transitioned to OpenShift and it is a very successful product line. I think there are a lot of problems with marrying OpenShift with IBM's other products but OpenShift on IBM Cloud is pretty good.
  - peytoncasper 5y ago
    I'm sure it's successful to some degree. They bought it, because it was a successful enterprise implementation. That being said, I'm not sure why I would leverage OpenShift on IBM Cloud when I can get practically the same thing from the other providers with a stronger ecosystem of tooling. Which leads me back to OpenShift on-premise and I'm just not sure that is where the market is at or headed right now.
    - jhickok 5y ago
      I view OpenShift, ultimately, as a bridge technology that leads to pure cloud k8s, but there is a heck of a lot of money to be made in the meantime. IBM Cloud gets new OpenShift features quicker than other cloud providers.
gigatexal 5y ago
Well so long to Redhat improving the culture at IBM
kwelv 5y ago
Oh
failwhaleshark 5y ago
Agnostic of actual political nonsense, an email scandal finally gets someone in leadership. That's the unluckiest SOB ever. PS: After an experimental physics colloquia on their campus up the hill, IBM Almaden offered me a paid dark matter RA job when I was 15. It didn't happen thanks to sabotaging parents. Also, a computer scientist-programmer lady from IBM volunteered her time at my high-school which was really cool.
tims33 5y ago
It won't be long until IBM starts the write-downs of the goodwill from the RH acquisition.
thedougd 5y ago
IBM can recover from this with some stock buybacks. Maybe borrow to get it done.
- mathattack 5y ago
  Only maybe? They’re bleeding cash with the failed split. Of course they will need to!
2OEH8eoCRo0 5y ago
I was considering applying to Red Hat and was assured by the fact that IBM put Jim in charge. Now that I see this I'm reconsidering Red Hat as a company.
- pengaru 5y ago
  My connections at RedHat say nothing has changed for them, and that RedHat is not IBM. But Jim leaving does make it look less likely that IBM will be turning into RedHat anytime soon. From what I'm told RedHat continues operating as an independent business unit under IBM. Edit: full disclosure; I too am considering RedHat, as I'd like to resume full-time work on systemd/journald in the future and there aren't exactly many places employing people to work on upstream systemd. So I may be biased in wanting to believe the above is true, grain of salt and all.
  - dobsonj 5y ago
    They do indeed feel like 2 completely different companies. Different hiring processes, different employment contracts, different cultures, different offices, different tools, different management structures, different benefits. The biggest change I've seen is that they now trade under the same ticker symbol. Source: former IBMer, current Red Hatter
  - decodebytes 5y ago
    I am at RH right now, engineering. Things have really not changed. I will be honest I am a little nervous that Jim has left, but I think on the whole it's still a great place to work right now. In 3-5 years , who knows?
throwawayoung 5y ago
Early redhatter here. I will always have mixed feelings about Jim. On the one hand, I fully respect him, what he does, and how he does it. I think he was a good choice for redhat at the time. However, his start also coincided with then end of the really fun times.
- jhickok 5y ago
  I feel that is normal in the lifecycle of a growing business-- at some point you have to exit startup mode and get corporate, no?
  - markus_zhang 5y ago
    Yeah but then the fun ends unless you are into the manager mindset.
- pm90 5y ago
  Could you expand on that? Did he centralize planning or tighten budgets or something?
  - ghaff 5y ago
    As someone who was following Red Hat as an industry analyst at the time, it was growing a lot and everything that implies came with it. To the sibling comment's point, that meant moving away from "everyone" knowing everyone else, moving away from a lot of people being involved with and knowledgeable about most of the company's technology (though JBoss was still sort of its own island at the time), and lots of things being sort of ad hoc. A lot of people had pretty flexible roles. I won't say things totally changed but, as is necessary as you grow, more process was put in place, there was a more deliberate use of data, a shift from "random acts" that made sense in isolation to more programmatic ways of doing things. These things weren't bad and were in fact needed. But, even if Red Hat wasn't really still a startup when Whitehurst took over, it wasn't really a mature large company either.
mathattack 5y ago
I wasn’t a fan of Red Hat or the acquisition but it seems like they are pretty much turning it into a (small) revenue stream to be optimized rather than something transformational. Am I the only one who feels like IBM could be circling the drain like when they missed out on PCs?
crb002 5y ago
He sold zero IBM System Z mainframes to AWS. He let thousands of IBM point of sale systems to be replaced with crap that can't buffer keystrokes - instead of modernizing the SDKs for those who know Linux and not AIX. He bought RedHat, but not Digital Ocean so they had a cloud consumers trust. He didn't win a serious contract with Facebook for kernel tuning. He didn't win a serious contract with AWS for AWS Linux 3. He let COBOL and APL continue to die instead of funding modern tooling.
- blcknight 5y ago
  Who is he? Jim? Jim came from Red Hat (it’s two words btw)
  - yourapostasy 5y ago
    I'm guessing Arvind Krishna by the "He bought RedHat...". But I didn't realize the IBM CEO is expected by investors (or anyone really) to be that involved in those kinds of sales mentioned in the other points.
encryptluks2 5y ago
I saw this coming even before the acquisition. While Red Hat did help fund some excellent open source work, usually through acquisitions, they would never have been my first choice for partner support. Red hat is for companies that have no clue what they are doing and caters to executive management who wants their name in marketing so they can talk about how they helped make the company more successful so they can find a higher paying executive role at another large enterprise. Once a company has some descent Linux engineers and developers, they then switch to CentOS, Ubuntu, or some lighter weight distro. At that point, if you continue to engage with Red Hat, usually because some executive is getting kickbacks and has signed multi-year contracts, you just end up doing all the work yourself realizing that a lot of your problems are caused by Red Hat and that you'd be better off with another distro entirely.

189 points by sweettea 5y ago

I'd really like to see IBMers talk about the past, present, and future of the company. It looks pretty pale to me. Back in the Thinkpad era, IBM had a lot of cool stuff going on. But now it seems like a shadow. Watson and IBM cloud look like flops. The email fiasco is weird and should never have happened. What did buying Red Hat accomplish? As an outsider, it doesn't seem to have infused any new ideas, and the changes to centos just made people move further away AFAIK. Or buying stuff like the Weather Channel? The chip business looks promising. Maybe IBM should double down there? Consulting, in general, seems to not be a great tool to sharpen internal capability. The constant layoffs of the past have also had a hugely deleterious effect.

acoard 5y ago
>What did buying Red Hat accomplish? As an outsider, it doesn't seem to have infused any new ideas, and the changes to centos just made people move further away AFAIK. I am not an IBMer though have worked with many former IBM folks, and work with Red Hat on and off every month or so. From what I've gathered, Red Hat is the new core of IBM. The goal is to grow Red Hat, specifically their OpenShift offering (which is huge in gov't as it allows for hybrid clouds), and make centre the biz around that then the "traditional" IBM consulting style.
Retric 5y ago
IBM’s core business is boring crap that doesn’t make the news. So, how the company is doing has little to do with the kinds of things you hear about. That said, their market cap peaked in 2012 at 240B vs 130B today and their revenue and profits are similarly down, which suggests things haven’t been going well for a long time.
throwaway57754 5y ago
IBM bought Red Hat for OpenShift. IBM buying Red Hat was supposed to propel OpenShift and Red Hats portfolio into the C-suite connections IBM had. Instead, it seems IBM has force marched Red Hat to focus all their energies on OpenShift at the expense of their larger portfolio. OpenShift probably isn't performing as well as IBM expected, and even with 4 it still carries the "OpenShift is not Kubernetes" vibe. IBM also has a bunch of products in their portfolio that compete with Red Hat. On the IBM side, weird shit is a foot. The GTS spinoff into Khndryl is very, very bizarre. They're a profitable part of IBM but need to be excised, quickly? It's causing chaos for accounts that had deep GTS coverage as the account teams are basically adversarial. The rest of IBMs portfolio is stagnating as they chase fads and lose to niche players with better overall value. Especially with the Data/AI space, startups are killing them.
- rescbr 5y ago
  ex-IBMer here, product side: GTS sometimes had better private pricing and incentives for products from competitors that other business units couldn't match due to internal pricing policies. Now try explaining to the customer why IBM is recommending an IBM's competitor while IBM is also offering the same product with a better price directly to the customer. It doesn't make sense at all. Consider two service-focused business units (GTS and GBS) that sometimes are complementary but mostly adversarial and it is chaos for the customer. Spinning-off GTS (and I dare say, GBS too) is better for the customer and for the product business units.
- jhickok 5y ago
  Containerizing IBM's software and forcing it all on OpenShift is such a weird move to me. When you force your customers to become Kubernetes admins when all they really want is some other solution I think you have a drastically smaller target. I think a lot of Red Hatters are tired of having the IBM sales force show up in their OpenShift accounts asking about upgrading them to Cloud Paks.
  - NAK21 5y ago
    Even worse is the IBM team trying to sell IBM cloud saying cloud-only is the way to go. Customer agrees and compares clouds, settles on AWS or Azure, then IBM team brings in Red Hat to pitch hybrid.
kingsuper20 5y ago
>Back in the Thinkpad era, IBM had a lot of cool stuff going on. But now it seems like a shadow. I remember their stuff from the pre-Thinkpad era. Quite a company. Working for both a large competitor and for a small company that was trying to sell to them they seemed clumsy but still had an amazing portfolio. My guess is that they just need to merge/break-up/reconfigure into oblivion. Just another AT&T/HP/ITT/Polaroid/Xerox
- matt_s 5y ago
  Having worked at one of those that also did business with IBM, I felt there was an ethos I observed in the upper ranks that is hard to describe. It was like they felt they were better than others, had large egos about their brand and had a certain stuffiness to them where they knew what was right because it was them. Like a business book/MBA club of sorts. Kinda hard to describe it. Anyhow I wonder if this better-than-thou, stuffy corporate attitude leads itself to internal re-org cycles where it results in no identity and no central vision, just internal battles. It seems like other similar size large companies, like Apple, can be successful so maybe their leadership doesn't show these character traits?
  - kingsuper20 5y ago
    When I had to deal with some small tendril of IBM, I think the anti-trust suit was still in the works. It probably scarred their dealings with other companies to the same degree that their dominance did.
strife25 5y ago
This Stratechery article from 2018 nailed it for me: https://stratechery.com/2018/ibms-old-playbook/ https://stratechery.com/2018/ibms-old-playbook/
osipov 5y ago
ex-IBMer here. I rode this from 2001 until 2016 when it became clear that breaking up the company (as they recently did) would become the only sensible path forward. While many poor decisions were made inside of the company, I ultimately blame Wall Street for IBM's downfall. Remember that back in 2011, Palmisano finished strong with IBM's Watson winning Jeopardy, IBM Software delivering consistent >80% profit margins on $10Bs in revenue, and a strong services backlog. Many don't know that Palmisano's departure was preceded by a Wall Street mediated competition for the successor. IBM Software Group SVP, Steve Mills, was the obvious choice. The guy was a lifetime IBMer, intellectually superb, allegedly with photographic memory, effective public speaker, and with a proven history of leading (at the time) the 3rd largest software business in the world. Unfortunately, Wall Street didn't like Mills because he did not come across well on CNBC. The guy is chubby and doesn't look like a conventional CEO. So Ginny Rometty, with a claim to fame based on building IBM Global Business Services from on the PwC acquistion became the leading candidate. Ginny is "media friendly" and the diversity factor didn't hurt. Once Ginny came on board, leadership style changed from long-term to fickle and neurotic. Instead of committing to the hard work of building complex technology (e.g. cloud), any signs of technological challenges became reasons for business strategy changes at the top level. What started as a build decision (IBM SmartCloud) turned into a buy decision (Softlayer), followed by a build decision (IBM Bluemix), and so on. However, Ginny's biggest failure was her inability to raise capital on Wall Street. IBM's engineers weren't failing at building cloud technology because the engineers were terrible (some were, normal distribution rules still apply) but because cost cutting policies starved engineering teams though attrition and lack of hiring. Staffing a team meant bringing in internal hires w/o the right skill set or taking a gamble on offshore (global) resource. At the same time Google was hiring left and right with comparative ease (as an aside, now they are dealing with the consequences). Bottom line, Ginny couldn't get the capital to fund internal engineering efforts for the scale of the transformation needed to sustain IBM's success with machine learning (Watson) and cloud. I place the blame on Wall Street since they made the bet on Ginny and then left her out to dry.
- josipt 5y ago
  Wall Street? Couldn't raise capital? Maybe IBM could have used some of the $110 billion dollars they spent on buying back shares to, I don't know, build a real business? IBM could potentially have built what is now AWS but what did they do instead? Share buybacks. What do they have to show for that? IBM has been essentially a financial engineering machine for many years, with their ridiculous 5-year EPS targets and all the rest of it. While I was there they even removed plants, copiers, coffee machines, televisions, pads, pencils, pens and everything else in sight to "save" money. The "leadership" of IBM drove the company in to the ground, period.
chr15p 5y ago
> The chip business looks promising. Maybe IBM should double down there? I always thought IBM should have bought ARM, the combination of IBM chip tech plus ARMs designs and Red Hat for the software stack would make for an amazing tech business.
- kjs3 5y ago
  This is a really nifty 'what it' to think about, but I don't think IBM needed ARM to have owned the world. They had/have POWER & PPC, and the associated development ecosystem, which gave them processor coverage from low-end embedded thru supers. They just needed to tweak their go-to-market to match the flexibility that ARM has given their licensees and it could have been a very different story.
darksaints 5y ago
The chip business has so much potential, and they're wasting it all because they're so stuck in their enterprise marketing and sales model. There is so much demand out there for non-X86 workstations with high performance and large core counts, and they won't even touch it. There is so much demand out there for highly scalable and energy efficient cloud professors (to the point that they're developing them independently), and they won't even touch it. Just sell the damn processors to the people who want them already!
- xadhominemx 5y ago
  There are many very well funded companies working on merchant non-x86 processors. There’s no reason to think IBM would be any better at it or that customers would prefer to buy from IBM.
  - kjs3 5y ago
    There’s no reason to think IBM would be any better at it I dunno...they've been building processors since the 1950s.
thedougd 5y ago
IBM once had a deep, deep bench of engineering talent and squandered it away. They failed to maintain the engineering culture while making many strategic mistakes (cloud). Starting in the late 2000s and early 10s, executives were crying for 'cloud skills' as part of their continuous 'workforce remix'. Did Amazon build AWS by hiring cloud skills? Of course not. You build a cloud with a wide array of talent including hardware, chip design, software, and systems engineering. IBM had all that available in house.
- geodel 5y ago
  True. I remember in that big data hustle in last decade, some morons were claiming that Google is facing problem in hiring Hadoop talent. Imagine that!

vlovich123 5y ago

An email migration was that important that they decided to shake up quite a bit of the exec team? Or was the email migration stuff just internal politics playing out in the news?

rdl 5y ago
Email migration? I haven’t been following IBM very closely but a quick google search failed me here.
- NortySpock 5y ago
  https://www.theregister.com/2021/06/30/ibm_email_outage/ https://www.theregister.com/2021/06/30/ibm_email_outage/
  - rdl 5y ago
    (Thanks; I was searching under the CEO’s name and not IBM for some dumb reason; I blame lack of coffee.) Whoa.
  - echelon 5y ago
    That this could happen in any organization is surprising. That it happened in IBM is downright shocking. How do you fail an email migration and not have email for your employees? How do you let this affect billing and invoices? Why haven't they at least set up something temporary?
    - reaperducer 5y ago
      Why haven't they at least set up something temporary? Yes, just spin up e-mail addresses for 400,000 people in 177 countries. No problem. Just run it on a Raspberry Pi in the basement.
      - echelon 5y ago
        Pay Google or Microsoft to do it for you. Focus on the core business competencies, of which email is clearly not one. Edit since I can't reply: An extended email outage isn't a good look either. If IBM can't run their own critical systems, why trust them with yours? I personally think making the strategic decision to outsource demonstrates the ability and desire to find timely solutions.

datahead 5y ago

I like Whitehurst and have had the chance to meet him a few times. If you want to understand his ethos check out "The Open Organization". It details his transition from Delta to Red Hat and the transformation of his leadership style being around a lot of smart engineers and team players ready to constructively challenge each other. Good read for anyone interested in building inclusive company culture in tech. Honestly, I thought IBM would be feel less rudderless with him at the helm. I wanted IBM to become more 'red' and not RH to become more 'big blue'- but it appears this isn't the case after all... seems like a short tenure. Anyone know more about the new leadership?

htrp 5y ago
In every acquisition the Acquirer imposes on the Acquiree..... In this case, I'd bet that it's Arvind Krishna pulling people out of IBM Cloud (his old division) to run the rest of "big blue" And yes, IBM will basically bleed talent from Red Hat for the next 3 years until RHEL is a pale shadow of its former self.
- paiute 5y ago
  I expect IBM will be an Irish or similar company soon.
  - na85 5y ago
    What's an Irish company, in this context?
    - simcop2387 5y ago
      I believe they're referring to this, https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven https://en.wikipedia.org/wiki/Ireland_as_a_tax_haven
  - raverbashing 5y ago
    It already is ;)

hal-employee 5y ago

I thought Jim was going to be the next CEO.

datahead 5y ago
I did as well, and was rooting for him.

rvz 5y ago

Jim Who? The man who sold the red hat to big blue?

mrtweetyhack 5y ago

Jim Whitehurst fired

BrandoElFollito 5y ago

One of my recent revelations was when I told my teen children "... a company like IBM". To what they said "what is IBM??" They know all the large tech companies but that one was a surprise to them, they had a look at Wikipedia and said "ah yes, it was a great company in your times". Time to get some wine.

avereveard 5y ago
IBM portfolio isn't targeted to consumers like Apple's or other companies, even at peak IBM it was an office name, not a household name. The only consumer facing product they had for the longest time were cash registers, and those aren't particularly hip as to live in consumer imagination Edit: in today episode, hacker news forget they're a niche cohort.
- ComputerGuru 5y ago
  > even at peak IBM it was an office name, not a household name IBM was synonymous with PC for quite some time.
  - avidpsychlist 5y ago
    yeah, in my early youth "IBM" or "IBM Compatible" (for the value shoppers out there, such as my family) was very much a household name...if your household had a computer at all, that is.
  - lancefisher 5y ago
    This is true. You had an IBM or an IBM compatible PC running DOS and then Windows. I was well aware of IBM at a young age.
    - browningstreet 5y ago
      How many times was that phrase used in computer magazines? I kind of forgot about it, this thread has brought me back to the days I would sift through computer magazines at book stores.

htrp 5y ago

Stock is down 4%

nomoreplease 5y ago

When I talk to former IBMers (including a VP), it seems much of the outward “success” there is financial engineering, yet the business is crumbling in reality. Jim leaving amidst a chaotic, failed email migration that is impacting sales is not surprising

djrogers 5y ago
> leaving amidst a chaotic, failed email migration that is impacting sales is not surprising I'm not sure if you're trying to imply causation here, but vast sweeping changes like this rarely happen in a matter of days - it's far more likely that this has been in the works for a while, and the email mess is coincidental.
- nomoreplease 5y ago
  Coincidental yes. I was not implying causation.
- MattGaiser 5y ago
  It speaks to the standard of work they do at IBM.
sidcool 5y ago
Can you shed some more light on email migration? What was it about and why did it fail?
- Bayart 5y ago
  Previous threads : - IBM's 18-month company-wide email system migration has been a disaster: sources[1] - IBM email fiasco complicates sales deals, is worse than biz is letting on[2] [1]:https://news.ycombinator.com/item?id=27692965 https://news.ycombinator.com/item?id=27692965 [2]:https://news.ycombinator.com/item?id=27706128 https://news.ycombinator.com/item?id=27706128
mathattack 5y ago
They long ago moved from the innovation business to the share buyback business. It’s crazy that a tech company struggles so much to innovate that the best use of their cash is either returning money to shareholders, or buying companies on their behalf.

stuff4ben 5y ago

We all hoped it wouldn't happen, but RedHat is going to become more blue rather than the other way around. It's the way with all acquisitions unfortunately. As a current IBMer, I'm fascinated with this and I wonder what Arvind's end goal was here? It certainly doesn't seem like it was Jim's idea.

peytoncasper 5y ago

Cloud is the new mainframe. And IBM Cloud is terrible in comparison. All you ever hear about is how challenging Kubernetes is to manage. IBM invested in self managed Kubernetes essentially while everyone else built SaaS Kubernetes Engine’s. IBM feels like a collection of revenue lines that hasn’t really tapped into any new streams lately.

jhickok 5y ago
For what it's worth IBM has transitioned to OpenShift and it is a very successful product line. I think there are a lot of problems with marrying OpenShift with IBM's other products but OpenShift on IBM Cloud is pretty good.
- peytoncasper 5y ago
  I'm sure it's successful to some degree. They bought it, because it was a successful enterprise implementation. That being said, I'm not sure why I would leverage OpenShift on IBM Cloud when I can get practically the same thing from the other providers with a stronger ecosystem of tooling. Which leads me back to OpenShift on-premise and I'm just not sure that is where the market is at or headed right now.
  - jhickok 5y ago
    I view OpenShift, ultimately, as a bridge technology that leads to pure cloud k8s, but there is a heck of a lot of money to be made in the meantime. IBM Cloud gets new OpenShift features quicker than other cloud providers.

gigatexal 5y ago

Well so long to Redhat improving the culture at IBM

kwelv 5y ago

failwhaleshark 5y ago

Agnostic of actual political nonsense, an email scandal finally gets someone in leadership. That's the unluckiest SOB ever. PS: After an experimental physics colloquia on their campus up the hill, IBM Almaden offered me a paid dark matter RA job when I was 15. It didn't happen thanks to sabotaging parents. Also, a computer scientist-programmer lady from IBM volunteered her time at my high-school which was really cool.

tims33 5y ago

It won't be long until IBM starts the write-downs of the goodwill from the RH acquisition.

thedougd 5y ago

IBM can recover from this with some stock buybacks. Maybe borrow to get it done.

mathattack 5y ago
Only maybe? They’re bleeding cash with the failed split. Of course they will need to!

2OEH8eoCRo0 5y ago

I was considering applying to Red Hat and was assured by the fact that IBM put Jim in charge. Now that I see this I'm reconsidering Red Hat as a company.

pengaru 5y ago
My connections at RedHat say nothing has changed for them, and that RedHat is not IBM. But Jim leaving does make it look less likely that IBM will be turning into RedHat anytime soon. From what I'm told RedHat continues operating as an independent business unit under IBM. Edit: full disclosure; I too am considering RedHat, as I'd like to resume full-time work on systemd/journald in the future and there aren't exactly many places employing people to work on upstream systemd. So I may be biased in wanting to believe the above is true, grain of salt and all.
- dobsonj 5y ago
  They do indeed feel like 2 completely different companies. Different hiring processes, different employment contracts, different cultures, different offices, different tools, different management structures, different benefits. The biggest change I've seen is that they now trade under the same ticker symbol. Source: former IBMer, current Red Hatter
- decodebytes 5y ago
  I am at RH right now, engineering. Things have really not changed. I will be honest I am a little nervous that Jim has left, but I think on the whole it's still a great place to work right now. In 3-5 years , who knows?

throwawayoung 5y ago

Early redhatter here. I will always have mixed feelings about Jim. On the one hand, I fully respect him, what he does, and how he does it. I think he was a good choice for redhat at the time. However, his start also coincided with then end of the really fun times.

jhickok 5y ago
I feel that is normal in the lifecycle of a growing business-- at some point you have to exit startup mode and get corporate, no?
- markus_zhang 5y ago
  Yeah but then the fun ends unless you are into the manager mindset.
pm90 5y ago
Could you expand on that? Did he centralize planning or tighten budgets or something?
- ghaff 5y ago
  As someone who was following Red Hat as an industry analyst at the time, it was growing a lot and everything that implies came with it. To the sibling comment's point, that meant moving away from "everyone" knowing everyone else, moving away from a lot of people being involved with and knowledgeable about most of the company's technology (though JBoss was still sort of its own island at the time), and lots of things being sort of ad hoc. A lot of people had pretty flexible roles. I won't say things totally changed but, as is necessary as you grow, more process was put in place, there was a more deliberate use of data, a shift from "random acts" that made sense in isolation to more programmatic ways of doing things. These things weren't bad and were in fact needed. But, even if Red Hat wasn't really still a startup when Whitehurst took over, it wasn't really a mature large company either.

mathattack 5y ago

I wasn’t a fan of Red Hat or the acquisition but it seems like they are pretty much turning it into a (small) revenue stream to be optimized rather than something transformational. Am I the only one who feels like IBM could be circling the drain like when they missed out on PCs?

crb002 5y ago

He sold zero IBM System Z mainframes to AWS. He let thousands of IBM point of sale systems to be replaced with crap that can't buffer keystrokes - instead of modernizing the SDKs for those who know Linux and not AIX. He bought RedHat, but not Digital Ocean so they had a cloud consumers trust. He didn't win a serious contract with Facebook for kernel tuning. He didn't win a serious contract with AWS for AWS Linux 3. He let COBOL and APL continue to die instead of funding modern tooling.

blcknight 5y ago
Who is he? Jim? Jim came from Red Hat (it’s two words btw)
- yourapostasy 5y ago
  I'm guessing Arvind Krishna by the "He bought RedHat...". But I didn't realize the IBM CEO is expected by investors (or anyone really) to be that involved in those kinds of sales mentioned in the other points.

encryptluks2 5y ago

I saw this coming even before the acquisition. While Red Hat did help fund some excellent open source work, usually through acquisitions, they would never have been my first choice for partner support. Red hat is for companies that have no clue what they are doing and caters to executive management who wants their name in marketing so they can talk about how they helped make the company more successful so they can find a higher paying executive role at another large enterprise. Once a company has some descent Linux engineers and developers, they then switch to CentOS, Ubuntu, or some lighter weight distro. At that point, if you continue to engage with Red Hat, usually because some executive is getting kickbacks and has signed multi-year contracts, you just end up doing all the work yourself realizing that a lot of your problems are caused by Red Hat and that you'd be better off with another distro entirely.