35 ms·

The decline and fall of IBM

44 points by rdudekul 13y ago

deleted 13y ago
[deleted]
camus 13y ago
IBM is doing quite well. They are not falling at all. Yes they are not what they used to be , but they dont need to look like the new hotness to survive. IBM provides very high quality services for medium and big businesses. I'm not sure i get your point , just look at the numbers , they are quite good.
- jetti 13y ago
  As somebody who makes a living writing code that integrates with an IBM product in the BI space, I absolutely love IBM. They gobble up companies to increase their portfolio and do little to improve them but end up crapping it up. It leaves a lot of market space for a company to come in and write software that will make working with their product(s) easy and intuitive.
Sven7 13y ago
Elephants can't dance.
babesh 13y ago
This is actually old news. IBM has been in decline for a LONG time.
- happycube 13y ago
  And Apple Is Doomed(tm)
  - babesh 13y ago
    Interned there a long time ago and built software for an application they bought. From the internal perspective there was a lot of big company politics and mail it in behavior. From an external perspective they buy companies in growing markets and milk them but don't really improve them. The complaint is that they are not pushing the boundaries not that they don't make money. The way I am evaluating them is whether I think that are bringing something new and valuable to the world. Celebrating them is like celebrating record profits from Exxon. Its kind of sad.
mililani 13y ago
IBM was my former employer. This has been going on for a long time in the U.S. All one needs to do is go to this site: http://www.endicottalliance.org/ http://www.endicottalliance.org/ And read the forums.
wtbob 13y ago
IBM sells itself to customers as an IT company, but its true core competency is selling itself to customers who think it's an IT company. There are some very smart people there, but for the most part they mistakenly thought they were going to work for an IT company, or they are in the part which is just marketing (IBM Research comes out with some truly amazing stuff, which is basically just marketing to convince companies to buy services from IBM).
- gallinaponedora 13y ago
  Exactly. And there's nothing wrong with marketing, as long as the money comes along, which is all that "right" is: money. Some of these techies who write blogs are as smart as they are shortsighted.
tytso 13y ago
Cringely's server appears to be down. Here's a Google cache version: http://webcache.googleusercontent.com/search?q=cache:trvMH5pW7pQJ:www.cringely.com/2013/04/22/the-decline-fall-of-ibm+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:trvMH5p...
- rogerbinns 13y ago
  Cloudflare is supposed to solve that problem but instead serve a page saying they can't. Not a positive endorsement of their service.
  - smoyer 13y ago
    I've seen this on at least 6 occasions (for different sites) in the last few days. Is CloudFlare itself overloaded?
gallinaponedora 13y ago
website is down, the sweet irony... Now haven´t seen the opinion, I'm sure I have read the same already (over and over). IBM is not declining. To be magnanimous, I´d say it is only declining for narrow minded tech people who can see past their area of expertise. They are not investing, they are not innovating, they are cutting jobs in the US, bla bla bla. Well, they've been compounding at over 10% for the investor for the last 10 years, sure enough it's just a lucky strike or a mirage, right? yawn
- adammil 13y ago
  And nothing of value was lost. It's a blog post with an intentionally hyperbolic headline to let you know he has a new book to sell.
- krmmalik 13y ago
  Agreed. I can't reach the article as the site is down, so my comment may be out of context, but i do agree they're doing something right. I haven't been following their stock price, but i do take the odd glance at their movements. I was in talks with an employee at a blue-chip here in the UK, about assisting them with their digital strategy. They clearly needed alot of help. Unfortunately a major player swooped in - fast forward 12 months - they've helped them turn things around and now the client is doing great. Turns out the major player that swooped in was IBM. Who knew IBM was actively doing digital marketing. I mean they're an IT company, right? I.e. networks, servers, software. I think the reality is, they're a consulting company for big business that will help their clients get anything done and it only has to be remotely technical. So i think they'll be around for a long time to come.
  - seanmcdirmid 13y ago
    Right! They are mostly a consulting company now (much like PwC consulting was...), and we should judge them as such. As I'm interested in tech R&D, that makes them completely uninteresting to me, and I don't think they should be valued higher than my current employer (Microsoft), but the market works in mysterious ways.
- sinnerswing 13y ago
speeder 13y ago
A 101 processor machine with 4 cores each and 5.5ghz that is actually sold and profitable does not sound like something a fallen company can pull... It sounds like a machine a business would use too, you know, like someone named International Business Machines might build and sell.
obtino 13y ago
I used to be a developer with IBM and I was quite surprised that people actually paid for some of their products. The majority of the software sales were done as a part of 'packages' and 'solutions'. There was very little innovation happening there. The only way any new 'solutions' were developed in the business were through acquisitions.
sinnerswing 13y ago
decline and fall of IBM? IBM transformed itself from a manufacturing company to one of the largest services company in the world. HP, Dell, everyone is getting out of the hardware business (low margin, etc.) and following IBM's lead (HP bought EDS and is trying to get rid of their hardware business. Dell bought Perot Systems 4 years ago and is in the process of going private so it can transform itself into a mini-IBM). IBM's return on invested capital grew from 14.92 (2003) to 31.39 (2012). HP from 9.98 (2006) ROIC to 14.97 (2012) DELL from 43.33 (2003) to 11.32 (2012) GOOG from 30.56 (2003) to 15.29 (2012) <=== going into the hardware business (MOTOROLA) is a bad idea for GOOG MSFT from 17.66 (2003) to 22.66 (2012) AAPL from 1.55 (2003) to 42.84 (2012) If you noticed, IBM's ROIC is higher than other tech companies except Apple.
- ellicottvilleny 13y ago
  And now IBM is headed back into the financial toilet again. Consulting and Services are going to keep IBM around, and the name will last another 100+ years, but their stock price isn't going anywhere but down.
forrestthewoods 13y ago
When I look at their net income (~16 billion) and stock two words that do not come to mind are decline and fall. http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1371076142146&chddm=484449&chls=IntervalBasedLine&q=NYSE:IBM&ntsp=0&ei=cva4UYj9DY7-iQKnHA http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&c...
- ajross 13y ago
  Their share of the tech industry (which they used to utterly dominate at a scale we hadn't seen since the days of Standard Oil) has been on an inexorable downward path for almost three decades now. Yes, they're still large and influential, and even "successful" in a limited sense. But in context I don't think you can look at their recent history as one of ascendance.
  - reinhardt 13y ago
    A downward spiral for almost three decades while still being a multi-billion dollar company is a problem most hip startups would kill to have.
    - ctdonath 13y ago
      Q: how to create a small fortune? A: start with a large fortune.
      - lmg643 13y ago
        A: start with a large fortune, and buy an airline.
  - forrestthewoods 13y ago
    IBM is the world's 24th most profitable company (2011). Only 23 companies in the entire world - not country but world - made more profit than IBM. Their revenue and profit grows year over year. Any definition of the term "downward path" that includes IBM is useless and provides no value. http://money.cnn.com/magazines/fortune/global500/2012/performers/companies/profits/ http://money.cnn.com/magazines/fortune/global500/2012/perfor...
elaineo 13y ago
"Decline and fall" because IBM missed one earnings target after 4 years of positive earnings surprises (or more, I didn't look any farther back than 2009). Seems a bit preemptive. The author's chief complaint seems to be that the management is incompetent, but IBM has been known for excellent financial management for the past 2 decades, and the CEOs have not changed recently.
gavinh 13y ago
Ah, I was waiting for Cringely's annual IBM-doom-and-gloom post.
- seanmcdirmid 13y ago
  I really don't know why he bothers anymore. IBM is just a consulting company now that makes money but has little to do with actual technological innovation. Its just not interesting anymore as they are irrelevant.
ChuckMcM 13y ago
Since his sight seems to be down I'm left commenting on the headline [1](sigh) but my guess is that the arguments are the same as they are for the 'decline and fall of Microsoft' or any other company where their relative standing in a market that changed dramatically over their life, also changed the way in which folks perceived them. Not to get all Grey Beard on y'all but back in the day IBM was the big behemoth and startups like Sun Microsystems or Microsoft even were the challengers. IBM was created when computers filled rooms, businesses ran on paper processes, and "uploading your database" consisted of tens or hundreds of young women typing on mechanical contraptions called "card punches." And they are still here and still making money. And that last bit is what amazes me. Look at the 'big names' when they started, Rand, Sperry, Univac, Cray, Control Data, Digital Equipment Corporation, Etc. They are on track to become the first 100 year old "computer" company. (depending on when you think of it as becoming one) and they continue to dominate in patents issued. What IBM has created is a very durable technology corporation, which is up there with Corning Glass and DOW Chemical. Somehow I suspect they will prove Cringley wrong. [1] Ok so I read the cached copy and as I expected Cringely is extrapolating out from a few point changes into some apocalyptic demise. Previous columnists in Datamation predicted that once IBM's monopoly over peripherals was broken (1977?) they were doomed as well. Didn't happen of course.
kragen 13y ago
I think the first time I saw Cringely predict the death of IBM, it was in Accidental Empires, where he was confident that their mainframe business, and therefore their entire company, would collapse at the beginning of 2000 because of the Y2K bug.

44 points by rdudekul 13y ago

deleted 13y ago

[deleted]

camus 13y ago

IBM is doing quite well. They are not falling at all. Yes they are not what they used to be , but they dont need to look like the new hotness to survive. IBM provides very high quality services for medium and big businesses. I'm not sure i get your point , just look at the numbers , they are quite good.

jetti 13y ago
As somebody who makes a living writing code that integrates with an IBM product in the BI space, I absolutely love IBM. They gobble up companies to increase their portfolio and do little to improve them but end up crapping it up. It leaves a lot of market space for a company to come in and write software that will make working with their product(s) easy and intuitive.

Sven7 13y ago

Elephants can't dance.

babesh 13y ago

This is actually old news. IBM has been in decline for a LONG time.

happycube 13y ago
And Apple Is Doomed(tm)
- babesh 13y ago
  Interned there a long time ago and built software for an application they bought. From the internal perspective there was a lot of big company politics and mail it in behavior. From an external perspective they buy companies in growing markets and milk them but don't really improve them. The complaint is that they are not pushing the boundaries not that they don't make money. The way I am evaluating them is whether I think that are bringing something new and valuable to the world. Celebrating them is like celebrating record profits from Exxon. Its kind of sad.

mililani 13y ago

IBM was my former employer. This has been going on for a long time in the U.S. All one needs to do is go to this site: http://www.endicottalliance.org/ http://www.endicottalliance.org/ And read the forums.

wtbob 13y ago

IBM sells itself to customers as an IT company, but its true core competency is selling itself to customers who think it's an IT company. There are some very smart people there, but for the most part they mistakenly thought they were going to work for an IT company, or they are in the part which is just marketing (IBM Research comes out with some truly amazing stuff, which is basically just marketing to convince companies to buy services from IBM).

gallinaponedora 13y ago
Exactly. And there's nothing wrong with marketing, as long as the money comes along, which is all that "right" is: money. Some of these techies who write blogs are as smart as they are shortsighted.

tytso 13y ago

Cringely's server appears to be down. Here's a Google cache version: http://webcache.googleusercontent.com/search?q=cache:trvMH5pW7pQJ:www.cringely.com/2013/04/22/the-decline-fall-of-ibm+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:trvMH5p...

rogerbinns 13y ago
Cloudflare is supposed to solve that problem but instead serve a page saying they can't. Not a positive endorsement of their service.
- smoyer 13y ago
  I've seen this on at least 6 occasions (for different sites) in the last few days. Is CloudFlare itself overloaded?

gallinaponedora 13y ago

website is down, the sweet irony... Now haven´t seen the opinion, I'm sure I have read the same already (over and over). IBM is not declining. To be magnanimous, I´d say it is only declining for narrow minded tech people who can see past their area of expertise. They are not investing, they are not innovating, they are cutting jobs in the US, bla bla bla. Well, they've been compounding at over 10% for the investor for the last 10 years, sure enough it's just a lucky strike or a mirage, right? yawn

adammil 13y ago
And nothing of value was lost. It's a blog post with an intentionally hyperbolic headline to let you know he has a new book to sell.
krmmalik 13y ago
Agreed. I can't reach the article as the site is down, so my comment may be out of context, but i do agree they're doing something right. I haven't been following their stock price, but i do take the odd glance at their movements. I was in talks with an employee at a blue-chip here in the UK, about assisting them with their digital strategy. They clearly needed alot of help. Unfortunately a major player swooped in - fast forward 12 months - they've helped them turn things around and now the client is doing great. Turns out the major player that swooped in was IBM. Who knew IBM was actively doing digital marketing. I mean they're an IT company, right? I.e. networks, servers, software. I think the reality is, they're a consulting company for big business that will help their clients get anything done and it only has to be remotely technical. So i think they'll be around for a long time to come.
- seanmcdirmid 13y ago
  Right! They are mostly a consulting company now (much like PwC consulting was...), and we should judge them as such. As I'm interested in tech R&D, that makes them completely uninteresting to me, and I don't think they should be valued higher than my current employer (Microsoft), but the market works in mysterious ways.
sinnerswing 13y ago

speeder 13y ago

A 101 processor machine with 4 cores each and 5.5ghz that is actually sold and profitable does not sound like something a fallen company can pull... It sounds like a machine a business would use too, you know, like someone named International Business Machines might build and sell.

obtino 13y ago

I used to be a developer with IBM and I was quite surprised that people actually paid for some of their products. The majority of the software sales were done as a part of 'packages' and 'solutions'. There was very little innovation happening there. The only way any new 'solutions' were developed in the business were through acquisitions.

sinnerswing 13y ago

decline and fall of IBM? IBM transformed itself from a manufacturing company to one of the largest services company in the world. HP, Dell, everyone is getting out of the hardware business (low margin, etc.) and following IBM's lead (HP bought EDS and is trying to get rid of their hardware business. Dell bought Perot Systems 4 years ago and is in the process of going private so it can transform itself into a mini-IBM). IBM's return on invested capital grew from 14.92 (2003) to 31.39 (2012). HP from 9.98 (2006) ROIC to 14.97 (2012) DELL from 43.33 (2003) to 11.32 (2012) GOOG from 30.56 (2003) to 15.29 (2012) <=== going into the hardware business (MOTOROLA) is a bad idea for GOOG MSFT from 17.66 (2003) to 22.66 (2012) AAPL from 1.55 (2003) to 42.84 (2012) If you noticed, IBM's ROIC is higher than other tech companies except Apple.

ellicottvilleny 13y ago
And now IBM is headed back into the financial toilet again. Consulting and Services are going to keep IBM around, and the name will last another 100+ years, but their stock price isn't going anywhere but down.

forrestthewoods 13y ago

When I look at their net income (~16 billion) and stock two words that do not come to mind are decline and fall. http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1371076142146&chddm=484449&chls=IntervalBasedLine&q=NYSE:IBM&ntsp=0&ei=cva4UYj9DY7-iQKnHA http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&c...

ajross 13y ago
Their share of the tech industry (which they used to utterly dominate at a scale we hadn't seen since the days of Standard Oil) has been on an inexorable downward path for almost three decades now. Yes, they're still large and influential, and even "successful" in a limited sense. But in context I don't think you can look at their recent history as one of ascendance.
- reinhardt 13y ago
  A downward spiral for almost three decades while still being a multi-billion dollar company is a problem most hip startups would kill to have.
  - ctdonath 13y ago
    Q: how to create a small fortune? A: start with a large fortune.
    - lmg643 13y ago
      A: start with a large fortune, and buy an airline.
- forrestthewoods 13y ago
  IBM is the world's 24th most profitable company (2011). Only 23 companies in the entire world - not country but world - made more profit than IBM. Their revenue and profit grows year over year. Any definition of the term "downward path" that includes IBM is useless and provides no value. http://money.cnn.com/magazines/fortune/global500/2012/performers/companies/profits/ http://money.cnn.com/magazines/fortune/global500/2012/perfor...

elaineo 13y ago

"Decline and fall" because IBM missed one earnings target after 4 years of positive earnings surprises (or more, I didn't look any farther back than 2009). Seems a bit preemptive. The author's chief complaint seems to be that the management is incompetent, but IBM has been known for excellent financial management for the past 2 decades, and the CEOs have not changed recently.

gavinh 13y ago

Ah, I was waiting for Cringely's annual IBM-doom-and-gloom post.

seanmcdirmid 13y ago
I really don't know why he bothers anymore. IBM is just a consulting company now that makes money but has little to do with actual technological innovation. Its just not interesting anymore as they are irrelevant.

ChuckMcM 13y ago

Since his sight seems to be down I'm left commenting on the headline [1](sigh) but my guess is that the arguments are the same as they are for the 'decline and fall of Microsoft' or any other company where their relative standing in a market that changed dramatically over their life, also changed the way in which folks perceived them. Not to get all Grey Beard on y'all but back in the day IBM was the big behemoth and startups like Sun Microsystems or Microsoft even were the challengers. IBM was created when computers filled rooms, businesses ran on paper processes, and "uploading your database" consisted of tens or hundreds of young women typing on mechanical contraptions called "card punches." And they are still here and still making money. And that last bit is what amazes me. Look at the 'big names' when they started, Rand, Sperry, Univac, Cray, Control Data, Digital Equipment Corporation, Etc. They are on track to become the first 100 year old "computer" company. (depending on when you think of it as becoming one) and they continue to dominate in patents issued. What IBM has created is a very durable technology corporation, which is up there with Corning Glass and DOW Chemical. Somehow I suspect they will prove Cringley wrong. [1] Ok so I read the cached copy and as I expected Cringely is extrapolating out from a few point changes into some apocalyptic demise. Previous columnists in Datamation predicted that once IBM's monopoly over peripherals was broken (1977?) they were doomed as well. Didn't happen of course.

kragen 13y ago

I think the first time I saw Cringely predict the death of IBM, it was in Accidental Empires, where he was confident that their mainframe business, and therefore their entire company, would collapse at the beginning of 2000 because of the Y2K bug.