

Goodbye, IBM. Seriously. - gnufs
http://mobileopportunity.blogspot.com/2011/04/goodbye-ibm-seriously.html

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Cherian_Abraham
When 27% of those quarterly profits is from the iPhone, the bigger question is
how long can apple keep growing in this rate?

IBM has its fingers and toes in a lot of things, including SmartGrid,
Healthcare IT to name a couple. It is a good bet to say that it will take more
than one bad product iteration to knock them off their perch. Ripping IBM off
of the enterprise market will be akin to cleaning crap off of velcro. Not
easy.

Apple as it grows defying expectations has to both make sure that future
iterations of its products can keep enchanting their customers as well and
stay innovative (at their current click) once Jobs is no longer involved in
making product decisions.

~~~
6ren
There is tremendous growth left in the ARM/smartphone form-factor (not
necessarily touch), because it will eventually disrupt the desktop. It would
seem difficult for apple to retain dominant marketshare (Android passed it
already) once processors get fast enough that apple's ingenious integration
isn't needed anymore, but apple will grow with it. Apple will also still have
strengths of design, marketing, installed base of apps, AppStore, developers,
experience in all of that, lower costs, ahead of the engineering learning
curve etc. I agree that without Steve, they'll probably find it hard to pull
off the next great revolution (like many companies without their firebrand
founders, eg HP).

IBM doesn't need to lose for apple to grow larger than them. You're right that
their diversification gives them safety, but as Buffett says of growth: put
all your eggs in one basket and _watch that basket_.

~~~
bigfudge
Android is only ahead if you don't count ipod touches. I think Apple has a
great chance of being the or at least a major player in this market.

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edw
Insightful comment on the page: "There are tons of companies that Apple has
crushed...IBM is not one of them."

Apple and IBM compete in the same sort of way that all humans compete for
oxygen: in a not-very-meaningful way.

IBM's move into PCs was defensive: As businesses started thinking about
adopting these toys built from parts by neck-bearded garage trolls, the
company wanted to make sure they didn't get left behind. Would every desk in
corporate America have a computer on it today if IBM never got into PCs? I'm
not so sure.

IBM's always been a top-down company: it sells to bosses who are telling their
minions what they're going to be using, while Apple's approach has almost
always been much more bottom-up.

~~~
adsr
I don't think the main point was that Apple have crushed IBM, but to give some
perspective on Apples recent success with a historical context.

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sdkmvx
IBM is still perfectly relevant in the same target market they have been
dominating for the last 100 or so years. Selling things to gigantic
businesses. This is their name: International _Business_ Machines.

IBM stopped selling personal computers when they stopped being uniquely
relevant to big businesses. They still sell mainframes along with a long list
of other things.

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jbail
Apple and IBM do different things in 2011 than they did in 1981. Apple is
primarily a consumer hardware company. IBM is primarily a business-to-business
software and services company. The author is right, Apple has completely
crushed it over the past decade or so...but IBM hasn't been going after the
consumer hardware market for awhile. The comparison is sort of apples and
oranges. Over the course of 30 years, technology companies will obviously need
to adapt to changes.

Also keep in mind (and this isn't meant to disparage Apple), but they were
almost dead until one man, Steve Jobs took over. It's his vision that brought
Apple back from the dead.

Over the long term (30 years from now), we'll have to see how that plays out.
I couldn't name one specific person at IBM who's responsible for their success
and they're doing very well these days too.

~~~
qohen
> I couldn't name one specific person at IBM who's responsible for their
> success

One (very) specific person: Louis V. Gerstner.

Like Jobs, he saved his company. Unlike Jobs, he was very much an outsider,
but this apparently was what IBM needed to push change, given their hidebound
culture.

From: <http://en.wikipedia.org/wiki/Louis_V._Gerstner,_Jr.#IBM>

"Gerstner is credited with saving IBM from going out of business in the early
1990s. In his memoir, Who Says Elephants Can't Dance?, he describes his
arrival at the company in April 1993, when an active plan was in place to
disaggregate the company. The prevailing wisdom of the time held that IBM's
core mainframe business was headed for obsolescence. The company's own
management was in the process of allowing its various divisions to rebrand and
manage themselves — the so-called "Baby Blues."

Gerstner reversed this plan, realizing from his previous experiences at RJR
and American Express that there remained a vital need for a broad-based
information technology integrator. His decision to keep the company together
was the defining decision of his tenure. The subsequent refocusing on the IT
services business (which grew to nearly 50% of the IBM's revenues), the
embrace of the Internet as a business phenomenon, and a broad effort to revive
the company's culture are widely seen as having resulted in one of the most
remarkable turnarounds in business history."

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Ygor
Do you think that we need companies like IBM? I mean, by the income metric
Apple is obviously better than IBM. But, if there was no IBM, would the space
be filled with multiple smaller and more profitable companies, or would there
just be a void until some other company emerged as a "big, stable,
uninnovative" behemoth?

I thought IBM was still doing some great stuff. Maybe not as profitable and
cool as some more modern companies, but still very important things which
actually do make the world a better place, albeit not making a huge profit. I
might be wrong, ofc.

~~~
jallmann
What IBM does is not exciting? Granted, they might not be working on self-
driving cars, or motion-controlled video games, or God forbid, a tablet.

But the scope of IBM is almost breathtaking. Look into the capabilities of
mainframes, consider for one second the amount of engineering required, and
you will nerdgasm. They do tons of research in electronics, semiconductors and
fabrication. They are at the forefront of computer science -- they beat
Jeopardy, beat chess, and sequenced the human genome. Then they sell a ton of
other things like huge, robotic tape libraries. Seriously, go see one in
action.

A few $billion in profit per quarter is nothing to sneeze at either.
(<http://www.google.com/finance?q=NYSE:IBM>) I think the economies of scale
play a big hand here -- I'm not sure if multiple smaller companies could eke a
comparable, combined level of profitability, much less allocate resources for
exploratory projects like Watson.

At the scale IBM operates at, Apple is essentially a one-hit wonder, being in
a few very closely related _consumer_ segments. It remains to be seen whether
they can sustain their current momentum.

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npalli
What I find Surreal is that IBM is still the company to beat in 2011. I mean,
by 1981 they were already the king of the hill for a good 15-20 years. To put
that into perspective, who thinks apple, (or google, microsoft) will be
relevant in 2061!!

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BenSS
Apple is not a threat to IBM's core businesses. IBM as it is currently
operating is. The current awesome results to investors is at the expense of
the US workforce and non-research lab innovation.

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api
What I love about Apple's success?

It's mostly based on _design_ : good UI design and good aesthetic design.
Apple is almost a fashion company.

It's not based on any of the things that the windup MBA idiots always harp on:
marketing, performance, salesmanship, connections, etc.

Sure, Apple has those things. Apple is great at marketing, their stuff
performs well, and they have plenty of salesmen. But so does everyone else.
Apple's success is based primarily on aesthetics and user experience, which
nearly all players in the industry have ignored completely in favor of the
cliches beloved of MBAs.

~~~
random42
> _Apple's success is based primarily on aesthetics and user experience._

I cannot say that Marketing and Salesmanship is not as important factor of the
success of the company, which has undoubtedly the most charismatic CEO of this
era, and one of the best salesman in the business.

~~~
bigfudge
I never get this. Sure Jobs is a good salesman. But do you think Apple would
be such big news on HN if it weren't for the product. I mean just look at the
damn things... some people don't like OSX or iOS, but the sheer polish of the
Air, Macbook Pro and the ipad are amazing. They've come a long way from those
horrible beige boxes in the mid 90s.

~~~
random42
I am certainly not saying that Apple products are not excellent. I am just
saying that Marketing/Salesmanship/PR etc. also has a part to play in Apple's
success.

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Apocryphon
Microsoft is the new IBM.

