
Next Week's Bloodbath At IBM Won't Fix The Real Problem - randomname2
http://www.forbes.com/sites/robertcringely/2015/01/22/next-weeks-bloodbath-at-ibm-wont-fix-the-real-problem/
======
pesenti
IBM employee here. I have no idea if the cuts are true or not but keep in mind
that Cringely has made dooms day predictions in the past that were widely
innacurate, see for example:
[http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_0020...](http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html)
or [http://www.cringely.com/2012/04/18/not-your-fathers-
ibm/](http://www.cringely.com/2012/04/18/not-your-fathers-ibm/)

I am part of Watson and we have been hiring a lot (as well as providing great
internships).

~~~
nowarninglabel
It's amazing how if someone said blatantly false things over and over again
about Google or Yahoo laying off employees then it would get flagged out of
existence, yet somehow Cringely makes the same false "prediction" over and
over again about IBM and people vote it right up. Check your source people,
you are actively spreading disinformation by a known doomsday prophet, and
like most doomsday prophets he has been wrong every time.

~~~
jsprogrammer
Does IBM never do large firings?

~~~
bigiain
The article almost opens with a line about the previous biggest ever layoff in
history of 60,000 people. In 1993. By IBM...

~~~
jsprogrammer
Link has clickbait all over it. Hasn't hooked me yet.

But more seriously, have there been any other large, but not "biggest ever"
firings since 1993? Anyone have a chart?

~~~
bigiain
I dunno - 60,000 people? I can't think of anything of that magnitude (not that
I keep on top of that kind of stuff...)

------
hristov
It would be better if we linked to the original Cringely article. This is
basically a retelling of the same.

[http://www.forbes.com/sites/robertcringely/2015/01/22/next-w...](http://www.forbes.com/sites/robertcringely/2015/01/22/next-
weeks-bloodbath-at-ibm-wont-fix-the-real-problem/)

~~~
dang
Ok, we changed the url from [http://www.itworld.com/article/2875112/ibm-is-
about-to-get-h...](http://www.itworld.com/article/2875112/ibm-is-about-to-get-
hit-with-a-massive-reorg-and-layoffs.html). Thanks.

------
abalone
So yeah, the move to the cloud is hurting IBM's traditional core business. But
as to the criticism of the current CEO for "doing nothing", the partnership
she just inked with Apple seems like a step in the right direction. It's
exactly the thing they should be doing to adapt themselves to the cloud era.

Look at this stuff. It's fucking beautiful:
[https://www.apple.com/business/mobile-enterprise-
apps/](https://www.apple.com/business/mobile-enterprise-apps/)

Enterprises don't need as much help setting up and running their disappearing
data centers. But they _do_ still need help building better software for their
business. And more than ever before there's a focus on the ROI of better
designed software. Definitely most enterprises don't have that kind of
software expertise in house.

I think it would be mistake to advise IBM to try to just focus on competing
with Amazon. The margin in enterprise services has moved up the stack and
that's where it looks like IBM is moving. Definitely some pain along the way
though.

~~~
ams6110
Not that beauty is a bad thing, per se, but it's never been high on the list
of requirements for enterprise software. Functionality and configurability
tend to be more important.

~~~
rodgerd
Things are changing; people see no reason to put up with shitty design and
hard to use applications in-house, especially if their employer has nice
customer-facing applications. It's analogous to the PC revolution, when people
started using their own copy of VisiCalc or Lotus.

~~~
ekianjo
> Things are changing; people see no reason to put up with shitty design and
> hard to use applications in-house, especially if their employer has nice
> customer-facing applications. It's analogous to the PC revolution, when
> people started using their own copy of VisiCalc or Lotus.

Except that "people", i.e. employees, are not the decision makers when it
comes to what software/hardware they get.

~~~
rodgerd
When the C _O or GM level staff start using their personal iPads because they
hate battling with their XP-era laptops_ so much*, change happens.

------
kev009
I'm always kind of shocked that people are so meek and enamored with the idea
of stability that they just shoot themselves in the foot. The tech industry is
the wild west and most people in it aren't very good because they either lack
drive, talent or the backbone to rise above those who lack drive and talent.

A better outlook is to make IBM (or any other company) work for _you_.

Work there for a couple years. Be bold. Challenge inept management and others
that are only looking for stability and a paycheck regardless of outcomes.
When you get tired of being stonewalled, bail to a smaller business and poach
the people you identified as top talent.

Nobody's looking out for you but you. It's silly to expect an impersonal thing
like a corporation to always try and take care of you. Making the company work
for you doesn't have any factor in leading an ethical and fulfilling career.
You can still deliver real value for a while despite a bloated middle
management culture that is scared of the idea of bottom up leadership.

~~~
PakG1
It is truly not fun being that guy:
[http://randsinrepose.com/archives/a-toxic-
paradox/](http://randsinrepose.com/archives/a-toxic-paradox/)

This is especially true if you're in an organization as large and bureaucratic
as IBM and not in a senior position. I think you overestimate how much
influence you can really have on upper management. True story when I worked
there as a GDF lead, talking to a senior manager.

Me: "Hey, I think I found an error in the formula we use to calculate one of
the GDF metrics. This is creating garbage data." SM: "Oh wow, you're right."

Later.

SM: "Actually, we made the formula that way on purpose. It's OK." Me: "What?
How? Why?" SM: "It's OK, don't worry about it."

What am I supposed to do then? Escalate to a VP? On a regular basis? I did. A
senior manager got in touch with my manager and delivered the message that I
need to get in line. I quote: "No more complaining." Depending on the
environment where you're working, it's not easy to be the devil's advocate.
It's usually not easy in the first place. In certain environments, it's almost
impossible, you might as well have not even joined.

edit clarification: GDF was IBM's attempt to create its own version of the Six
Sigma program.

~~~
kev009
You're most often actually fighting a political battle masqueraded as
something else, and a necessary shift is to recognize that early on.

Once you realize it, you can work on those obstacles. By-with-and-through:
there will be friends, frenimeies, and enemies that you can use and be used by
to advance whatever you set out to do. You can often play political factions
against each other and ride between two or more to propel your own. If that
sounds deviant, it's not - it's real leadership and starts at the lowest
levels.

Set an aim point rather than specific criteria for success, so you may lose
some battles but you can win you own long term campaigns.

As long as you are ethical and not simply an outright ass, the penalty for
crossing the line is not really a penalty - maybe you get squeezed out of
somewhere you don't want to be and are at least as valuable elsewhere. When
you get some confidence, you'll find that the line is quite a bit farther than
you expected once you enact this outcome based mindset that is in line with
the real intent of the organization.

It will never be fun all the time. But you're there for some reason, and the
alternative is at best purposeless mediocrity.

Some further sources of reading: *
[http://www.artofmanliness.com/2014/01/22/john-boyds-roll-
cal...](http://www.artofmanliness.com/2014/01/22/john-boyds-roll-call-do-you-
want-to-be-someone-or-do-something/) * I stumbled across some interesting
second hand stuff of a mainframer that brought Boyd inside Big Blue:
[http://www.garlic.com/~lynn/subboyd.html](http://www.garlic.com/~lynn/subboyd.html).
Some of it seems interesting.

~~~
PakG1
I understand what you're saying. But I have several reasons why I think it
doesn't matter for what I'm saying. Perhaps we are not on the same page.
Apologies if this is long.

1\. I am claiming that for many of these battles, it's not simply political.
It's a fight for the existential foundation of what the organization should be
all about. When the web team at Microsoft went head-to-head with the Windows
team in the late 90s, that wasn't simply a brouhaha over who should get power.
It was much more than that. It was a question about Microsoft's future ability
to dominate/survive/die. Yes, the weapons to fight the battles and the war are
political in nature. But something at that level isn't simply about the
politics.

 _> You're most often actually fighting a political battle masqueraded as
something else, and a necessary shift is to recognize that early on._

Likewise, let’s not let the weapons being used mislead us to incorrectly
conclude what the fight's really all about.

2\. Once the strategy has been decided by the top, it's hard for one person,
especially at lower levels, to change the momentum. The executive team is all
in. If an executive is not all in, the executive is demoted, reallocated, or
leaves the company. It's the CEO's job to get his/her executive team on the
same page. He/she should have the political savvy necessary to accomplish
this. It’s each executive's job to get their directors on the same page. It's
each director's job to get their senior management team on the same page. It's
each senior manager's job to get their managers on the same page. And it keeps
trickling down until it reaches the bottom. A CEO who is not able to achieve
this organizational buy-in cannot be considered someone who can lead the
company. Someone at the bottom cannot and will not change the existential
direction of the company, no matter how politically savvy he/she is.

Once Microsoft settled that Windows would be their focus and won the browser
wars with IE6, they sat on that for years. It would not have mattered how
politically talented you were, you were not going to convince Microsoft to
invest into improving IE for a long, long time. Pretty much the only way to
win at this is to be a super genius and create something fantastic on your own
time in secret from the organization. Like the story of how OSX was ported to
x86. [http://www.theverge.com/2012/6/11/3077651/apple-intel-mac-
os...](http://www.theverge.com/2012/6/11/3077651/apple-intel-mac-os-x-
retrospective) Otherwise, you need a concerted effort from multiple parties
and sponsorship and political protection from a very senior level.

3\. _> It will never be fun all the time. But you're there for some reason,
and the alternative is at best purposeless mediocrity._

Or you can leave if you can’t find any reason to stay. Staying can also mould
you into purposeless mediocrity, whether or not you resist it. Let’s not
underestimate our environment’s ability to influence our life, mindset, and
behaviour. When I was graduating from university, I asked a prof which job
offer I should take. He said whatever I choose, be careful if I choose the
larger corporations. He said they’re like zoos. If you stay in them too long,
you become tame and become unable to survive in the wild again.

Another piece of advice I received from a very senior engineer who had run his
own fairly successful company was to always be aware of companies where
decisions and promotions are made based on politics instead of data and merit.
In such organizations, the people who stay and get promoted are the ones who
are the most politically savvy, not necessarily the ones who are
correct/capable. Sometimes there’s overlap. Often, there isn't. Ultimately, I
think we have to decide if we’re more interested in becoming good at politics
or good at doing our real jobs. Politics are supposed to be a means to an end,
not the final product that a customer receives. As such, it’s better to have
people who are good at product, and it’s just a nice bonus if they’re also
good at politics because politics are inevitable, especially as an
organization grows. But the focus should never be on politics primarily.

Note: I've never worked for Microsoft, I've only cited their examples here
because their history is so well-documented through various books and media,
especially due to their monopoly trial. I just chose the example that I
thought would best get my point across. I have worked in other large
corporations where my job was to create organization-wide disruptive change.
We actually won an international award for it. But nobody would relate to that
stuff. ;) My thoughts are mostly taken from those experiences, Microsoft is
just the vehicle to convey those thoughts.

------
quacker
Wow. 111,800 people is a huge number. That's a whole city looking for work,
and over $1 billion saved (in the long run) for each $10000 of employee
salary.

> The question I have to ask is why isn't Rometty one of the 110k. IBM has
> seen 11 straight quarters of declining revenue and it's hemorrhaging
> customers, according to both my source and Cringely.

Yep.

So what should IBM do here? For one, IBM needs a complete makeover. Why should
I pick SoftLayer over AWS, Google, Microsoft, etc? They need a new image,
something that will draw customers and something other than being the
canonical story of corporate bloat and mismanagement.

~~~
eliben
Keep in mind that a developer being paid $100K gross actually costs the
company way, way more. Health insurance and other benefits, cost of office
space, electricity, transportation, and so on. It varies greatly between
companies and countries, but it's not unusual to have "man year" cost 2x more
than what is actually being paid as direct salary to the employee.

~~~
wavefunction
Office space+additional overhead could be reduced by remote workers. That
would involve transforming management culture though, which is long overdue
for it. And I'm not talking about some new crappy book about moving cheese or
others of its ilk.

------
joshvm
A rule of thumb I've heard from various companies is that employees should be
worth at least three times their salary to the company. That is your turnover
should be more than sum(3*salary_i) for i employees.

A nice Fermi problem: IBM's revenue (2014) is around $90bn, from this rule of
thumb this could support around 300,000 developers at a mean salary of $100k.
From the model above, IBM's 400k employes should be producing a turnover of
$120bn. The shortfall of $30bn equates rather nicely to the 100k employees
they're laying off.

~~~
Cookingboy
I highly doubt all IBM's employees are developers, in fact I highly doubt it's
even over 30%.

~~~
joshvm
Of course not, this is a gross oversimplification. I was just surprised at how
well the numbers worked. I would argue though, that it _is_ a good rule of
thumb, i.e. their revenue is not sustainable given the number of employees
that they have.

IBM like any company will employ support staff, admin/HR, cleaners, managers
and so on. Plenty of those people earn over $100k and plenty of people earn a
lot less. Ultimately we don't know the mean salary of the people they're
(maybe) laying off.

But hey, it's a Fermi problem, order of magnitude. I would guess it's not too
far off.

------
fat0wl
this may be true. I use a lot of IBM server/development techs & pretty much
all of them are missing the magic they claim, boiling down to "confusing
forced development paradigm that bleeds millions from your company in
infrastructure and niche developer costs" (Web Experience Factory,
Coremetrics, Portal etc.). None of the out-of-the-box-everything-integrates-
seamlessly aspect is there, despite that being the whole basis for these
monstrous sales prices. In short, many of their products have laughably little
value and even non-technical corporate management is realizing this.

(You can tell a lot of the software is sold with IBM thinking "We'll tell them
its their fault for a couple of years unless they hire a few of our
consultants, then if they realize the product actually sucks hopefully we will
have an upgrade ready by then.")

However, whenever I see articles from that Cringely dude (the one referenced
repeatedly in this summary) I have to think "eh, maybe.... I'll believe it
when I see it". He is pretty much an anti-IBM conspiracy theorist from what I
can tell, though of course they are a strange enough organization that a lot
of what he says turns out to be true.

[http://en.wikipedia.org/wiki/Robert_X._Cringely](http://en.wikipedia.org/wiki/Robert_X._Cringely)

[http://www.cringely.com/](http://www.cringely.com/)

~~~
aragot
I've worked with IBM ClearQuest and IBM FileNet and I concurr, those products
are retarded bloats of off-market junk. The free golf courses in Orlando are
nice, though, so I've renewed the purchase for two more years.

~~~
stuff4ben
Yup. Message Broker wasn't all that bad, but the all-expenses paid trip to
Vegas for a week was better.

~~~
fat0wl
hah i am jealous of you both... i don't get the kickbacks, i just get one more
team of consultants that i have to work with on every project who relish the
tiny bit of authority they have now been granted (Message Broker team thinks
they're hot shit cuz they are a bottleneck on every project & we can't revise
our service interfaces without their permission).

Funny thing is, all the consultants who specialize in these products are awful
pseudo-programmers & I end up bypassing their techs (WMB, BPM, etc.) with pure
Java solutions whenever possible since the overhead of speaking to them
creates like a 10x productivity loss. If the nosy busybodies (awful below
average pseudo-programmers within our own group) didn't tattle to mgmt to help
them reign us back in, the whole company would be none-the-wiser & we'd get
work done at breakneck speed... ALL MOST OF US NEED IS A GODDAMN SPRING OR EE
CONTAINER + THE JVM, hah.

~~~
stuff4ben
I know the feeling, but that's how IBM makes their money. We have some great
negotiators in our company and as a developer, I was given the Vegas trip. I'm
an influential developer, but still just a lowly developer none the less. It
didn't work for them though.

------
walterbell
Anyone have stories about the logistics of the previous 60K layoffs? How does
a company and the survivors deal with that many departures at once - were they
distributed evenly across divisions or were entire divisions eliminated?

~~~
gatsby
The cuts were made by Louis V. Gerstner, Jr., a fascinating executive who made
AmEx and IBM major players in the 80s-00s.

Most of the layoffs happened in the summer of 1993, but in all, Gerstner
reduced IBMs workforce by about 100k in a couple years.

The 1993 job cuts saved IBM about $4b/yr and IBM's market cap rose from $29b
in 1993 to $168b in 2002 when Gerstner retired.

If you're interested in more, I recommend the book, 'Who Says Elephants Can't
Dance' \- a memoir by Gerstner.

~~~
rbanffy
> IBM's market cap rose from $29b in 1993 to $168b in 2002 when Gerstner
> retired.

When you optimize for market cap you may end losing sight of long-term
relevance.

~~~
WalterBright
Doesn't that assume the investors are by and large fools?

~~~
bwanab
Not necessarily - it assumes they're more interested in short term profits
than long term growth.

~~~
twoodfin
How is growth like that over 9 years "short term"?

~~~
ams6110
When it's followed by a decade of decline?

------
mbloom1915
The past 5 to 10 years at IBM have shown their aggressive strategy to buy
software companies but fail to integrate them into their many different IBM
suites properly. Institutional knowledge and strong business relations
previously held with purchased companies dies out quickly and ultimately
results in low profit.

~~~
acveilleux
Every IT behemoth that grows by acquisition is an idea graveyard. Just look at
CA.

~~~
greglindahl
Or Cisco. Wait, Cisco is incredibly successful thanks to acquisitions.

------
prodigal_erik
Jeez. That's more than a Google (55,030 in 2014Q3 earnings) plus six Facebooks
(8,348 in 2014Q3 earnings). And I have no idea what they may have been doing.

~~~
sumnandp
Soaking up paycheques and pretending to be busy.

------
bhouston
What is the ratio of cuts in India vs North America/Europe? IBM for a while
has been laying off non-Indians in favor of hiring Indians. Has this
contributed to the nosedive?

~~~
adventured
IBM's nosedive has nothing to do with Indians.

IBM has three problems that are coming home to roost.

1) They abandoned a large portion of their technology business, and became a
consulting & services business. There is very little special about them now,
they are almost a commodity business with a famous name.

2) They invested a very large sum of their earnings, not into innovation, R&D,
science - but into financial deception and gimmickry. Basically they've
attempted to deceive investors by projecting earnings per share growth through
share buybacks, while the underlying business was rotting.

3) The consulting & services business they've chosen to focus on, rises and
falls with the global economy. The global economy hasn't been great the last
six years, and most of the governments of the world are struggling when it
comes to spending and budgets. With global economic weakness, even big
corporations have been restrained on spending for IT the last six years, there
have only been a few bright spots.

~~~
agumonkey
Let's hope they still have a strong enough core of smart people to bounce
back. IBM is old and have seen this industry nascent and changing many times,
they're still massive, thus having the resources to adapt (IMHO). Microsoft
managed to bounce too. Kodak didn't.

I'm still very curious about the partitioning of these claimed layoffs.

ps: 4 times 'still' in one comment.

------
sputknick
"...pie-in-the-sky ideas like commercializing Watson..."

I'm not knowledgeable about the product, but it seems to me commercializing
Watson is the smartest thing you could do. I feel like Watson could allow IBM
to become dominant in almost every field and produce trillions in value for
their customers. Am I off base? Has Watson development stalled over the past
few years?

~~~
xienze
So, I used to work on Watson. The way I see it, it's not that development has
stalled but that it's nowhere near as impressive as you've been lead to
believe. The natural language processing is its biggest weakness. I worked
with Watson in a medical context and the NLP was absolutely atrocious. But to
be fair, parsing English which is usually informally structured is really
difficult! Compound that with the fact that IBM was asking developers with
limited domain knowledge to write the parsing rules and well... it's about
what you expect.

I should also point out that IBM talks up Watson's abilities way too much --
to the point that customers have thought that Watson could essentially tell
the future.

~~~
PhantomGremlin
> The natural language processing is its biggest weakness.

There were several documentaries about Watson after it won Jeopardy, and this
weakness was quite evident to those paying attention.

Watson never really _understood_ Alex's Jeopardy "answers" at all. This was
quite obvious in "final Jeopardy". Watson's response clearly showed its
limitations.

Here's how it went down:[1]

    
    
       The category was US Cities, and the answer
       was: “Its largest airport was named for a
       World War II hero; its second largest,
       for a World War II battle.”
    
       The two human contestants wrote
       “What is Chicago?” for its O’Hare and Midway,
       but Watson’s response was a lame
       “What is Toronto???”
    

Basically Watson's Jeopardy responses were a very refined equivalent of the
Google "I'm feeling lucky" button.

I have to believe that the situation gets a lot lot trickier in a "medical
context".

Still, couldn't it be possible to harness Watson as a super-smart assistant to
humans? But there's probably not enough money to be made in that.

[1] [http://asmarterplanet.com/blog/2011/02/watson-on-jeopardy-
da...](http://asmarterplanet.com/blog/2011/02/watson-on-jeopardy-day-two-the-
confusion-over-an-airport-clue.html)

~~~
TimPC
In all fairness the Toronto answer isn't as ridiculous as it seems at first
blush. If you confuse Lester B. Pearson with Alastair Pearson (something quite
possible by NLP when you have to match "Pearson international airport" then
you at least match you end up with a British World War II hero. Not being a
U.S. city would involve either underfitting or ignoring category information,
and trying to stretch buttonville or billy bishop into a WWII battle takes
work, but it seems like precisely the kind of error that would be caused by
actual NLP rather than optimizing page rank variants.

I also think IBM has the right model by creating Watson as a service on 30%
revenue share -> Let external developers find all the various products and
business models. They'll be better at finding and optimizing new products than
a services companies would be and some of them will be able to go after much
smaller products. You end up with more diversification and less of IBM's
capital at risk for 30% of what's likely to be a much larger pie than IBM can
generate on their own.

~~~
PhantomGremlin
It would be _very_ interesting to find out how Watson actually interpreted
both the category and the "answer".

I don't know the actual amounts of time contestants are given, but on TV the
final category is disclosed many minutes ahead of the "answer". Then a
contestant has perhaps 30 seconds to formulate a "question". An eternity for a
massively parallel computer like Watson. Quite different from the rest of the
show, which relies on lightning reflexes when played by "champions".

Viewed from 30,000 feet (quite appropriate for an airport question, eh) I
think that Watson didn't understand the category. Watson did not know what the
words "US cities" meant. Those aren't words that would normally have any sort
of double meaning, so if Watson understood the category, why would it have
"ignored" category information? That doesn't make sense, especially for final
Jeopardy.

As Dr. Venkman might say: "good guess, but wrong!" In Watson's defense, it did
not have very high confidence in its answer.

We'll probably never know the real story. That's not the kind of information
that IBM would want to disclose, mainly because it would probably make Watson
look bad.

------
curiouscat321
Regardless of their corporate mismanagement and lack of a sound business plan,
this is incredibly unfortunate. 111,800 people are going to be losing their
jobs and many of them may have difficulty finding new ones. To everyone at
IBM, good luck and I hope this all works out well for you!

------
bkeroack
In many ways I'm a hardware guy. I enjoy building infrastructure in
datacenters from bare metal. Yet I can't think of a single use I would have
for these IBM mainframes, nor even what they run (DB2?).

IBM's product line just seems completely irrelevant to modern tech companies.

~~~
cones688
I think you are underestimating the scale of what a Z system can run... You
might not have a use but every fortune 500 and banking institution in the
world does - and they need it to work, 5 9's isn't good enough.

> IBM Hursley laboratory director Rob Lamb says: “There are 6,900 tweets,
> 30,000 Facebook likes and 60,000 Google searches per second." The mainframe
> CICS runs 1.1m transactions per second, which equates to 10bn per day [0]

[0] [http://www.computerweekly.com/feature/Can-the-mainframe-
rema...](http://www.computerweekly.com/feature/Can-the-mainframe-remain-
relevant-the-cloud-and-mobile-era)

~~~
hueving
That equivalence is bogus. If a search was as simple as a single CICS
transaction, Google would just run that and be done.

Mainframes are overpriced and inefficient, but they are the only option for a
F500 without the in-house talent to build any kind of distributed, fault
tolerant system.

~~~
jussij
If as you say _mainframes are overpriced and inefficient_ , that means there
is a great opportunity for some organization to move with a much cheaper, more
efficient option.

But people have been predicting the death of _big iron_ for several decades
now, yet they live on.

I don't doubt mainframes might be overpriced, but I also suspect the reason
they persist is they have yet to come up with a cheaper option, offering the
same performance figures.

~~~
graycat
Long one of the main reasons for IBM mainframes was the _bet your business_
software that wouldn't run anywhere else and that would be too expensive to
rewrite to run somewhere else.

Also, there is a remark that in major parts of the financial industry, running
an IBM mainframe is nearly a necessary condition for compliance.

~~~
jussij
> would be too expensive to rewrite to run somewhere else.

I'm don't doubt that is a major factor. Add to that the major risk that what
every new system you move to might actually fail to work or end up costing
more.

------
rondon2
I left IBM in 2012 because I saw that the division I was working for was never
going to be competitive. It is surprising that it took almost 3 years for what
was obvious at the bottom to reach the top and be implemented.

------
Aqwis
Could IBM turn itself into a generic tech consultancy? Accenture & co. seem to
be doing fine.

~~~
cbd1984
> Could IBM turn itself into a generic tech consultancy?

Not that anyone necessarily cares, per se, but if they do this, what happens
to the companies invested in platforms like System z that only IBM can really
support? Does "generic tech consultancy" include developing and supporting
proprietary hardware and software?

~~~
kyllo
Enter the multitude of companies whose entire business model is selling
products that emulate IBM platforms on top of commodity UNIX hardware and
RDBMS.

~~~
cbd1984
> Enter the multitude of companies whose entire business model is selling
> products that emulate IBM platforms on top of commodity UNIX hardware and
> RDBMS.

As I understand it, the big selling point of Big Iron has always been the idea
that it's more stable at the hardware level than other kinds of computer. Is
that actually true? If it is, can a company get similar uptime with non-Big
Iron hardware? Because it seems like that would be a hard prerequisite for
replacing those systems.

~~~
kyllo
If that were still true I don't think virtualization would have caught on to
the extent that it has. I work in a pretty conservative business that used to
run everything on IBM and then HP mainframes but has since migrated to
commodity x86 hardware running VMWare. Downtimes do happen but modern
monitoring and deployment processes can address them quickly and cheaply.

------
carsongross
Yet another manifestation of the tech worker shortage we keep hearing about...

~~~
sumnandp
There IS a tech worker shortage ... of those willing to work for third world
salaries.

------
hmate9
Guess I won't apply for an internship there for the summer....

~~~
irremediable
FWIW, if you're looking all over the place for an internship, maybe don't rule
them out[1]. Often companies lay off employees who aren't useful to them, but
are still looking for employees who will be useful. In particular, someone
who's good at programming[2] and junior[3] might be the kind of person they
still want to hire.

[1] Then again, the fact you're commenting on HN probably means you're a
strong candidate who'll find an internship with ease. So follow your dreams.
;)

[2] Again, just assuming this based on the fact you're an HN reader. You might
be horrified to see what proportion of people in a BigCorp company can't do
even basic reasoning.

[3] Pay an intern pennies to do pounds worth of work! Yay!

~~~
wernercd
"[3] Pay an intern pennies to do pounds worth of work! Yay!"

And that's why they are (or could be) losing customers... charging a premium
for intern work.

I know what my skill was worth straight out of school... vs after putting
years of practice in...

~~~
irremediable
I don't know to what extent this is a problem at IBM, but I've seen a few
places where it is a huge problem. And I agree with you. The "yay!" was
sarcastic.

------
anonibmer111
For some insight/rumors/thoughts from IBMers you can check out this board:

[http://www.endicottalliance.org/jobcutsreports.php](http://www.endicottalliance.org/jobcutsreports.php)

At the moment it seems to be down, probably from being overrun with traffic
now that this story is trending a bit.

------
fest_und_treue
What does the CEO's comp package look like this year?

~~~
gatsby
In 2013 it was $14m.

Source: [http://www.forbes.com/profile/virginia-
rometty-1/](http://www.forbes.com/profile/virginia-rometty-1/)

------
FrankenPC
ASSUMING this is true...

The information industry in in an exponential power curve right now.
Participants are either in the stage of disruption or already evolving
democratization. The classic monolithic mega-company just isn't engineered to
twist and turn like that. I'm amazed they've lasted this long.

One way to survive is to admit failure and do an emergency fracture. Break off
all divisions with any profit potential into their own manageable chunks which
don't suffer from upper management overload. Wow that would be an expensive
proposition. And IBM stock would burn.

~~~
adventured
IBM made their bed in switching from being a technology company to a
consulting & services company. At best they will grow and shrink with the
global economy now.

When the global economy hits a wall, as a consulting & services company you
can't innovate your way out of it, you depend on eg growth in government
spending and big corp spending, both of which are shaky around the world right
now.

------
yuhong
"It's becoming apparent she is not up for the job and can't pull the company
out of its nose dive."

I wonder who would be the right person.

~~~
hueving
Marissa Mayer seems to be the goto for a struggling giant.

~~~
yuhong
Only a specific kind.

------
keeperofdakeys
It could be related to Lenovo buying IBM's x86 server business
[http://news.lenovo.com/article_display.cfm?article_id=1755](http://news.lenovo.com/article_display.cfm?article_id=1755)

~~~
IBM
Does that business employ that many people?

~~~
keeperofdakeys
I'm not sure, the two pieces of news are just quite close together.

------
dreamfactory2
I think this is where IBM is trying to go -
[http://www-03.ibm.com/press/us/en/pressrelease/43523.wss](http://www-03.ibm.com/press/us/en/pressrelease/43523.wss)

~~~
ninkendo
Mostly unrelated: I've always wondered how anyone in the tech industry would
go to IBM as a business consultant, when they can't even figure out how to
have a website that doesn't require things like "www-03.ibm.com" to be the
hostname.

And it's not even like they're just maintaining legacy URI's for search engine
purposes, either: Go to ibm.com and click on "Services" > "Cloud Services".
For me I got sent to [http://www-935.ibm.com](http://www-935.ibm.com). Do they
know how load balancers work? Do they just not want a global namespace in the
HTTP paths, and everything has to be namespaced by the hundreds of different
servers it runs on?

------
brown9-2
_Cutting storage is also foolish, as we are in the era of Big Data and Data
Lakes and storage is vital to these concepts._

Whether or not the layoff rumor is true, this doesn't feel like the most
insightful of articles.

------
j2kun
I'm really interested to see if they follow suit with Microsoft and close one
of their top research labs.

------
adwf
A legacy of bad management. Whilst IBM might have a reputation of top research
in the past, they've been cutting R&D in a very short sighted manner for many
years now. That their revenue is declining and they need to cut staffing
(again) is just them reaping what they sowed.

~~~
jeffreyrogers
They've still done good research lately. This is just the nature of business I
think. Eventually others catch up to where you are, and it is difficult to
constantly remain competitive. A further problem in IBM's case, which maybe
isn't as pronounced in other industries, is how quickly the computing
landscape is changing.

~~~
adwf
Yeah I wasn't trying to insinuate that they don't still have a great research
department. But you can only see so many cuts happening over the years without
thinking that it'll impact their bottom line eventually.

Whilst I'm sure these ~100,000 are from services and sales - I'm equally sure
that if they had something unique to sell in the first place, they'd be doing
a heck of a lot better.

------
known
Impose Tax On Corporate Revenues, Not Profits And See The Result;

------
zak_mc_kracken
Now is a good time to send a resume to IBM...

------
sumnandp
Unica.

~~~
anonibmer111
What about Unica?

------
JohnHammersley
"Nobody ever got fired for choosing IBM"[1] ...except as an employer!

I'll get my coat...

[1] [http://www.quora.com/What-does-the-phrase-Nobody-ever-got-
fi...](http://www.quora.com/What-does-the-phrase-Nobody-ever-got-fired-for-
choosing-IBM-mean)

------
anonbanker
This would certainly explain all the publicity over Watson. Perhaps IBM is
looking for someone to buy them, and are trying to put as much makeup as
needed to seem valuable?

Anyone who read IBM & The Holocaust[1] is probably celebrating right now.

1\.
[https://en.m.wikipedia.org/wiki/IBM_and_the_Holocaust](https://en.m.wikipedia.org/wiki/IBM_and_the_Holocaust)

