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IBM has transitioned into an enterprise services/consulting firm over the past 15 years or so. Their game plan is to get huge $$ contracts from Fortune 50 companies and government agencies, which is a long and costly process.

This kind of business is extremely hard to scale, compared to a true software or hardware company innovating and licensing/selling products. IBM does have a ton of resources behind Watson, but that's still basically an enterprise services contract sale, and not much of a cloud product.




I've been consulting in the federal gov for over 15 years and whenever I've heard about IBM contracts it's been bad. real bad. they've botched some reeeallly high priced federal contracts. sure they've made money, but their reputation in this space is down the tubes.

from my own dealings with their teams, they over complicate and over-process everything. They have lost many high $$ contracts in the past several years in the fed gov.


A "ton of resources" is relative. Compared to true technology players going after dominance in AI in general, or even in specialized areas like self-driving cars, IBM is not putting a lot of wood behind that arrow. I get the impression that IBM would like to find Watson only far enough to use it to sell services and integration at a higher price.


IBM had the contract to run most of the IT infrastructure for the State of Texas and subsequently lost it. I don't have any facts as to why, but rumor was it was an execution problem.


Does it mean its core revenues are more stable? Are enterprise customers moving away from it?


A lot of enterprise software work that I know about that IBM does are things like SAP integration (which was a great disaster in my home land - queensland, australia, have a google). You can see a lot of this sort of stuff moving to the cloud and off the shelf products replacing it, there is certainly consulting work to be had integrating products from this, but it would be easy to argue the amount of money for these things is a lot less.

Also in the past IBM had an integrated value stack of hardware and software they provided (AS/400 and so on), these are being replaced by commodity cloud based servers running linux or windows. So their consulting model is being disrupted. There's still money in it, but probably not the amount of money they're used to, same sort of thing is happening in Oracle I'd guess.




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