IBM is splitting itself into two public companies
reuters.com
reuters.com
Is it just me or does anyone else feel over the decades they've been divesting some of the best (long term) building blocks? A company with vertically integrated silicon, compute, networking, cloud, AI, Enterprise etc. seems like it could have such an edge if only they had focused those engineering capabilities on consolidated, high-margin end products.
I see the other big players going the opposite direction. e.g. Google and Amazon are building their own silicon for an edge in Cloud and AI.
So-called SexyIBM is just another cloud company without a distinguishing barrier to entry. Sure, their growth will look good on paper for a few years, but when Cloud becomes commoditized (which I think is already happening), the capabilities which could have created the kind of real innovation that opens up whole new industries will have all been cleaved away.
It is a financial engineering project. When you see it through that lens all of this makes much more sense.
They buy a business, it's black. They don't understand how the block works, but they need to to be more profitable, so they paint the IBM logo on everything, cut costs and headcount until it is green for a short while. Then it turns black, they rinse and repeat. They make it green a few more times and then finally instead of green, it turns red!
Then they combine some red blocks, bundle them together, make it look black or green and sell them off.
This looks like the biggest bundle jettison ever, but after acquiring Red Hat, that makes sense.
I hope Apple doesn't eventually succumb. Tim Cook's successor matters.
History is full of examples. Just look at the top 10 American companies by market cap, decade by decade.
1. American Telephone & Telegraph is now called AT&T and was in the top 10 within the last decade. 2. General Motors has dropped off the top 100 for a while, but was the world's largest automaker within the last decade. 3. E.I. du Pont Nemours dropped off the top 100 in the last few years, but was the world's largest chemical company within the last decade before selling off Dow. 4. Standard Oil Co of NJ is essentially ExxonMobil and has been the #1 largest company within the last decade. 5. General Electric has been in the top 10 within the last decade. 6. IBM has been in the top 10 within the last decade. 7. Texas Company is now called Texaco and is part of Chevron, which has been in the top 10 within the last decade. 8. Union Carbide had one of the world's largest industrial disasters, and its later history is involved with duPont above as part of Dow. 9. Eastman Kodak ceased being relevant in the last 20 years. 10. Sears Roebuck & Company has collapsed, last being the largest retailer in the 1980s.
tl;dr: Of the top 10 in 1960, half have been in the top 10 within the last decade (including the former #1) and one has been #1 within the last decade.
Then again around here the rail lines are mostly owned by grain/grass farmer groups who ship product by rail and can load from their farm directly. Passenger lines that share the rails wait for those trains.
Just because it didn't retain the name "GE" doesn't mean the business is gone.
GE is an interesting example because, as a conglomerate, I would think it's better poised to strategically change the focus of it's business...maybe that's the point of the IBM spin-off.
I guess they will succumb faster than the old Xerox-age market leaders, because they are not focussed on consulting (= making other companies believe their constantly syphoning money from them brings value).
How is literally designing your chips to a point where they could be desktop class to replace x86 not innovation? What other company is doing this?
I can't imagine a "finance company on the out" deciding that they will bring all chip development in house.
Furthermore, IBM has been in this state since the 90s, right? How are they still lumbering around? Why do companies fall for their sales pitch?
Companies taken over and run by value extractors (finance/business/marketing) over the value creators (engineers/product/creatives) end up in this stagnated, picked apart state when the grace from the value creation or product wears off.
Value extractors need to learn that you must first create value before you extract it. The reason value extractors originally were attracted to the project/product is usually that it has created value.
R&D has very little value to an MBA so it is cut, but long term it is all the value of the company. Value extractors kill the whales before they even can grow up.
IBM is one of many, and their decline wouldn't really matter all that much in the grand scheme of things.
I would argue that this was never true--even from inception. HP was an engineering-first company--not IBM.
IBM was about sales and marketing--they would rent and finance equipment for you even way back.
Now, IBM had world-class engineering, but people forget that a lot of the major companies had great engineering until the 1980s.
It was always sales oriented and engineering was something they had to do to deliver some of the things they sold. This may be the first CEO that was actually an engineer.
Having worked for IBM and being a client of IBM in the past with large gov't agencies , i can also tell you that part of their success is liability perspective from the client. I know many of gov't big wigs who simply hired IBM not because of their talent but because if TSHTF they covered their arses with congressional hearing or lawsuits by saying what more could we do than hiring the vendor that made the product.
And that turning point is happening/happened.
IBM is old enough to understand the pitfalls of that approach.
In year zero it sounds great. Integration! Efficiency! And that works for a bit.
Then internal politics causes you to pass on opportunities that competitors take because taking them yourself would cannibalize sales in one of your other lines of business.
Then somebody else comes up with a better microprocessor than you, or better software, or lower cost manufacturing, and it's going to take your internal team five years to catch up. In the meantime all your systems are integrated with your in-house solution, so you can't switch, but the deficient in-house alternative makes you less competitive, so you lose all the customers who can switch easily.
Then you have to cut R&D because of the lost revenue and fall even further behind the competition, which leaves you in a death spiral where the most profitable strategy is to lock-in your existing customers and milk them as hard as possible as you circle the drain.
Or you can concentrate on doing one thing and doing it well, so that you don't risk sinking your entire operation as soon as you fail to execute flawlessly in any one of the six different major fields you've created an internal dependency on.
And in the areas where they do compete, they pour in top dollar to make actually competitive products.
And the opposite failure mode is just as bad -- you actually succeed in monopolizing the market and then get smashed by antitrust.
No one has the budget to compete
Apple TV+, Apple Music, Apple Arcade, Apple News+. Every single one of them were done to mask the profits of their Services Revenue. ( You could argue they provide decent value if you think they are competitive. )
I think that is where it all start to feel like Apple wasn't actually going in because they want to do better. They are doing it for numbers and finance.
And it irritates the heck out of me those money aren't being put or spend on better product and services ( on the actual product ).
They still make chips in the POWER architecture and the Z architecture for mainframes.
https://en.wikipedia.org/wiki/POWER9
IBM had the technical chops to create the likes of ARM, nVidia, or any number of big tech companies. They just never seemed to have the leadership capabilities to get out of their comfort zone. I understand the idea of keeping a business focused, but Alphabet and MS don't seem to struggle with managing a diverse portfolio of companies.
I suppose a z15 LinuxONE cloud offering would be attractive for them to offer because of all the built in observability, and also because those cores can be ridiculously oversubscribed before anyone notices.
As for pricing, they wouldn't need to pay their margins unless they eat into their other segments.
Full vertical integration isn't necessarily good business. Even Apple doesn't do its own manufacturing.
Motorola followed that path. They sold off their computer business in the early 1990's. Analog electronics (On Semi), and then the semiconductor business (Freescale, now NXP). Finally, they split the government biz (Motorola Solutions) from the phones, and that was first sold to Google, and what remained then went to Lenovo.
Motorola was a gigantic powerhouse, and through mismanagement, is a shadow of what it was. Such a shame.
And the value of Dell's business isn't in selling PCs, it's in other services around the PC.
Since ~2005 they have ~5x'ed their revenue. Which is pretty significant if you consider one of IBM's big problems has been declining revenue. Proving the problem with the business wasn't the business itself but IBM management.
IBM still designs chips - what they divested was their semiconductor manufacturing (fab) business.
Apple, Google, Amazon are all proving the value of vertically integrated product lines, while IBM chooses short-termism.
I thought the DoJ investigation stopped Microsoft from doing such things. What am I missing?
https://www.justice.gov/atr/case-document/file/503541/downlo... has the judgement. Read the following phrase and consider the size of the truck you can drive through it.
Nothing in this judgement shall prevent Microsoft from providing Consideration to any OEM with respect to any Microsoft product or service where that Consideration is commensurate with the absolute level or amount of that OEM's development, distribution, promotion, or licensing of that Microsoft product or service.
When IBM was competing with companies that got such "Consideration" and it couldn't, guess how that worked out?
On the other hand if any component is non-competitive, the other components in the stack are still obligated to give that unperformant component their business. Which reduces the pressure to perform and causes the overall company to gradually become less competitive.
I think a good example of this would be Intel designing chips and also owning the fabrication plants. It's no secret that Intel has been to fabricate their chips for a while now.
- Rometty (Chair): Technical degrees, held technical positions for first 10yrs at IBM, then in sales for the 90s, two decades working primarily with finance customers and she worked the PWC acquisition.
- Krishna (CEO): EE, Idea guy.
- Whitehurst (Pres): MBA
- Boville (SVP Cloud): Business degrees (UK)
- Browdy (SVP Legal): IP attorney
- Foster (SVP Services): Art degree, Accenture guy
- Gherson (SVP): Management degrees
- Gil (Dir IBM Research): EE/CS
- Kavanaugh (CFO): MBA
- Got bored
One trait is pretty dominant: decades at IBM
"... Costco does not hire business school graduates—thanks to another idiosyncrasy meant to preserve its distinct company culture. It cultivates employees who work the floor in its warehouses and sponsors them through graduate school." https://www.bloomberg.com/news/articles/2013-06-06/costco-ce...
And you lose power of market and economy of scale. Vendors can focus on developing their tech to be better, for everyone, as they get bigger R&D budgets, and you can just focus on improving things that are your true market advantage, not fighting in commodities market.
Note, that doesn’t mean that IBM is doing right thing. But vertical integration is extremely overhyped.
That z/OS has tens of millions of lines of code surprised me the other day. It's not like it needs to support 23 brands of mouse and dozens of GPU architectures.
They're divesting lower performing (but not money losing) ventures in order to not hide the performance of their higher performing pieces. This is so they can show the unsustainable growth that stock holders (still) demand from corporations.
They'll look great on paper for a while as you say, at least until their cloud business fails for some reason. When you average growth over a whole company, you do mask high performing parts with low performing ones... the same is true of cash flow and revenue.
If you get rid of parts of your company that are solid performers but aren't doing as well now, then you're getting rid of some of your safety net in the hope you won't need it.
IBM's most impactful business (in terms of wide use) is probably their research labs. Many, many chips today use SOI and copper interconnect technologies. That sort of research doesn't apply much to the cloud, but maybe they're hoping their AI stuff will.
No bets needed for what band of clowns will lead the hip, "value proposition" part of the company of course.
Plus this practice paints a huge target on your back for anti-trust action, as you are seeing now with the other monopolies. The bigger your monopoly gets, the more potential profit there is for whatever government agent can bust you up. This could result in promotion, christmas bonus, maybe even a corner office with a window. Very high stakes.
Staying at home, the best thing I found to play with is built "digital lego" MOCs using LeoCAD app + LDraw Parts Library.[0]
Seems like IBM CEOs, stayed at home for a long term, just found own "lego-like" game to joy ;)
Yes but I guess it was the IBM board whom decided that they could better invest in the money with various initiatives. IMHO, they are now (and for ~15 yrs) only choosing a safe route, not an innovative route.
But the dead weight is a company too. Does everyone who ends up working there just sort of accept that now they work at a company with worse financials and prospects?
Edit: All the replies are fantastic. Thank you.
Companies split when two halves just have such vastly different objectives and futures that, at an organizational practical sense, it no longer makes sense for the same board/CEO/management to be running them together.
Splitting them up lets both halves select boards/CEOs/management that is best for them, and pursue strategies that are best separately. The "underperforming" segment may now perform better now that it's free to use AWS/Azure/Google cloud tools instead of just IBM's... it can enter into strategic alliances it couldn't before... it can merge with another company that wouldn't have made sense before.
As for the people who work there... they're still employed so nothing really changes day-to-day.
But the main point is that this frees the "worse part", if you still want to call it that, to do what is best for it. It may very well turn out to thrive and be a huge success. It's still a normal business like any other.
If it were truly dead weight it wouldn't be spun off -- it would be shut down and everyone would be laid off. The fact it's being spun off or split means it's expected to be a viable business on its own. Nobody can predict the future -- who knows, it might outperform the cloud part long-term.
The contrary point of view is that this means that either:
1. crapIBM will need to pay betterIBM for access to continue using the ERP, QRadar, Remedy, licenses, etc tools they use today. This is better for betterIBM and worse for crapIBM
2. crapIBM will need to stop using betterIBM's tools, and have to quickly negotiate new licenses/tools and spend 6+ months of their first fiscal year just moving platforms (moving SAP has often been a 2 year failed IT challenge, good luck). This will make crapIBM continue to look worse, making betterIBM's leadership look good for divesting themselves of it.
It's in nobody's interest for "betterIBM" to succeed at the greater expense of "crapIBM". With so much shared ownership (at least in the medium-term, practically speaking), shareholders want both to succeed.
That's the whole point -- shareholders think both halves will do better as separate entities, and it's in nobody's interest for one half to exploit the other.
Surely your "crapIBM" will continue to have access to "betterIBM"'s tools at a reasonable price, but they'll also be free to migrate to better ones, as they choose, at the pace that is most profitable for them.
It's win-win because that's the entire point of the split in the first place. The two resulting entities aren't even competing with each other, they're in totally different markets.
The book How to be a Stock Market Genius covers situations like this and gives some tools to analyze them if you are interested in learning more about it.
The "Cloud/AI" group wants to sell the new buzzword products.
The "Infrastructure Group" wants to sell the low innovation commoditized services and products.
The sales people from both groups would be telling opposite stories on why you should go with them for your IT needs. So it is easier to split them up and let them compete in the market rather than compete internally . And it probably makes both markets bigger in the long run because they can focus and expand.
I'm not saying that these all are necessarily true here. Time will tell. And about the people, if the culture was bad before it would stay the same regardless. If it takes a turn for worse, then I guess it was inevitable either way.
After all, complaining about the state of the world decaying goes back to at least the ancient Greeks.
There are distinct, often contradictory interests. Each half figures it's the other one dragging them down, which might be true completely, partially, or not at all. And it's clear who has their head in the clouds in this case ;)
> But the dead weight is a company too. Does everyone who ends up working there just sort of accept that now they work at a company with worse financials and prospects?
I was on the HPE side - pretty much! This typically doesn't come as a surprise, though. The free swag with the new company logo makes it a little better, though.
But many people at the time thought Agilent was more in line with traditional HP values than HP was, and over the long run, they appear to have performed better than HP.
IBM has done this before. They sold personal computer business to Leonovo in 2005.
If you're in the under-performing division, you already know. You've already accepted that you work there. You feel it in your bones.
As someone who used to do a bit of recreational "special situations" investing, I can say with some confidence that counterintuitively the worse part is often the better part, and the "dead weight" often soars after it is jettisoned vs the "good part" flatlining. Not always but it can definitely happen.
The reason for this is logically apparent when you think about the second-order effect of people's opinions on a stock valuation. Say IBM has two halves: "Cloud IBM" which is funky and "Boring IBM" which is everything else. As one company the valuation is the weighted average of everything everyone thinks about the funky part and the boring part put together and is therefore fairly boring overall.
So when you do a spinoff the funky cloud part should soar, right? Wrong. Or not always, anyway.
What often happens when you split a business into a good part and a "bad" part is that all the overinflated expectations of investors are concentrated in the funky part so at the time of the split it has a very high valuation and the boring part is massively oversold and undervalued. So after the split the boring part performs well even if it just phones it in because expectations are so low whereas the funky part needs to do amazingly just to meet the expectations of people who are already in the stock at a valuation that is too high.
Often, the “good” part is actually the high-risk, high-growth potential part and the “bad” part is the low-risk, solid returns part.
Fair to add that this doesn't refute the structural logic of seperating the parts - if your business has two halves that are that different, a split can make total sense.
The people working in the "lesser" part take a very close look at who the new management is, and what their market chances are. The most likely outcome here is "meh".
At that point, most career-hungry people who have contacts in the other side of the company start extending feelers, because it's better to be in a growth area than in a steady ship if you want to have quick career growth. The few who've also got contacts outside the industry weigh the rest of the industry for their prospects.
Meanwhile, middle management isn't stupid and knows this is happening. Large turf wars break out, everybody trying to secure the most interesting projects for their teams so they can attract the best remaining people. The resulting office politics drive most of the remaining people who have options outside to leave as well, because it's a cesspit.
At this point you have created a solidly mediocre company. It'll likely plod on for a long time, on a slow downward slope. Every calculates what comes first, implosion or retirement, and chooses accordingly.
Life is, for lack of a better word, solidly grey.
But sure, on paper it's a great opportunity for both sides.
I'm sorry you're caught in this :(
Chemours was loaded with "assets" like dangerous chemicals, and their accompanying lawsuits. (One phrase used in a later lawsuit was: "unlimited exposure for historical DuPont liabilities")
Chemours' market cap was initially valued at $3b and quickly crashed to $0.75b. But then Trump was elected, it started looking like the liability from dangerous chemicals would be less than previously believed, and eventually this company, which was designed to fail because of open-ended liabilities, was valued as high as $10b.
https://www.macrotrends.net/stocks/charts/CC/chemours/market...
Yes, this is a thing https://en.wikipedia.org/wiki/Bad_bank
No reason any company can’t do it, not just banks
For example, SQL was invented at IBM, but it's been published in ANSI and ISO standards. Surely the formal standardization process precludes an Oracle-style attack on implementors...?
Surely is a strong word. Who knows where this train is going to end up once it derails? They surely offered up permissive patent licensing, and all of those patents have expired by now anyway, but would they have bothered to sign away copyrights that they didn't think they had? Copyright lasts 70 years from the death of the author, so while the patents are all ancient history, the copyright, if such a thing exists, would certainly still be active and there would be decades of infringement to pursue.
Microsoft and IBM have cross-licensing agreements allowing use of OS/2 code in Windows and vice versa. Microsoft used this to include OS/2 compatibility components in old versions of Windows NT (newer versions have removed it); likewise, IBM used it to include a copy of Windows 3.x in OS/2 to enable running Windows 3.x applications. (The agreement did not include newer software they developed after their breakup, so IBM wasn't allowed to use the Windows 95 or Windows NT code in OS/2, nor was Microsoft allowed to use OS/2 2.x and higher code in Windows.)
So, the odds of IBM trying to sue Microsoft over OS/2 APIs in Windows is zero. It would be precluded by the licensing agreement between them.
https://www.platformonomics.com/tag/ibm/
As for his take on this latest piece of news: https://twitter.com/charlesfitz/status/1314310748835704833?s...
> IBM splitting itself up into two companies is kind of like when Netflix proposed to split itself up into its future-oriented streaming business and its dying legacy DVD business. Except to make the analogy work for IBM, imagine Netflix had no streaming business...
Not entirely sure I believed him :-)
>IBM, which currently has more than 352,000 workers, said it expects to record nearly $5 billion in expenses related to the separation and operational changes.
What does the rest of their business consist of that requires 250,000 employees? Or are layoffs in the mix here?
There is certainly also consulting and other groups of people too, but they were not the majority.
A lot of this 'cloud technology' we're using, including some that is still being developed, is functionality being ported from mainframe tooling.
I saw a teardown of an IBM cpu module from the early 90's the other day. There were tricks I still haven't seen show up in rackmount hardware.
There's a tradeoff between flexibility and stability - the mainframe is just hardcore stable. Sucks to work on a lot of the time, but _damn_ if there isn't a reason financial institutions still do mainframe batch processing.
I think it would be hell cool to have a mainframe at home :) Assuming it is not ludicrously expensive to keep it running...
https://www.youtube.com/watch?v=xQ3oJlt4GrI
Nearly a square foot, and the water block is built into the module.
The only one I can think of is Phillip Morris International, Kraft, and Altria that all split out of Phillip Morris. But I think that was because of all the tobacco litigation.
I’ve seen this happen quite a bit and it always seems to be a sign of a declining company. IBM splitting off Lenovo and disk units. HP splitting off enterprise/automatic.
These kind of transformations just seem like accounting tricks for restructuring debt away from some parts into others. It’s curious how this split has $5B planned in expenses. That seems really high.
Maybe Google successfully bought and then shot out Motorola and Boston Dynamics. Their Alphabet reorg didn’t seem to actually change companies.
20 years later, Disney paid $7.4 billion for Pixar.
Think of IBM as:
- Hardware
- Software/Cloud
- Services
Within "Services" you have everything from business/management consultants to application development teams to people who support IT infrastructure for clients as part of outsourcing arrangements.
It's that last group, Infrastructure Support, that is being spun off.
I see where they’re going, if they’re trying to learn from what went wrong with SoftLayer. IBM culture destroyed SoftLayer, so if they want another go at cloud, they do need that business to stay VERY fare away from the traditional IBM and their consulting business.
This is not unexpected. Startups will optimize for a few use cases and deliver, get acquired on those strengths only for the acquiring company to realize that ... the tech isn’t easily scalable.
I would love to see them build out a real cloud solution, perhaps even using datacenters full of their z15's. I can't imagine anyone competing with that on commodity hardware in terms of deployment speed and connectivity speed between instances in the same location. It would be crazy expensive though and I doubt they would ever consider it and someone at IBM would have to write a web interface / API into the system that mimics the options of all the current cloud providers.
They are slowly replacing the mainframe contracts by (private) cloud contracts
That's a perfect opportunity to clone something and sell
Throw in there various expensive hand-wavy marketing campaigns about AI, blockchain and quantum computing to add to that “but what do you actually do?” confusion. Case in point if I go to IBM.com I’m presented with a giant fluff PR piece about quantum computing.
This is a great loss.
First they ignore you, then they laugh at you, then they fight you, then you win.
They really meant. Even being swallowed by a behemoth, they managed to cut the beast belly and break free.
>Besides the Red Hat portfolio and Global Business Services, IBM will retain its systems business, software portfolio focused on big data, AI and security, and mission-critical public cloud service.
https://www.crn.com.au/news/ibm-spins-off-global-technology-...
Do these companies operate their own data centers all over the world to make their cloud offerings work?
"Cloud" is kind of a magical handwavy way to say "don't worry about where the computers are, it will just work." With AWS and Azure I don't worry about where the computers are, because they're all over the world (and even under water, if you follow publicity stunts).
But where are the massive IBM/Oracle/etc data centers? Are they out there, and I just don't know about it?
Weirdly, IBM's map seems to have disappeared but here's Oracle: https://www.oracle.com/cloud/architecture-and-regions.html
Not to be confused with Oracle Call Interface (OCI)
They're never a leader, but their staying power is impressive.
I guess their mainframes will continue slowly getting less and less important, but what about their Power CPUs? If they end up in the company with fewer resources, do they have a future?
Think how the advertising business was formerly divided in thousands of small actors in each country (publishers) and now it's dominated by a handful of global internet companies.
All I hear is mediocre to terrible reviews. How are they staying in business? Admittedly I could just be hearing a one-sided story. Maybe there's some redeeming feature vis-a-vis AWS or GCP?
The people who use IBM cloud are the same people who used them for data centers in the past.
I think part of why we use IBM cloud services is we also use their consulting heavily. Everything runs on rhel and is supported by ibm.
Though, I haven't personally needed a compelling feature which AWS or GCP was missing, so I have never had to use any other product for work.
Azure is a 'best effort' attempt at a seriously important strategic vertical by a very smart company with deep pockets.
MS would throw zillions of dollars and blood at Azure to make it work.
MS has very deep enterprise relationships, way more so than Amazon or Google and in the long run, that may be the advantage.
A lot of 'fancy services' that we see are not 'the thing' that corps want: they want to spin up servers, basic networking and security, do things at scale. That's the bread and butter and Azure can surely provide that.
Being on the buying side of some of these things, even 100% aware that 'other offers may be better' it's extremely hard to fend off the professionalism of a well managed sales effort. It's even rational: entities that are so operationally effective at managing the relationship 'surely must have tech that works'. And it's a 'safe choice'.
I always assumed Azure would carve something out, IBM, not so much. Oracle, somewhere in between.
I'd imagine it could be popular at banks that are used to working with them for 30 years
Given that banks were among the earliest commercial customers of computing machinery, it's more like 70 years:
https://www.ibm.com/ibm/history/ibm100/us/en/icons/bankauto/....
Same as Oracle cloud, their users are organisations locked into long-term support contracts, who are offered sweeteners to use their clouds. Which of course only makes them more locked in.
That said, as a person who's coming from AWS, their demo and documentation have thoroughly piqued my interest. There's a decent amount stuff to like. It's got a slick UI, and the APIs appear to be comprehensive enough to cover our use case.
But I do know IBM has some interesting hardware available in the cloud servers. The Power architecture allows, for example, "1st-class citizen" status to GPUs w.r.t. main memory access: They can access main memory using NVlink. NVIDIA has therefore had some on-mainboard, non-card GPUs available mostly (solely?) in IBM power machines.
Obviously this is not enough for an entire cloud business but they're not just an "also-ran" cloud offering.
Softlayer was a very nice place to get bare metal hosting. You get a whole machine to do whatever on, they provide a solid network, and replace components when they fail (and you open a ticket). We didn't use any ancillary services for the most part, we had been using their included DNS, but switched off because update delays were getting too large and we didn't like the support response on that; we used their loadbalancers for one service for a few months, but it had worse uptime than the hosts behind it. I have heard their other ancillerary services were (are?) bad too. From what I saw, support in general was getting worse, but that could have been because of IBM takeover or because we were going from a top ten customer to an average customer.
I would consider them an option in cases where you want to run all the services you consume, but you don't want to run your own datacenters. They had a decent worldwide footprint, and post-IBM they got a lot more datacenters outside the US; that could be a big deal, because sometimes you just need a couple machines in another continent, and it's easier if you already are on board. Also, at least when we were there, private network traffic was free, worldwide, which is nice to manage replication for disasters.
If you're more cloudy though, and make use of integrated services, and small instance types with per minute billing, I wouldn't consider it. Also, they had that global routing issue earlier this year, which would have been hard (impossible?) to mitigate as a single vendor customer.
I have considerably more doubt about them as an AI player. And their efforts to brand themselves as a blockchain player don't even seem to have merited a mention. Have they given up on that already?
Looks like it's best of both word situation for IBM.
This makes sense to me. Apparently, IBM is not good at high-competition/low-margin markets (and has never been), but they have been a huge R&D powerhouse for decades and probably remain so.
Now I think, the previous CEO should've done this split years ago.
My 3 years there made me sort of view it as the "top level of support" that IBM offers via global services. i.e. IBM is supporting some java solution for $$$ at a bank, they also employ some of the top JVM experts (i.e. the researchers) that if there's an issue, they can figure it out and provide a solution.
Edit: I should also point out that they provide stellar support and a great transition from on site hardware to their cloud service. They have always been great to work with - at an appropriately high price.
But the mainframe regular income - that has always been a bit of bread and butter for them and to wave that away, really.
Unfortunately, the web application is down.
Everyone responsible has moved on to Google.
So, in answer, nobody knows and nobody can ever know.
What does technical support mean here? The IT help desk services that they marketed heavily about a decade ago, or all of their on-premises related services?
They isolate the compensation of senior management from the company’s debts and liabilities, which will by pure coincidence be in the “other” company.
It would seem to me that the latter would cover Watson.
That's what they're telling us, anyways. Who knows the real reason.
The other comment threads here are correct: IBM Cloud is struggling for relevance. There are some interesting ideas percolating around, but productionalized operations leaves a lot to be desired compared to AWS. They're in a very distant fourth or fifth place with the likes of Oracle Cloud. I'd possibly place IBM Cloud even behind Alibaba Cloud.
The general idea is that once IBM Cloud sheds the chains of Legacy IBM, IBM Cloud will really take off, since it is finally rid of that pesky, low-margin cruft dragging it down. That "cruft" is why IBM Cloud is even getting warm introductions and walking through the door at all, powered by high-levered sales spiffs to bundle IBM Cloud.
Post-split, IBM Cloud is going to spend massive amounts of time and money trying to get their foot in the door, to get back to status quo ante of easy introductions, swimming upstream against AWS, Azure, and GCP once they separate from IBM-not-IBM. IBM Cloud will also get dragged into brutal discounting wars against Oracle Cloud and everyone else's Me-Too Cloud. IBM-not-IBM will initially proclaim a "close partnership" with IBM Cloud, but once freed from on-high diktats to always use and shoehorn in IBM Cloud, they'll gravitate in a few years to a vendor-agnostic-but-really-only-top-2-or-3 partnerships. If vendor-agnostic cloud even becomes realistic in a revenue-impacting way by then.
I expect IBM Cloud will hold onto RedHat post-split, and will likely try to use RedHat as their warm introduction channel. I hope IBM Cloud surprises all of us with something good.