Even so, Fitz-Gerald has his doubts. “I think [IBM] is late to the party and they are going to be a dollar
short,” he says. “I just simply don’t see them competing with the likes of Amazon or Microsoft, which are
rapidly growing into the cloud space as opposed to playing catch-up. I don’t know that it is savable. I think
this is a zombie company.”
The walking dead.
https://finance.yahoo.com/news/ibm-is-a-zombie-company-analyst-122944734.html
Getting out of the laptop business was not necessarily a good idea. The obsession with high-margin-only business that the beancounters have is short-sighted tunnelvision. Think of the blades-vs-razors metaphor. IBM decided to get out of the low-margin razor-making business without considering that it would affect sales of the high-margin blades business.
There are plenty of buyers who want to only deal with a single vendor for their IT needs. These are called "IBM shops" or "HP shops" or "Dell shops" or more recently "Apple shops" and when IBM got rid of their laptops, they k–led their ability to sell everything else (including high-end high-margin servers) to those IBM-only customers. Those customers went elsewhere (forever) to the competition. Similarly, getting rid of low-end low-margin servers had a cascade effect on high-end server sales and some customers went to the cloud ... where IBM is barely a player and losing market share.
I have never understood IBM's "product X is not profitable ENOUGH so we must k–l it" insanity. IT IS STILL PROFITABLE. Meanwhile there are companies that sell products at cost or even at a loss knowing that it gets customers into their ecosystem and will eventually lead to high-value high-margin product sales. Example: Apple recently update the iPod (yes the iPod) because that is their low-profit-margin entry point inyo their profitable ecosystem. Every child that is gifted an iPod today will become and iPad or iPhone and Mac customer tomorrow.
So IBM will continue to k–l off low-margin products without regard of the ripple effect into whatever high-margin businesses remain. This will continue until the beancounters are removed from running the company.
The idea that Ibm should still be in the laptop business is absurd. It's a lost cost commodity business which is exactly what Ibm can't do. They should have exited MORE businesses like that, including p, storage, SO, years ago. Ibms biggest challenge is that they won't exit declining but revenue producing lines to pursue products that actually grow.
The number one example of that today is the mainframe. Dead end tech that has a huge, but slowly declining cash flow and customer base. People like girlish and cringley who think 80's or 90's era Ibm should or can be rebuilt are smoking something newly legalized.
Microsoft is a perfect counter example - they're destroying their on prem software business to build a cloud business, and are now the worlds most valuable company as a result.
The laptops in front of the directors at the corporate boardroom table no longer proudly bear the IBM badge. Nowadays those directors see someone else's logo - Apple, Microsoft, Lenovo, HP. That tells them, loud and clear, everything they need to know about IBM.
I would agree. Playing catch-up is very hard. IBM was once a great company but now a has been. $34B for RH is a desperation play.
Skinny jeans and man buns, hooped ears with bushy beards, going up....