Thread regarding IBM layoffs

IBM: Why yes, Red Hat is doing great. Thanks for asking. The rest of Big Blue? Sure, wait – someone's at the door...

https://www.theregister.co.uk/2019/10/17/ibm_q3_2019_financials/

Fantastic quarter: Sales, down. Profit, down. Business as usual

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Post ID: @11Bhslq1

9 replies (most recent on top)

Only a matter of time before they wreck Red Hat as well. Acquiring profitable companies and destroying them is what they do.

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Post ID: @11Bhslq1-6imv

This does not bode well for GBS.

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Post ID: @11Bhslq1-4cxz

@11Bhslq1-4ghz "Redhat has been added to cognitive" "You spent 34 billion on cognitive to change the revenue profile"

Do words even have meaning any more? "Cognitive" was IBM's branding of AI and Analytics. Red Hat brings a Linux distro and a Kubernetes distro, neither of which have anything to do with "cognitive". IBM continues this game of relabeling all this old legacy c-ap as high growth "strategic imperatives", "cognitive", "cloud", etc. saying it represents a greater and greater percentage of their business. But the math doesn't work. How can you be replacing low growth old stuff with high growth new stuff and yet top line revenue continues to decline quarter after quarter after quarter?

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Post ID: @11Bhslq1-4und

Q4 will be critical. It's traditionally IBM's strongest quarter overall. You have the Z15 revenue from the mainframe cycle that wasn't there Q4 last year. You have Red Hat's incremental revenue (supposedly growing at 20%) that wasn't there Q4 last year. If Q4 2019 revenue doesn't beat Q4 2018 revenue, it's over, there's no more IBM story to tell, the core business is shrinking so fast that even a $34B acquisition can't stem the tide and there aren't going to be any more acquisitions like that for the foreseeable future.

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Post ID: @11Bhslq1-4kku

3bax. Even if HW doubles (1.5 to 3.0) from its poor performance in 3rd Q, HW has become such a small portion of the overall revenue profile, that it can’t move the needle. Z has always had a cyclic revenue profile, and Z15 will certainly help (that’s the advantage of being the only game in town). The 2 other portions of HW (Storage and Power) are in a steady down turn, and IBM has reduced their investment to reflect that steady down turn. Power brings AI via large memory database, and Storage brings “flash”, but both continue to shrink to LINUX, Intel, and cloud. Redhat has been added to cognitive and that will grow cognitive. 34 billion in, and a steady 5-15% growth out on a 5 billion revenue per quarter segment. That leaves services. 6.7 and 4.1 billion revenue per quarter Respectively shrinking at 3-5 %. What has IBM done to reshape either of those divisions? We can all agree zip as the results continue to disappoint and revenue continues to shrink. That’s approx 60% of the company shrinking away. IBM you know what has to be done. Radical surgery is in order to change the revenue profile per person. You spent 34 billion on cognitive to change the revenue profile. Are you willing to do the same for services, or do you just sell the body shop piece, and claim victory (the HP model). IBM board, the choice is yours, but the street has completely lost faith in IBM’s innovation mantra, and instead see’s the true nature of the current Exec team (milk the host for every drop of bonus). IBM it’s time to change! Get out of he body shop business, and get back into the innovation business. Will it hurt to sell off the body shop. Sure it will, but getting something for it today is worth more to share holders vs holding it till it shrinks to zero. Do what needs to be done, and take the revenue hit while the body shop still has “some” value. Otherwise we have all seen this movie before, and folks will just watch IBM slowly fade from the screen.

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Post ID: @11Bhslq1-4ghz

Mainframe Z and HW Storage were expected to be rough this Q, they just launched new releases. -You don't go out and buy an iPhone the week before a newer, faster one comes out for the same price. Expect IBM Z and Mainframe Storage to do rather well over then next few Qs. After that... gasp.

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Post ID: @11Bhslq1-3bax

They are wasting time and resources on agile accelerate in where the numbers are negative.
You think they will stop? ha, you wish

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Post ID: @11Bhslq1-1xvh

This chart says it all. If you work where the numbers are negative, IBM Will most likely need to chat

https://s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/6b8ba5e4-f112-11e9-93dd-b5294b4b49f8.JPG

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Post ID: @11Bhslq1-rsl

A billion dollar cut in capital expenditure I wonder whose pocket that came out of. If I had to guess, I would say IBM is not being as aggressive with their staffing and equipping of data centers. Now who runs those (GTS?). When the CFO says we are going to manage services for profit, and not market share, you can bet the farm, they are going to save their way to prosperity. When IBM bought Redhat, it was a complete change in strategy. We went from being everything to everyone via strategic initiatives, to a fortune 1000 seller pitching cloud and LINUX with everyone else being cast to AMZ and MSFT. IBM is now in the process of downsizing services to satisfy the fortune 1000 worldwide. It’s about to get ugly as approx 1/3 of IBM must be culled.

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Post ID: @11Bhslq1-rfm

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