IBM has pushed all of their chips to the middle of the table.
3rd Q was a disaster from any point of view that you wish to take. (revenue,profit, Redhat, strategic, cloud, etc etc).
IBM is betting the farm on Z15 in 4th Q.
There is not any other place to harvest revenue or profit, EXCEPT to cut costs.
NOTE services has already said during the 3rd q call that they are going to be weak in the 4th.
It’s not shaping up the way IBM had primed the street for
Sit Ginni across from Project Debater and have an open debate on the best course going forward.
So what is the way forward.
5% gain since the middle of the great recession is very bad - if you compensate for 10 years of compounded inflation the actual value has dropped maybe 30%. Meanwhile, the rest of the market has almost tripled and tech market maybe 5x.
Clueless mismanagement.
Good Lord. Look at that stock chart from 2010. Shameful the Board of Directors have allowed this once successful company to sink to this level. Senior Leadership only cares about enriching themselves and getting out in a few years. The stock chart speaks volumes.
Oof that IBM stock vs S&P500 chart. Should be criminal.
https://static.seekingalpha.com/uploads/2019/12/3/21489041-15753593259804933_origin.png
I'd hate to see IBM plotted against a basket of tech stocks for the same time period, probably 10 times worse. Disgrace.
Yet another article saying it’s time for Ginni to go.
https://seekingalpha.com/article/4310549-ibm-shareholders-should-be-concerned
Here is he bleak future ahead of us. IBM + RHT is not the #1 hybrid solution leading chapter 2. It is IBM + RHT + $20B bond with a hybrid solution that is same wine in different bottle. With such ball and
chain the only sure thing in our future is more RAs.
There are still some of us around who would remember PureSystems, PureData, PureApplication - IBM's first foray into private cloud-in-a-can. Flop #1. Then came the IBM Cloud and overhyped Watson. Flop #2. Then the smart people fixed up some containers and Kubernetes, rebundled the cloud as ICP, which is reminiscent of PureSystems. Flop #3. Spend $34B to dress up ICP, mix in some OpenShift pixie dust this time, call it Cloud Paks - the hybrid solution everyone needs. Same wine different bottle again. Who in corporate amnesia would notice the difference? Soon to be Flop #4.
Cloud Pak runs on one Hyperconvergent Infrastructure (ICP), which runs on another Hyperconvergent Infrastructure (AWS/Azure/GCP). So that is how IBM+RHT going to take the hybrid world by storm? So users didn't go for ICP, but they will go for ICP over someone else's cloud? Where is the price advantage of paying for ICP+AWS/Azure/GCP? What about Performance? Stability? Supportability?
Who wants to sign up for IBM Object Storage powered by GPFS powered by S3 running on AWS VPC? Only techmedia pundits and trade rags would tout such monstrosity as disruptive technology. Oh yeah, Ginni too.
RHEL deployment on AWS is far less than Windows deployment. RHEL on AWS is only better than last place SLES. Ubuntu deployment is more than all other distros combined. Ginny was right, the cloud runs on Linux, but she bought the wrong Linux distro.
It was imperative for RHT to shop itself around, they could see in the cloud they barely have a foothold.
That is what is ahead of us. Pass the Prozac.
This is a really interesting article published a year ago after Redhat was announced. It sure looks like Ginni is following this fella’s advise.
https://www.forbes.com/sites/steveandriole/2018/11/01/ibms-post-red-hat-quandary-buy-build-or-dress-up-for-an-exit/
"Look at the new job reqs high school required with bachelors as preferred..."
All of the college grad reqs say that. The system auto-disqualifies a candidate if the hiring manager puts Bachelors as required. Seeing as most college grads get hired in Fall, months before they graduate in Spring, this has been the only solution to the (somewhat lame) system. I had to deal with this as an intern/co-op in 2015.
Look at the new job reqs high school required with bachelors as preferred...
The downward spiral continues. If i were a company looking for help and needing professional services, that would scare me away from making a deal with IBM.
It’s all about revenue and synergies Where is IBM going to generate revenue from and at what speed. Is there intrinsic value captured within IBM due to its technology, relationships, marketing prowess, labs, or innovation? If yes, what is the break up value of IBM vs today’s price? 150 per share? If there isn’t any intrinsic value within IBM vs today’s stock price, could you harvest the entire company and streamline it. Taking out the management overhead and redundancy certainly would be found money. Perhaps 1/3 of its current value. That would value IBM at 150-160 per share. If you buy it, streamline it, and align its intrinsic value with how it may grow your company, perhaps a 50% premium could be justified. (170-180 per share). Again where is the revenue growth coming from, and at what speed. IBM has grown the “goodwill” line of its financials to the point that it hurts. It’s very hard to recapture goodwill once you have spent it on acquisitions
NA will be a disaster in the 4th quarter, leakage is rampant, exec's telling partners to use lower bands to recover costs... deals will not close and are being lost.
Older employees being pushed out or planned to be in 1st quarter when the news pops on the street. Look at the new job reqs high school required with bachelors as preferred...
I think you're right that they're betting the farm on an early iteration of a dying, niche technology, but you missed the second half of the bet, which is Red Hat - another business rapidly coming to an end with the pivot to cloud tech (and no, openshift isn't cloud tech...it uses Linux, which real cloud tech doesn't need).
Tell me how that's a long-term strategy for growth?
"Hybrid cloud" is another way of saying "barely cloud"
IBM is more concerned with Agile at this point. They cannot bag the elephant, just a few mice.
Don't worry. "Let's put smart to work."