It appears that the only "cloud wars" associated with the author of this article are those that he's blowing from his own b-ng. What a clown.
https://cloudwars.co/ibm/why-ibm-ceo-arvind-krishna-earned-a-for-debut-quarter/
3 replies (most recent on top)
Oh I think you are absolutely wrong. AK and the CFO know exactly where the numbers are and they are aiming to dump the low margin businesses. Remember IBM has a 30% built in cost of doing business due to overhead. That means if your division’s profit margin is below 35% IBM is shopping you. GTS and GBS are the two easiest targets. Both on average are 28% and 34% respectively. Given thoses averages that means approx 3/4 of GBS and 1/2 of GTS must go or be restructured (say to a gig environment) to close the profit model. Cognitive is in the 70’s and includes cloud and Systems is in the mid 50% and USA cost of doing business if you pursue the Enterprise model (mostlyZ and big Power boxes). Ginni wanted to reduce IBM to 100k heads world wide, with the rest being contracted when they had the demand. AK is still pursuing that goal and you will see more coming most likely in Aug. New CEO’s at IBM tend to take 3-4 months to announce their restructuring. AK came on board 4/6 so Aug is the sweet spot. Follow the money or profit margins if you will. IBM will absorb some loss leaders to build share, but all in all it’s got to be a business with 35% margins, or they are not interested. 35% is the ultimate goal AK and the CFO are aiming for. They don’t care what the basic business is, but IP and research/patents always flow at at least 35%. When IP crosses over the 35% mark IBM abandons the basic manf/research business because the IP has zero burden rate
I read that article. It's a joke. AK has no more clue than his predecessor.
We will find out quickly.... AK said the number priority is REVENUE growth...
So, it is going to be very easy to rate his performance.
I wish him well, unfortunately I think he will fail miserably like Ginni the Eagle!