How about identifying areas that have potential for growth and will be able to thrive and separating them from the fast sinking rest of the company?
Would that help?
9 replies (most recent on top)
@isw - how would you steal a post on an anon forum? really, if you were to repost - nothing changes - it's not like the post belongs to you now - there is no reference to you or to the original poster at all.
all what changes is the fact that the content changes place on the site - you'd be giving it more exposure therefore benefiting it.
i'd say, don't ask for permission and just do it if yo'd like.
I'd like to ask the Cabletron poster to create a separate thread on it - this would be a good topic to discuss.
Alternatively, I am ok with reposting it as a separate thread just wanted to make sure the OP is cool with it - don't want to steal anyone's posts
Correct. Everything that can be offshored, will be. Cisco should be excluded from all federal and state contracts going forward.
streamlining its geographic model
Code for moving everything offshore.
The idea sounds great, but with Chuck leading I doubt that it would work.
Does anyone remember Cabletron?
It is almost like karma that what we did to Cabletron should happen to us... Crazy
As Cabletron expanded its reach in the networking business, they initially moved into Layer 3 routing by partnering with Cisco, co-developing a Cisco router that would fit into the MMAC-8 hub. Cabletron ultimately developed its own routing capability, but found it increasingly difficult to compete at the low end of the Ethernet market and continue to invest in high-end routing technology.
Recognizing this fact, Cabletron reorganized as a holding company in 2000, hoping to apply appropriate focus to the different parts of its business as they had evolved over time. The holding company was set up to control four networking firms:
- Enterasys Networks of Andover, Massachusetts, which was based on the original core products of Cabletron. Enterasys later merged with Cabletron Systems the holding company, though keeping the Enterasys name, before going public in 2001. Subsequently, Enterasys was taken private in 2006 by The Gores Group, which is owned by Alec Gores. In 2008, The Gores Group acquired a controlling interest in Siemens Enterprise Communications and merged the acquired company with Enterasys, pledging with Siemens to invest up to €350M in the new entity.
- Riverstone Networks of Santa Clara, California, which was based on the assets of YAGO Systems, a company acquired by Cabletron as an attempt to move into the Switched Ethernet business. Riverstone Networks was the only actual spin-off of Cabletron's reorganization, and it was later acquired by Lucent Technologies, which in turn subsequently merged with Alcatel Networks. This final merger resulted in Riverstone assets becoming redundant with Lucent products and technologies, causing Alcatel-Lucent to wind down Riverstone Networks operations. Eventually, Riverstone was placed into Chapter 11 bankruptcy and liquidated.
- Aprisma Management Technologies of Durham, New Hampshire (a subsidiary of Enterasys following the Cabletron paper merger). Aprisma held most of the original Cabletron network management technologies that were based on the SPECTRUM software suite (thus suggesting the name of the company). Aprisma was subsequently acquired by Concord Communications which in turn was acquired for $350M by Computer Associates, now renamed CA, Inc.
- Global Network Technology Services (also known as GNTS) of The Woodlands, Texas, a network installation and management company. GNTS employed more than 800 people but was dissolved in 2001, a casualty of the dot-com collapse and subsequent contraction in demand for network services.
Sure, if it wasn’t all “fast sinking”.
Cisco sells legacy network equipment. Without government intervention, Huawei would destroy Cisco in North America. We rely on government intervention to ensure our business model is sustainable.
Imagine if Ford/GM were able to prevent Japanese cars from being sold in America.
IBM literally did this today by separating managed-infrastructure services business, while zeroing in the rest of the company on hybrid cloud software and services...
https://www.barrons.com/articles/ibm-is-sharpening-its-focus-on-the-cloud-with-spinoff-51602170397
- IBM Is Sharpening Its Focus on the Cloud With Infrastructure Spinoff
By Eric J. Savitz - Updated Oct. 8, 2020 11:33 am ET / Original Oct. 8, 2020 11:19 am ET
IBM plans to spin off its $19 billion managed-infrastructure services business, while zeroing in the rest of the company on hybrid cloud software and services.
The tech giant said it expects to complete the transaction via a tax-free spinoff to shareholders by the end of 2021. IBM (ticker: IBM) said the combined companies will pay dividends no less than its current rate. The business to be spun off—the new company will be named later—accounts for about a quarter of IBM’s total revenues. IBM did not name a leadership team or board members for the new company.
IBM said it plans to take a $2.3 billion charge this year to reflect “structural actions” to streamline its business. The company said it is “streamlining its geographic model and transforming its go-to-market structure to better engage with and support clients,” but did not detail any expectations for staff cuts or facilities closings.
CEO Arvind Krishna said in a statement that the company will now be “laser focused on the $1 trillion hybrid cloud opportunity,” referring to computing systems that combine “private clouds” operated by companies themselves and “public clouds” from tech firms like Amazon.com (AMZN), Alphabet (GOOGL), Microsoft (MSFT), Oracle (ORCL) and IBM itself.
“Now is the right time to create two market-leading companies focused on what they do best,” Krishna said. “IBM will focus on its open hybrid cloud platform and AI capabilities. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations.”
Both companies will be positioned to grow faster and will be more able to enter partnerships and take advantage of opportunities, he said. That will create value for both customers and shareholders, according to Krishna.
IBM said the new, smaller version of the company will move from a business with more than half of its revenue in services to one with “a majority in high-value cloud software and solutions.” The company said more than half of its business will be in the form of recurring revenue.
IBM said NewCo will have relationships with more than 4,600 clients in 115 countries, including more than 75% of the Fortune 100, with a backlog of $60 billion. The new company will focus entirely on managing client-owned IT infrastructure. The business will have 90,000 employees.
IBM also said it expects to report third-quarter revenue of $17.6 billion, slightly above the Wall Street consensus at $17.5 billion. Non-GAAP profits will be $2.58 a share, right in line with consensus.
IBM CFO Jim Kavanaugh said in an interview that the spin should “unlock value for clients and shareholders.” He expects the transaction to take 9-18 months to complete.
Kavanaugh said that after the spin, IBM expects to produce sustainable mid-single-digit revenue growth “over the mid term,” with “strong margin accretion and free cash flow accretion.”
Early views about the deal from the Street were upbeat.
“We are positively biased on this transaction as it created a more focused and (relatively) more agile IBM to go after the hybrid growth opportunity,” Evercore ISI analyst Amit Daryanani wrote in a research note. “Net/net, we think this a positive step for IBM to further simplify their narrative.” He kept an In Line rating on the stock, with a target of $137 for the share price.
IBM shares have spiked 7.5%, to $133.58. The stock is down fractionally for the year to date.