IBM is overdue to restructure the non-services portion of IBM. GTS was the first round of restructuring as they were hemorrhaging money. SW and infrastructure are now in the que along with WH...
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Zhr I must take issue with your statement. IBM mints free cash flow and they are entering a HW cycle (Z) that will drive that free cash flow. Redhat is growing at 300-500 enterprise customers per quarter. That growth drives what IBM is trying to do “CONSULT” , “sell SW”, and “catalyze HW sales”. NOTE scale out power and scale out storage play very poorly in Redhat sales. Scale out customers would rather pay their ISV’s and fall back to their legacy SW stack vs implementing LINUX. THUS IBM will most likely selloff scale out IF and its a big IF they can find a customer. The customer would need to see value in the scale out product set, and most likely have an already established channel. That limits the potential customers to just a few. The restructuring comes mostly in SW sales. IBM has two product lines in SW. Legacy IBM cloud SW, vs the Redhat stack of offerings. IBM is adopting the Redhat stack for enterprise customers at the expense of the IBM legacy SW stack, and as such the legacy folks will become redundant. So what to make of the plan? The selloff if it happens will fund the redundancies and IBM will shrink. Management during the 1st q analyst call said that. They called the redundancies “stranded costs” Overall IBM’s plan is to slim the old girl down to GBS consulting and SW sales. Yes there will be some services offered on enterprise Z and Power, but GBS or SW can easily absorb them. The HW sales of enterprise Z and power will also be absorbed as they will be a finite customer set
Put some lipstick on the Red Hat pig and dump
Restructure or Sell-Off? I'm going with a sell-off at a Dollar General value. The only thing worth anything anymore is the client contracts/listing.