The Downfall of IBM

BetaNews.com ^ | April 27, 2012 | Robert X. Cringely

[Daffynition]

Reducing employees by more than three quarters in three years is a bold and difficult task. What will it leave behind? Who, under this plan, will still be a US IBM employee in 2015? Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.

[oh8eleven]

Your argument would have worked just as well for Enron until early 2001.
But their stock price was artificially and purposely inflated by corruption and criminal activity. Big difference.
BTW, did anyone ever figure out WTH they were selling?

[Flying Circus]

My point is you need to understand something of the company beneath the earnings statements. This article reveals what underlies the stellar earning of recent years. Earnings are great, unless they are hollowing out and destroying the value of the company underneath. I believe while IBM is displaying magnificent earnings in the near term it comes at cost to the value of the brand and trading away the best assets.

[Gabz]

We made money by being the access to IBM product with out having to deal with IBM.

Good for you!

The lies was what my husband hated the most - not just to the customers, but to the IBMers.

[SunkenCiv]

Thanks justiceseeker93.

IBM’s been hanging on by its fingernails for twenty years now, and this isn’t their first downsizing. They’ve managed to continue to play in the big leagues for the very small market for high-performance mainframes, but their penetration of the PC market ended sometime before they tried their PS2 OS gamble.

Around 1980 IBM had hired Microsoft (instead of Digital Research) to produce their PC-DOS, but MS held on to the rights to port it to other hardware, which led to the IBM clone market. Hardware margins (except for Apple, which controls its OS and hardware and doesn’t skimp) for PC makers is about the same as bananas.

IBM’s small box products are things like servers (some are based on the Cell, which is the CPU of the PS/3). I’m not sure about their copier business, but I can’t remember seeing an IBM copier in any office or other business that I’ve visited during the past 15 years, so that’s probably not good for IBM.

MS has gotten more nimble since the Vista fiasco (there was actually a Vista/Bill Gates joke in one of the episodes of “The Big Bang Theory”), and is introducing OS versions with much greater alacrity under its current management. Ultimately the homogeneity of MS-compatible hardware (since “IBM-compatible” is a moribund term) that will result from a single-OS market will benefit Linux and even UNIX, including Apple’s OS.

[Political Junkie Too]

I don't know. IBM doesn't do shovel-ready work.

-PJ

[oh8eleven]

Earnings are great, unless they are hollowing out and destroying the value of the company underneath.
"Value" is perception. A company's responsibility is to the bottom line and the shareholders.
There's nothing wrong with IMB earning profits and streamlining itself to stay that way.

[Ernest_at_the_Beach]

LOL!

This is a venting thread....for all of the old IBM Haters...

[utford]

Hmmm - if this is what IBM wants, maybe it would be good for all US based businesses to stop doing business with IBM - maybe they should change their name to non-US-BM