IBM - dinosaur or future growth

[Oz investor]

one day it will face the corruption bogey ,

it has just systematically done too much wrong ( especially in government contracts around the world to recover any past glory )

maybe the Chinese will buy it and re-invent it .

 

[Montecfo]

I was employed by a big blue shop, some wore IBM underwear. A couple of tier 5 data centers full of big iron.

When we went to cloud for some workloads they were considered and easily beaten.

Well they are #4 but lead in private cloud. It's a big growing market

 

[Spock]

Well they are #4 but lead in private cloud. It's a big growing market

Check the accounting.
In order to show growth in cloud IBM takes some part of their business (ex various software products), slaps a new cloudy name on it, and starts including that units numbers as part of their cloud business. Boom instant growth in the cloud unit without a penny increase in revenue or earnings.

 

[kcowan]

Blockchain is imploding, and their AI pieces are subpar. Company I work at checks it regularly. The healthcare AI is getting backlash from overpromising, and their other stuff is not competing with Microsoft, Google and Amazon.

I was employed by a big blue shop, some wore IBM underwear. A couple of tier 5 data centers full of big iron.

When we went to cloud for some workloads they were considered and easily beaten.

Wwo this is unsettling news. It seems that the executive are believing their own hype.

Check the accounting.
In order to show growth in cloud IBM takes some part of their business (ex various software products), slaps a new cloudy name on it, and starts including that units numbers as part of their cloud business. Boom instant growth in the cloud unit without a penny increase in revenue or earnings.

Yes IBM has always been expert at accounting!

 

[ESRwannabe]

IBM has played too many games with how/where they report segment data that I just don't trust them. There is no way to know if their growth areas are really made up of new stuff or just re-hashed old stuff.

I just don't trust them. So staying away.

 

[BeachOrCity]

IBM has played too many games with how/where they report segment data that I just don't trust them. There is no way to know if their growth areas are really made up of new stuff or just re-hashed old stuff.

I just don't trust them. So staying away.

+1

To your point, while they vaguely describe "Strategic Imperatives", they don't actually specify the products / offerings included in each category. If you look at the actual financial reports that I assume are actually audited, all revenue they officially break down is Services, Sales, and Financing. Nothing more.
If you look at the 10K or 8K there is just not any detail.

In one recent call they admitted some portion of mainframes are in their "cloud" numbers. Who calls a mainframe cloud?

 

[RobbieB]

My FA bought and then sold IBM for a little cap gain and the divis.

 

[Spock]

+1

...
In one recent call they admitted some portion of mainframes are in their "cloud" numbers. Who calls a mainframe cloud?

I agree with all the comments about not being able to see what business is considered "strategic" and have said the same about IBM diverting old business lines into new ones in order to make the new ones look like they grew
but mainframes are the original "cloud".
A cloud is just rented compute time on remote compute resources owned and managed by somebody else (another dept within the same company or another company).

That is exactly a mainframe environment (jobs are billed based on CPU time to individual charge codes, etc.) and why I earlier said IBM led in cloud and VMs decades ago and yet they still got run over by Amazon and VMware.


The very fact that IBM completely dominates in mainframes and can't leverage that into cloud leadership is another example of how inept they are at adapting.

 

[Totoro]

Not a specialist either, but keeping an AS/400 humming isn't the same as a cluster of commodity hardware I imagine. Although as time went on I'm sure Google and consorts started designing custom stuff too.

 

[MRG]

I agree with all the comments about not being able to see what business is considered "strategic" and have said the same about IBM diverting old business lines into new ones in order to make the new ones look like they grew
but mainframes are the original "cloud".
A cloud is just rented compute time on remote compute resources owned and managed by somebody else (another dept within the same company or another company).

That is exactly a mainframe environment (jobs are billed based on CPU time to individual charge codes, etc.) and why I earlier said IBM led in cloud and VMs decades ago and yet they still got run over by Amazon and VMware.


The very fact that IBM completely dominates in mainframes and can't leverage that into cloud leadership is another example of how inept they are at adapting.

They were and still are. Many are mostly DB servers for cloud workloads but.... Many others run the majority of corporate workloads, including cloud servers. Some of these are things many of us frequently use. [emoji111]

 

[Vincenzo Corleone]

Reading this article made the expression "jumped the shark" come to mind.

AI might concoct your next perfume
https://www.engadget.com/2018/10/25/ibm-ai-perfume

From the link:
"Perfumers look out: IBM Research partnered up with one of the top producers of flavors and fragrances, Symrise, to create an perfume-concocting AI. Named Philyra, after the Greed goddess of fragrance, it uses machine learning to sift through thousands of ingredients, formulas and industry trends to derive what IBM considers to be unique combinations. IBM is leveraging the AI to help perfumers design the next great scent rather than a machine that will replace experts of the human nose."

Really? No...really??

 

[CoolRich59]

IBMs mid to upper management is absolutely clueless technically and on how to manage people or business - they can only parrot buzzwords.

Dinosaur.

I can’t get specific because it happened just a year ago, but I was representing a client working a fairly large deal with IBM.

Clueless is the only way to describe how IBM managed to lose a sale where they had no real competition. After several fruitless weeks of discussions, my client got so frustrated with IBM’s incompetence that they put the project on hold (which caused business deadlines to be missed) in order to find another technical solution and awarded the business to another firm.

And, talk about tone deaf, afterwards IBM send my client’s EVP a letter complaining that they were treated unfairly.

 

[CoolRich59]

I like the position in the cloud, particularly the private cloud where they leverage their relationships with their existing customer base.

Well, I can only speak with knowledge of my last 2 clients, both legacy IBM customers, and both now heavily into the cloud (one of them is building their own cloud). To my knowledge, neither of them is using IBM for any cloud services. As you can imagine from my prior post, I doubt that client’s CIO would even take the time to listen to their pitch.

 

[Montecfo]

Well, I can only speak with knowledge of my last 2 clients, both legacy IBM customers, and both now heavily into the cloud (one of them is building their own cloud). To my knowledge, neither of them is using IBM for any cloud services. As you can imagine from my prior post, I doubt that client’s CIO would even take the time to listen to their pitch.

I hear you. They are #4 in the cloud. Lots of detail out there to that effect.

 

[NW-Bound]

IBM dinosaur? Or future growth?

But, but, but why can't a dinosaur grow? How else did some get to be this big?

Sorry for the joke. I do not own, nor follow IBM.

 

[CoolRich59]

This thread is bringing back all kinds of memories for me. I just realized that it was the IBM deal I worked that started me on the path to FIRE last year!

So, on a personal level, I am very grateful for IBM.

 

[MichaelB]

Bloomberg reports https://www.bloomberg.com/news/arti...o-acquire-software-maker-red-hat?srnd=premium

International Business Machines Corp. is close to a deal to acquire software maker Red Hat Inc., according to people familiar with the matter.

 

[24601NoMore]

Worked for a IBM for some time. IMHO, they're a dinosaur in every way imaginable. Working for the company was literally like being in a government job somewhere around 1952. Bureaucracy on steroids, bad management, products that in my experience were not even remotely competitive. Yet, management seemed to consistently get rewarded for inept results and shrinking marketshare. Go figure.

I personally wouldn't buy IBM stock even if I could get it at a discount.

 

[NYEXPAT]

Bloomberg reports https://www.bloomberg.com/news/arti...o-acquire-software-maker-red-hat?srnd=premium

They are paying $190.00/share for RH which is a 60% premium over Fridays close!

 

[NW-Bound]

I have never worked at IBM, but can imagine what it is like. Most (all?) megacorps are like that.

When a company gets big with many employees, it's harder to keep track of the star performers, and you need them at all levels and disciplines, not just in the R&D division where the number of employees is of course small and tractable. And when they run into trouble and don't know the cause, the solution is usually "More managers". And they have more clueless managers, then they have to bring in consultants who know even less about their problems.

There's a life cycle to everything, including companies.

 

[ransil]

Dinosaur.

I can’t get specific because it happened just a year ago, but I was representing a client working a fairly large deal with IBM.

Clueless is the only way to describe how IBM managed to lose a sale where they had no real competition. After several fruitless weeks of discussions, my client got so frustrated with IBM’s incompetence that they put the project on hold (which caused business deadlines to be missed) in order to find another technical solution and awarded the business to another firm.

And, talk about tone deaf, afterwards IBM send my client’s EVP a letter complaining that they were treated unfairly.

Sounds like Westinghouse

 

[braumeister]

On the good side, one of my friends retired from IBM after spending his entire (long) career there. And boy, did he have some great stories to tell!

 

[Spock]

They are paying $190.00/share for RH which is a 60% premium over Fridays close!

They paid $34B for a company that earned $259 million on revenue of $2.92 billion last year...

 

[neihn]

Bloomberg reports https://www.bloomberg.com/news/arti...o-acquire-software-maker-red-hat?srnd=premium

That's interesting. They kept saying that they don't want to get into linux distros business while I was there, and I just left few months ago

I let go all IBM stocks when it was around 180 couple years ago, just a few months before that it was > $220.

 

[Totoro]

I feel bad for the redhat employees.