Hi there! This is a guy from another great company DXC (check out https://thelayoff.com/dxc). Past two days, we have been inundated with news that IBM and DXC are in talks for a merger. Seems something is really going on as 13million shares of DXC were traded in two days (normally 1.6m per day). If you thought AK and his friends are spectacular, check out DXC's financials over the past three years under the stellar leadership of DXC CEO and ex-Accenture gang. Annual Revenues have moved from $26Billion to well on the way towards $14Billion, while the CEO has given himself a miserly pittance of 132% raise. And in the last townhall he held in February he yelled at employees for pestering him for rises, pending since last 18 months. He has not held a townhall since then and in fact HR has taken down the video from DXC intranet. I am sure all of you IBM'ers are very excited to join us and be part of a wonderful merged company.
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@6orl+1ixGvkqd interesting DXC seems to have the same problem..... If you look at the DXC board the approach They're taking seems to be wage freezes to force people to leave. Not exactly elegant but if you read the executive transcripts they do seem to be making progress in re-balancing the work force. Evidently this is an industry wide problem look at ATOS and Conduent the list goes on.
The US realized it couldn't trust Beijing, not by a long-shot, which is why it banned Nvidia sales. However, Lebanon will likely come to Beijing's aid and steal whatever is necessary from the US and pass it to Beijing, just to ingratiate itself in hopes of a few more yen. Meanwhile Taiwan is scared out of its mind, afraid of Beijing's next moves to take over, so figured why not just throw them a bone with a bigger piece of the pie to keep the knives at bay. Meanwhile, Chennai continues to act like an irrelevant clown. What a family. They deserve each other.
Infrastructure is an ugly baby. Some contracts pay well and are worth pursuing and automating and some contracts needed to be off loaded to the low cost Indian body shops. IBM knew a lot of the contracts they bid on were going to lose money even before the ink on the contract dried, BUT they thought having the total relationship would gather them more business. That did not work, and you have to compliment AK for realizing that, and dumping GTS and engaging a new go to market strategy (mainframe enterprise) that encouraged profitable engagements (redhat and SW modernization) The strategy encourages other divisions of IBM to get involved and play nice with the other divisions instead of competing with them. So what does DXC bring to the table that IBM may be interested in? More enterprise customers looking to modernize their SW stack and feed all three divisions. If DXC can dump the body shop customers to Kyndryl then I expect the deal to happen, and IBM to trim the acquired GBS help from DXC.
The divestiture of Kyndryl was not about getting out of the Infrastructure game folks, it was about quickly getting rid of the workforce who couldn’t execute. This was all described in the 2018 Bain report - in order to run GTS effectively, IBM would have to cut too many people who work in labor protected counties. They simply couldn’t legally do it that easily. The plan was always to rebuild Infrastructure in house or buy a company who did it better. I saw the plans myself. The recession was something they couldn’t anticipate though- no way IBM could get a loan now with cost of capital being what it is and Red Hat hasn’t paid off the debts enough. They need to get the cash in another way or use another mechanism. I’m not at IBM anymore and don’t have any connections I’m on good terms with enough to ask, but I’m guessing they’ll do a partnership for a few years until cost of capital goes down.
After they did get hooved away from the Big Blue trough by the other hogs That's gotta hurt Who's the weakest link or the biggest stink?
Kyndryl couldn't afford to acquire a hot dog cart. And I don't think the egos running that dumpster fire are quite done yet. They just finished their first year. There's more bilking to be accomplished before allowing any kind of merger.
Makes absolutely no sense So given the a$$hats running this $h1tshow I guess it's a strong possibility But Kyndryl on the other hand hmm...
IBM has no free cash flow for the down payment.
It would be hard to imagine IBM buying DXC given that over 50% of DXC’s revenue is in GIS (infrastructure). Would IBM take GBS off of DXC’s hands? Most likely yes due to the mainframe content. (IBM’s strength) and IBM’s strategic direction to move toward enterprise utilizing Redhat. The real question is IF TRUE, what does DXC want to be if they divorce mainframe? Given that IBM doesn’t want to be in the scaleout business and DXC’s heritage is HP scaleout, perhaps an asset swap is in the making, with storage being a cooperation.
They need to sell off the woeful Red Hat first.
It would another id--tic IBM decision… like Red hat. But not surprising since IBM execs are all id--ts.
@OP, hate to break it to you... IBM hasn't got enough money to acquire DXC.
If true This is IBM buying a mainframe customer set
https://dxc.com/content/dam/dxc/projects/dxc-com/us/pdfs/about-us/partner-ecosystem/DG_8351a-22%20DXC%20IBM%20Partner%20Fact%20Sheet%20Final.pdf
It has been a long time that IBM does not care about clients.
... and at the same time, IBM Nordlux (Nordics and Benelux which recently was merged) is now going to also merge with IBM CEE (18 countries of mostly Eastern Europe).
... VM and VSE is being spun off?
... and a lot of other items, I am not aware of
Bottomline: Huge impact to our IBM clients and employees.
It would be impossible to see IBM entering back into “infrastructure” after just having spent 18 months exiting it. BUT could you say partnership? Everyone takes what they do best, and exits what is an after thought to them. Essentially each becomes a specialist for what they do best. Kyndryl gets Infrastructure, DXC gets most of the consulting business including everything (power, storage, consulting) except the fortune 1500, and IBM takes the fortune 1500 mainframe business. Everyone quasi wins as they are all now migrating to a specialty shop vs being all things to all customers. No idea if this is what may come of it, but it sure looks good on paper
“ There's a reason IBM got rid of that and no reason to go back in.”
It is all smoke and mirrors for IBM. IBM loves that.
I would not be surprised... IBM is out of options because nothing has worked, even Red Hat. So, it is time for the Execs to come up with an id--tic solution to try to confuse and make believe Wall Street that IBM is on the comeback! This has been the same playbook for the past 10+ years. It is a new beginning again...
Welcome DXC employees... you think DXC was bad, just wait to see how IBM is... it is a total sewer!
That would be the day!! Just can't wait for the announcement.
Is that really a merger or a takeover of one company by the other one?
I don't believe it. DXC is more akin to Kyndryl than GBS. There's a reason IBM got rid of that and no reason to go back in.