What are your thoughts from the IBM perspective?
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5zgg. The IBM CFO stated on the record to Wall Street that he was going to shake up GTS. The shake up is going to be lead around the Fortune 1000 companies. GBS and GTS will for the most part get combine (Eg the parts that IBM wants). GBS will consult, advise, transform, and migrate, then GTS will come in and perform (think run). THAT equates to a pile of GTS folks getting displaced as execute only relates to cloud (everything else must go). Also NOTE the CFO said the restructuring of GTS will pay for itself via cost take out. (That means it’s coming sooner rather than later. )
“And as I just said on the prior question, we finished the year pretty strong in GBS with regards to signings growth, returning to overall backlog back to growth and we see an accelerated GBS positioning going into 2020. And to your question, that's really led by, you know we've talked about the rationale of Chapter 2 around hybrid cloud, around a large portion of mission critical workloads that are going to move to the cloud as we move forward and hybrid is going to be that destination.
I think what you're seeing is the natural early innings of that playing out, and that is represented more so in project-based businesses around cloud advisory, cloud application, migration, and advisory services. So, consulting is leading the way, but to me, that's the tip of the arrow that's going to lead then AMS, and then eventually as that matures, our GTS managed services going forward.
In Global Technology Services, revenue declined 4%, consistent with our expectations as we came into the quarter. We again had year-to-year declines due to lower client business volumes, impacting some of the more traditional labor-based managed services. We are taking actions to accelerate the shift to higher value segments of the market opportunity. We are introducing new managed services offerings for public and private cloud, in areas like cybersecurity, data management, and hybrid orchestration.
We are investing in joint services offerings across GBS and GTS, and deploying joint go-to-market capability, as clients look for solutions across applications and infrastructure. We are expanding our cloud data center footprint, and we are taking structural actions to improve our cost competitiveness, while deploying a more asset-based delivery model.
And when you take a look at tax rate, very good question. We printed in 2019, 8.5% all-in. We guided pretty much right between that, 7% to 9% overall. That does include discretes as we're trying to give you increased transparency and what's in our expectation, but very important to note, is I talked about we will be taking structural actions to reposition our GTS business from a cost competitiveness perspective in light of what we're seeing in the marketplace. And unlike last year where we had a funding event with regards to a gain that offset a charge, this year we're taking a charge and we're going to absorb that through the return of that. So, we really don't see a benefit overall, as we go forward.”
look for the Red Hat impact later in 2020/2021 when IBM execs milk the upper sales people for contacts/obtains technical rights and then kicks anyone who isn't billable to the curb using offshore to backfill.
The roles remain, but the jobs are sent offshore. Business operations like HR and Finance are most assuredly sent to India as soon as the deal closes. Sales and marketing sent to the Philippines. Client relationship managers will be milked for their connections by IBM sales reps then asked to transition their administrative responsibilities to junior project managers in India. Then look for squeezes in the product development organization. Just because IBM operates with a skeleton crew, the same will be applied to you with a complete disregard for product quality. Jobs will be sent offshore that you would have never imagined. If your clients have a need for local staff, it will be sent to a shanty town CIC.
Always. IBM keeps the acquired people for a year and dumps the highly paid sales people. Part of the IBM acquisition play book.
Almost assuredly there will be some. Some early, and then more after a year or two.
Eliminating the redundancy is always part of the business case in these deals. So the answer is simple - yes.
No. But the work conditions will make it so unbearable that you’ll leave on your own.
Hard to say, but very often it does mean layoffs.