Thread regarding IBM layoffs

Here it comes Services will definitely be impacted

https://finance.yahoo.com/news/infosys-ibm-collaborate-help-businesses-170000214.html

If there is really a trillion dollar market to be had with cloud on Power or Z, you can bet that both Amazon and Microsoft are doing what they can to capture and/or migrate that market. They won't pre-announce it of course, it will just appear one day fully-baked and superior to IBM's mediocre attempt. Power should be doable by throwing enough money at the problem.

No sane company is developing software for Power or Z, without an eye to future migration away from those.

Many companies and governments who look at long-term costs already have migrations underway.

This leaves IBM eventually with only whatever monopoly they can preserve on Z, milking whatever customers are left holding that bag. Meanwhile the competitors to those companies who successfully migrate will eat their lunch profits-wise.

IBM will end up being a mainframe-only shop.

Jhbx. Ask yourself this question. Who has the best cloud offering as it relates to Power or Z. Amazon, microsoft, or even Google can’t touch IBM when it comes to their legacy SW. that’s where IBM has made their bet. Mining their legacy SW. NOTE go out and try and see what amazon, Microsoft, or even Google offers when it comes to that. Their offers are quite lacking. Now put yourself in a CEO’s position and ask yourself. Are you going to switch to amazon who has a fairly poor z offering, or are you going to go to IBM who knows the legacy cold. Also note there is easily a trillion (yes trillion with a T) of legacy SW out there to be mined. It will take whoever does this well over 20 years to mine it. I’m not saying IBM is great at this, BUT they certainly have a legacy advantage here, and they have finally figured out they should exploit that

But even if IBM transitions to all Cloud what do they have to offer? IBM's business seems to be helping customers (sorry, "clients") choose other people's tech and charging a fortune for advice. No one needs that as the balance sheet shows. If IBM goes to all Cloud they need to have the best Cloud offerings in the market and to do that IBM has to 1) start innovating and 2) manage to catch up with and then pass some very good competition. How can that ever happen?

JFDB. You could not have said it any clearer. IBM needs to innovate again, but that horse has most likely left the IBM barn. Hopefully the RedHat barn may be able to save them. IBM has spent the last decade buying stuff and s—ing the life out of it. (Now THATS innovation). Management has no one to blame but themselves. IBM is getting lapped in the cloud by essentially an e-book seller and a desktop monopoly. Abandoning Intel was yet again another complete misreading by IBM management of where the marketplace was heading, and a capitulation of the cloud marketplace. Once abandoned, IBM conceded 90% of the marketplace. Hell of a decision Ginni hell of a decision. IBM then compounded the mistake by laying off the folks who were suppose to backfill that Intel void (Eg the power and z sellers). With no one calling on them, IBM customers went elsewhere. Now that the Intel horse has escaped IBM’s barn there is nothing left to farm, but Enterprise legacy. It’s IBM’s last gasp and yet it has potential. Farm your monopoly. Since you have no innovative ideas, you have to yet again buy them. HELLO Redhat. So we are in a position of lack of ideas, lack of innovation, and lack of sales and growth. Can anyone say 1993? Gerstner had to come in and nuke old IBM to save it. My guess is Krishna will pull the same rabbit out of the hat, but empower Whitehurst to do what is necessary to be innovative again. That means IBM must transition from services to cloud. How does IBM accomplish that? It means most services and especially the services managers must go. Krishna will have to nuke IBM to save it. Buckle up folks it’s going to be a bumpy ride to transition IBM. It’s going to be the same Gerstner playbook, but a different day. Rightsize, realign, re-engage. It should take till end of 2020 to see if the OLD management mistakes can be fixed. Good luck to all. One early sign of success will be a flattening of management. If you see that by 3rd q, you know IBM is on the right path.

@jtsg typical behavior of offshore teams. 10 managers for every 1 worker. Isn’t it embarrassing how leadership disparages their team in front of the client? Although your wife’s company is to blame by going for the cheapest bidder instead of quality delivery. IBM didn’t create this problem, but they contribute to it.

Interesting comments and perspectives.

Wife’s company transitioning to IBM managed data center as most of their data center staff is of retirement age. The IBM conference calls on speaker phone in the house have been entertaining.
15 IBMers on the phone all playing hot potato. If one blinks and actually does some work for my wife (customer) the other 14 pounce on him claiming it was not his job to do; managers are then brought into the conference call to clarify rolls. The 1 who did the work is not present in the next conference call. Meanwhile problems stack up.
I am old school so I would can the 14 doing nothing and their managers. It seems IBM cans the 1 who did the work.

IBM needs to solve this problem to survive.

@ikof, there is absolutely no doubt IBM has 100K too many people. The headcount needs to go down to about 250K for this company to be viable. Now, headcount is one thing, IBM still needs to start investing again in the right areas. But I believe with the savings made on the headcount, that money can be re-directed to R&D.

One difference: the 360 and 370 were revolutionary products, invented by IBM, designed by IBM, developed by IBM. No one else could do what IBM did. Now today IBM invents nothing, designs nothing, develops nothing, just buys yesterday's tech. And IBM is desperate to do something, anything, to succeed like other companies do.

In 1993 IBM posted losses of 5 billion and 8 billion.

IBM today is still profitable but its profits are shrinking, but that's not even close to any kind of loss.

Unless all sales suddenly go over a cliff we are stuck with this gradual decline for decades.

If we compare IBM 1993 to IBM 2020 the comparison is stunningly similar. Headcount 375K+ (1990 whittled down to 320k 1993) vs 400k+ 2017 whittled down to 350k 2020). Revenue 62 billion (1993) and declining rapidly vs 77 billion (2019) and again declining fairly quickly. 1993 game plan (HW and SW sales transitioning to services) vs 2020 (services transitioning to cloud). This transition seems to attack IBM once in a generation and IBM has to bet the company to transition. (Note this happened when the 360 came out and again when the 370 came out). If we use the Gerstner transition plan, and project it to 2020, we should expect IBM to resize, realign, and recommit. Gerstner laid off 60k in aug 1993 and down sized again in 1994 to get to 219k total active headcount. (approx 100k headcount reduction). If we used the same plan and applied it to today, it would suggest approx 120k worth of headcount should be impacted. If we look at Revenue per head count, the numbers under Gerstner actually come up in the 1995-1996 time frame and stabilize around 250k headcount wise at the 76 billion in revenue. Given that model, the 2020 resize, realign, recommit would suggest IBM is aiming for a 100-110k headcount impact. Good luck to all as it’s IBM’s once in a generation transition time, and IBM always seems to make MAJOR changes to save itself!

@aezq: You describe exactly my experience with IBM "reps" around 2010 while working for another company.

It was almost a joke.
We were a bunch of programmers considering if we build a solution ourselves and spend our time on it, or if we buy a similar already existing IBM product, spend money but save time to work on customer projects.
That means, we was on the knowledge level to build that thing from scratch right there - just it would slow us down. And we wanted to talk with (as we expected) a tech guy more experienced than us.

A pair of young men that showed up was dressed up in suits and was equipped with a ppt presentation. All they could do was memorize sentences from that presentation. As for answering questions, they was hopeless. It was like a visit from another planet, and there was obviously no second meeting.
Wondering who is the target audience for such "reps". Somebody really desperate with too much money and no access to internet to google a better option? Customers need real stuff, not talking.

IBM asks for patience because the product was moved? No one forced IBM to move it. Now they use their own bad prior decision as an excuse for failing today.

I hope IBM culture changes. I have been an IBM customer since the 1970s. IBM has gone from exceptional service to horrible service in the past decades. I noticed the decline beginning in the 1990s and dramatic decline in 2000s on.
In the early years the IBM tech reps were competent and wanted to solve the customers problem.
Today the IBM “tech reps” sent to customer have zero knowledge, they show up with a preset agenda of selling you a list of products, if you ask any question you then are treated to series of meetings with a dozen “experts” none of which can answer your question. If you try to engage them to solve your problem, they pretend to listen and and then go back to their list of products they want to sell.

The software and hardware products and support in the early years was stellar. Not so now. One by one each products quality and support have plummeted. Each time we complain to our IBM rep, it is explained to us that the product was relocated to another country and to have patience while they get their act together—- which incidentally never happens. other than core subsystems, we replaced all IBM products long ago.

IBM services we have never been impressed with. Way too many chiefs bickering and posturing while a few wet behind their ears workers squeeze out their first programs - while the customer is charged for expert programmers.

I am preparing to retire, my last act is to flip the switch on the mainframe and say adios to all things IBM at our site.

My advice to IBM. Customer is king, focus on the customers needs. Focus on quality products. Purge all the self-serving blowhards from your ranks.

Note this is big news for system Z BUT it really hurts Power as this isn’t an option on Power.

https://www.cbronline.com/news/openshift-on-ibm-z

IBM may tone deaf in the past, this time there is no blue wash of RH, or IBM will alienate the open source community. IBM can be opinionated, but RH needs to stay open source, or $34B will go down the drain.

" Each time there was a brief honeymoon period, followed by bluewashing of the products and people, followed by voluntary mass exodus of the employees of the acquired company, followed by IBM destroying the products we worked so hard to create."

Can attest to this experience coming from a company acquired by IBM.

Here is some speculation for you. AGAIN speculation only If the CFO said the restructuring for GTS is closer to the high end of the last few years spend, that means approx 1 billion or 10,000 heads from the 1st world countries. If you are going to spin off perform out of GTS, you most likely wouldn’t waste your lay-off spend on a spinoff. Thus there may be two initiatives in play

@5ihw+13lsUY00 I hope you are right. Purging 50% of the old guard management and would be a good start. Deeper would be more effective.

I believe you may see the opposite happen this time. IBM bought Redhat to change the IBM culture, as IBM realized they were going down the drain. To do that, IBM will have to purge at least 1/2 of all the existing managers and band 10 and above folks. That means Krishna has his work cut out for him. He will have to swing the ax, or make an offer most of the older managers can’t resist. I expect both with most of it announced before July 1, and most of it done by year end 2020

Company culture is difficult to change. IBM culture is so ingrained it would take a decade of seriously hard work and purging of non-adapters to change.

I worked for three small software companies that were acquired by IBM.
Each time IBM said we will not change your great culture, we want to learn from your culture and fix our culture. Each time there was a brief honeymoon period, followed by bluewashing of the products and people, followed by voluntary mass exodus of the employees of the acquired company, followed by IBM destroying the products we worked so hard to create.
The first time I believed IBM and hung around IBM long enough to understand IBM mechanisms. The second and third time I exited immediately.
One day I asked my IBM manager at the time - Just how did IBM expect to create and develop new products with all the rules,hierarchy,procedures,silos,endless meetings,separations of duties - his deadpan answer was “We don’t, we buy it, or put competitors out of business with lawsuits”.

Now I am seeing the inverse happening. The company I work for brought in a laid-off manager from IBM, who began to infect our company with IBM culture. He has since hired some of his IBM buddies thus accelerating the infection.

IMHO Don’t hold your breath waiting for the IBM culture to change. The managers, directors and on upwards create and protect the IBM culture as they understand how to manipulate the system for personal gains.

I expect nothing to change. IBMs mantra will still be “the beating will continue until morale improves” and “there’s not enough money for raises and bonuses. Be thankful you’re still employed.” These mantras will be repeated to you every year until you’re selected for termination. IBM is basically a Ponzi scheme. You’d probably make more money in the lower ranks of Amway.

IBM needs a culture change, badly. UnderGinni it has become a culture of fear and intimidation.

The fact that AK and JW don't even step into their new roles until April 6 and GR stays on as Chairman until year end (and you know they've been planning this since the RH merger closed) shows just how slow and indecisive everything is at IBM.

People quickly forget that Softlayer was once the largest privately held IaaS company and the first enterprise ready Cloud outpacing AWS and Azure in the late 2000s. IBM took a market leader and turned it into a market laggard. How? Eliminating incentives for employees, cutting funding to the bone, and sending work to offshore silos. I work often with IBM Cloud employees and they have to justify funding for routine product maintenance. Development is only approved when it can be tied to a specific client demand and purchase commitment. Innovation is completely out of the question. Sales staff get by, only by reselling VMware SDDC licenses and calling it cloud revenue. I’ll never forget 2 years ago when I was told to never suggest IaaS to clients because no SLA could be given. We were told to only suggest VMware or bare metal. I told them that I knew Softlayer had an SLA, what happened in the past 5 years to eliminate it? No response, speaking volumes. If I ever get to interact with the new CEO, I would ask him the same thing since it happened under his watch.