A compactly summarized, concisely written, by-the-numbers breakdown.
https://www.forbes.com/sites/greatspeculations/2019/06/04/what-ails-ibms-cloud-business/
12 replies (most recent on top)
Google is a piece of garbage makes IBM look like Saints in comparison. As far as the article, I think it is more about demographics than anything else. There are waaaay more Small businesses in US than large businesses that are locked-up into contracts.
Thus the REAL growth is going after the small / commercial space for companies that don't even need servers yet alone a data center. Then there are tons of MSP's out there that sub-out work for lowest possible cost. Meaning IBM is too expensive for the commodity labor and biz model.
Growth is fueled by ISV's that do all the work in Cloud or most of it at least i.e. Salesforce.
Google cannot grow any more, they are already under magnifying glass for monopoly issues, they will likely be split
I would agree Google would highly benefit to acquire IBM... They were already considering acquiring RH, once the IBM-RH acquisition is done they can get both!
1) IBM acquired SoftLayer over 6 years ago and SL was already 8 years old at that point. Whatever infrastructure they once had isn't worth much now.
2) RedHat is NOT a cloud business no matter how often IBM insists it is. Yes, Kubernetes is USED for cloud deployments, but RH's business model is to sell support contracts for open source software.
3) Google hired Thomas Kurian from Oracle for EXACTLY that reason, they don't need to partner with IBM.
Uls. Could you elaborate on your answer. You say spending billions on capex is an entry into competing with Microsoft and Amazon. I agree. Didn’t IBM get their checkbook out when they bought Softlayer, and ATT’s datacenters. ALSO spending 34 billion on Redhat (Yes I-know it’s not , but it’s real green dollars) is no nothing to sneeze at. One last point is you say Google has nothing to gain from an IBM relationship. Again not trying to pick a fight, but IBM does bring “enterprise” relationships (think Fortune 100) to the table. Everyone downplays those relationships, but IBM owns them in spades and can exploit them in spades. I was assigned to several Fortune 100 customers, and being able to call on the CEO at any given moment brings a LOT of power and leverage. IBM has that Google does not
@Zqd81ZR-tds There's only one way for IBM (or anyone else) to catch up to Amazon and Microsoft in cloud and that's to spend BILLIONS of dollars in CapEx on data centers and fiber. Google is doing this now, no one else is. Google has no reason to partner with IBM or anyone else, but whether or not they are ultimately successful will depend upon a number of other factors. All of the other irrelevant cloud players - IBM, Oracle, SAP, etc. are not willing to make the required investments, so instead they just come up with ways to re-classify their legacy stuff as "cloud" and then spend a smaller amount on marketing to convince people that they're serious players in this space.
When will any investor learn that until IBM actually discloses how each of the BUs revenue is made up, it's simply a pointless exercise reading these speculation and analyst reports. We all know that IBM crams all the old legacy c-ap into these BUs to prop up the revenue.
Just looking at the gross revenue numbers there is a fair question to be asked. If everything goes perfect for IBM, how does IBM every catch up? Amazon, and Microsoft could use their monopoly/being there first/innovation to lock IBM out. It’s a VERY heavy lift for IBM to crack this. I know folks have p--poo’ed this idea, but it would not surprise me to see Google and IBM form some kind of alliance to try and crack the top two’s “monopoly” power
I stopped reading after the first bullet: "The boom in the cloud growth has been driven by growth in public cloud, while IBM’s stronghold is in the data center (or private cloud) markets due to its strong position in mainframe computers."
Anyone who thinks that "private cloud" is simply synonymous with the data center and that everything run on-premise is automatically private cloud is not qualified to be writing these articles. Unfortunately, companies like IBM would love to re-define reality like this.
Poorly written
Made my head spin
OP thanks for the share nonetheless
Those numbers look very good
The Street does not trust those numbers tho
Very misleading because Ibm pads 'cloud' revenue with a bunch of old on prem stuff, collocation hardware, etc. Real cloud revenue isn't anywhere near what those numbers claim.
Funny thing is that red hat doesn't have very much cloud revenue either...most on on premise licensing for Linux. want to bet Ibm rolls it all into the cloud number?