IBM is a very capable company when it comes to technology R&D. But they've always seemed to struggle to develop those capabilities outside of high-end consulting work.

IBM had the technical chops to create the likes of ARM, nVidia, or any number of big tech companies. They just never seemed to have the leadership capabilities to get out of their comfort zone. I understand the idea of keeping a business focused, but Alphabet and MS don't seem to struggle with managing a diverse portfolio of companies.

I wonder how IBM looked at 22 and 45 years old.

The answer probably depends on where you define the "birth" of IBM - the founding of the companies that merged to create IBM, the date of the merger, or the date they changed the name and/or began producing business machines with the name "IBM" on them.

In the context of the thread, it's reasonable to say that both at 22 and 45 IBM had strong leadership (Watson Sr.) that successfully managed a diverse group of subsidiaries. Although in neither case are there any products like a modern digital computer involved.

At 45 I guess they were expanding into Europe.

Yep, selling Hollerith card equipment to Germany in the 30's and 40's.

That math doesn’t work out. IBM was formed in 1911. 45 years old would be 1956.

Also doing business in Europe in the 1930s doesn’t mean that’s when they expanded. That business could have been decades old by then.

Some quick reading of the history of IBM and subsidiaries suggests they were doing business in Europe by the 1920s.

Like Nazi allies, according to some Holocaust survivors: https://en.wikipedia.org/wiki/IBM_and_the_Holocaust https://en.wikipedia.org/wiki/IBM_during_World_War_II.

Maybe in 20 years we talk about Apple/Microsoft/AMD etc like that...but it's not Germany but China.

It's not like the Holocaust survivors were the ones in the the commuting offices witnessing the deals.

IBM failed to leverage their silicon designs for driving down their cloud costs. As long as the IBM cloud runs mostly on third-party hardware they have no sustainable competitive advantage.

They offer their POWER machines as AIX and IBM i environments, as well as IBM z as LinuxONE VMs (under KVM instead of z/VM) with encryption everywhere for the security paranoid.

I suppose a z15 LinuxONE cloud offering would be attractive for them to offer because of all the built in observability, and also because those cores can be ridiculously oversubscribed before anyone notices.

As for pricing, they wouldn't need to pay their margins unless they eat into their other segments.

Running on third-party hardware is leveraging comparative advantage. Like Itanium, POWER is more expensive and there are very few reasons you would want to run on it. Definitely not a good fit for Cloud.

Full vertical integration isn't necessarily good business. Even Apple doesn't do its own manufacturing.

POWER is more expensive for us to buy, but IBM pays for it by the square inch of silicon. By that metric, it's probably very competitive with other server platforms. With OMI, they can also offer larger instances than anyone else while having more flexible tenant allocation because a single node can host a lot of tenants of different sizes up to the size of the full node, which could dwarf anything AWS and Azure can offer.

Sony PS/3 was a bold move though in that vain.

I've been trying to figure out whether the mainframe business is being spun off or retained as part of this split. Haven't been able to figure out whether IBM even manufactures this equipment. I know they outsource the chip fab now. I'm not even sure what the mainframe is called any more, they seem to change the name every couple of years. IBM Z? zSeries? System Z? Something with a "Z" in it I think.

Their latest is the z15 and their branding refers to IBM z (the same way they call their POWER lines IBM i, for the descendants of the AS/400, and IBM p, for the POWER boxes that run PowerVM, Linux and AIX). They build them mostly to order, in-house.

Additionally, the article doesn't mention IBM research, which I assume will continue to stay with IBM.