On the IBM side, weird shit is a foot. The GTS spinoff into Khndryl is very, very bizarre. They're a profitable part of IBM but need to be excised, quickly? It's causing chaos for accounts that had deep GTS coverage as the account teams are basically adversarial. The rest of IBMs portfolio is stagnating as they chase fads and lose to niche players with better overall value. Especially with the Data/AI space, startups are killing them.

Now try explaining to the customer why IBM is recommending an IBM's competitor while IBM is also offering the same product with a better price directly to the customer. It doesn't make sense at all.

Consider two service-focused business units (GTS and GBS) that sometimes are complementary but mostly adversarial and it is chaos for the customer.

Spinning-off GTS (and I dare say, GBS too) is better for the customer and for the product business units.

I think a lot of Red Hatters are tired of having the IBM sales force show up in their OpenShift accounts asking about upgrading them to Cloud Paks.

I am not an IBMer though have worked with many former IBM folks, and work with Red Hat on and off every month or so. From what I've gathered, Red Hat is the new core of IBM. The goal is to grow Red Hat, specifically their OpenShift offering (which is huge in gov't as it allows for hybrid clouds), and make centre the biz around that then the "traditional" IBM consulting style.

I dunno...they've been building processors since the 1950s.

Starting in the late 2000s and early 10s, executives were crying for 'cloud skills' as part of their continuous 'workforce remix'. Did Amazon build AWS by hiring cloud skills? Of course not. You build a cloud with a wide array of talent including hardware, chip design, software, and systems engineering. IBM had all that available in house.

I remember their stuff from the pre-Thinkpad era. Quite a company. Working for both a large competitor and for a small company that was trying to sell to them they seemed clumsy but still had an amazing portfolio.

My guess is that they just need to merge/break-up/reconfigure into oblivion. Just another AT&T/HP/ITT/Polaroid/Xerox

Anyhow I wonder if this better-than-thou, stuffy corporate attitude leads itself to internal re-org cycles where it results in no identity and no central vision, just internal battles.

It seems like other similar size large companies, like Apple, can be successful so maybe their leadership doesn't show these character traits?

I always thought IBM should have bought ARM, the combination of IBM chip tech plus ARMs designs and Red Hat for the software stack would make for an amazing tech business.

While many poor decisions were made inside of the company, I ultimately blame Wall Street for IBM's downfall. Remember that back in 2011, Palmisano finished strong with IBM's Watson winning Jeopardy, IBM Software delivering consistent >80% profit margins on $10Bs in revenue, and a strong services backlog.

Many don't know that Palmisano's departure was preceded by a Wall Street mediated competition for the successor. IBM Software Group SVP, Steve Mills, was the obvious choice. The guy was a lifetime IBMer, intellectually superb, allegedly with photographic memory, effective public speaker, and with a proven history of leading (at the time) the 3rd largest software business in the world.

Unfortunately, Wall Street didn't like Mills because he did not come across well on CNBC. The guy is chubby and doesn't look like a conventional CEO. So Ginny Rometty, with a claim to fame based on building IBM Global Business Services from on the PwC acquistion became the leading candidate. Ginny is "media friendly" and the diversity factor didn't hurt.

Once Ginny came on board, leadership style changed from long-term to fickle and neurotic. Instead of committing to the hard work of building complex technology (e.g. cloud), any signs of technological challenges became reasons for business strategy changes at the top level. What started as a build decision (IBM SmartCloud) turned into a buy decision (Softlayer), followed by a build decision (IBM Bluemix), and so on.

However, Ginny's biggest failure was her inability to raise capital on Wall Street. IBM's engineers weren't failing at building cloud technology because the engineers were terrible (some were, normal distribution rules still apply) but because cost cutting policies starved engineering teams though attrition and lack of hiring. Staffing a team meant bringing in internal hires w/o the right skill set or taking a gamble on offshore (global) resource. At the same time Google was hiring left and right with comparative ease (as an aside, now they are dealing with the consequences).

Bottom line, Ginny couldn't get the capital to fund internal engineering efforts for the scale of the transformation needed to sustain IBM's success with machine learning (Watson) and cloud.

I place the blame on Wall Street since they made the bet on Ginny and then left her out to dry.

IBM has been essentially a financial engineering machine for many years, with their ridiculous 5-year EPS targets and all the rest of it. While I was there they even removed plants, copiers, coffee machines, televisions, pads, pencils, pens and everything else in sight to "save" money.

The "leadership" of IBM drove the company in to the ground, period.

You just answered your own question. As I pointed out, leadership was "picked" by Wall Street investors. Share buybacks and financial engineering exist to keep the investors happy.

If they didn't buy back shares and invested in R&D the stock would have gone straight down instead of sideways. As I said the leadership "couldn't get the capital to fund internal engineering efforts for the _scale_ of the transformation needed to sustain IBM's success"

In the five years since you left IBM in 2016, GOOG has tripled in value, while IBM has lost 8 percent. I think I know which set of consequences I'd prefer to deal with as an executive, shareholder, or employee.

I agree completely that the change in leadership marked an inability to really bring WATSON to market, and some other products too.

While I was an intern, I sat next to ExtremeBlue interns and team members working on Watson. The technology was awesome and they were working like mad. Sleeping under the desk. By 2015 the push had stopped and everyone knew it was a failure to launch.

Watson for all it's academic glory, was kind of vapourware as a product.

It just never really did anything materially useful. They did a lot of hospital trials that fizzled. Way, way over-promised.

A little bit along the lines of ElementAI - it's hard to commercialized AI directly.

Google et. al. do it right by incrementally improving things like translation, voice recognition ... it's making waves within academia for it's quality, but it's something consumers are hardly aware of.

Since IBM is not a consumer company, there's only so much sugar and hype that Watson can provide (winning Jeopardy was a brilliant thing) before the rubber has to hit the rode.

I'm not so sure if it's fair to blame a new leader for that one ... because I'm not sure what a realistic business application for Watson would be. (Maybe there are hard and real products, but they're probably going to be very context specific etc..)

Building great tech is hard enough, then building great products on top of that - just as hard. Doing it within a massive multinational that makes it's money from grifting governments and megacorps into paying for really expensive services probably just is not going to work.

MS, Google, FB ... they have the operational fidelity and product line to leverage AI internally, IBM, not so much.

I don't know what the future of IBM looks like aside from just being another Accenture.

Ultimately much of the system had to be rewritten and this took years by which time, it was just another competitor in a crowded market