The Decline and Fall of IBM appears to have two main goals. The first is to give a resumé of IBM's formation and early history, plus a detailed assessment of the past three decades. The second is a call to arms — a call to get rid of IBM's current level of failed management and go forward with a new one. ...
Much of The Decline and Fall of IBM is taken up with the words of people working at IBM. It seems that they were more than willing to talk to Cringely in a series of what, at times, sound like confessionals. You get a genuine sense that these people really, really like IBM. They like working for the company. They want to carry on working for it and they want those in charge — be it Ginni Rometty or somebody else — to keep the company in business so they can do just that.
But along with that warm feeling, Cringely is also telling a much bleaker story — the story of The Deadline. Since the days of Sam Palmisano as CEO (he came after Lou 'The Man Who Saved IBM' Gerstner), the company has had an internal target to grow its earnings per share (EPS) to $20 by 2015. That's next year, and more than a few people are wondering if the company can achieve that.
IBM’s willingness to pay underscores the urgency for Chief Executive Officer Ginni Rometty to get less profitable businesses off the books. Even so, letting the deal unravel shows Rometty wasn’t willing to exit at any cost. ...
Bloomberg News reported in June that Globalfoundries was primarily interested in acquiring IBM’s engineers and intellectual property rather than manufacturing facilities, according to people with knowledge of the matter. Globalfoundries would have acted as a supplier for IBM’s microprocessors, the people said at the time.
Globalfoundries, owned by an investment arm of the government of Abu Dhabi, had placed little or no value on IBM’s factories because they are too old, a person said two weeks ago.
To stay competitive in manufacturing, IBM may have to invest billions of dollars to keep its plants up to date with newer chip technology. IBM’s East Fishkill location cost $2.5 billion to build.
Bruno Di Leo, who formerly ran IBM’s growth markets and is now head of sales, will be in charge of setting up a new team to oversee the unit, said the person, who asked not to be identified because the information is private. Bramante’s new position has yet to be announced.
Revenue in the division fell 9 percent in the third quarter from a year earlier, dragged down by a 22 percent decline in China, where the government was revamping its economic policy, Armonk, New York-based IBM said yesterday. The performance helped contribute to the sixth straight quarterly decline in total sales for the world’s biggest computer-services company.
While no details of a replacement have been confirmed, or when exactly Stevens will finish up, an IBM spokesperson told ZDNet: "He will use his significant leadership experience to advance the causes he is passionate about. We congratulate and thank Andrew for his contribution during his 33 years of service with IBM and PricewaterhouseCoopers and wish him the very best of success." ...
During Stevens' tenure, IBM Australia has watched its profits plummet. The company reported total revenue for the 2013 financial year tumbled by a third, and net profit for the year went down to AU$233 million from the AU$355 million profit recorded during the previous financial year.
The company also made recent cuts to its local workforce, where 500 jobs were expected to be slashed in March, in addition to the 1,500 jobs culled during June 2013, as part of a global restructure plan.
Prior to that, IBM was dragged to court by the Queensland government after it allegedly failed to deliver as expected on the state's health payroll system.
So says Bloomberg, quoting a “person familiar” with the failed deal.
IBM's chippery chaps make fine product, but not so fine or in sufficient volumes to turn a profit. Big Blue is believed to leak a billion or two dollars each year.
Red ink is obviously unacceptable, but IBM has also given itself an ambitious earnings-per-share target that makes getting out of under performing businesses a very fine idea.
For Big Blue, the effort, dubbed IBM Global Business Services Online, gives it a shot to add new clients and ultimately up sell them to larger engagements. For existing clients, IBM can offer its knowhow through an easier digital delivery model.
The consulting mart will be available to clients in the U.S. and U.K. Once a click-to-buy transaction is initiated a consultant will contact the client within one business day.
During IBM's services peak, the company could get by with massive deals worth billions of dollars spread over a long period of time. IBM's services army could also layer in Big Blue's hardware and software as well as intellectual property. Those large deals are harder to find and IBM's consulting business remains a cash cow, but growth has also stalled.
As noted in our recent three-part series on the company, IBM's hardware business has become a drain on its earnings. The loss leader appears to be the Power server business, which has fallen into a big slump. But the East Fishkill and Burlington fabs are not exactly the stars of the balance sheet, either. ...
IBM has done a good job retooling the trailing-edge process technology in its older Burlington fab for relatively high-value RF parts. And, as I noted, East Fishkill is cranking out the latest Power chips. So that's all goodness -- or at least not terrible badness.
An early prototype has been made in the Cognitive Environments Lab, which opened last year at IBM’s Thomas J. Watson research center in Yorktown Heights, New York. It is intended to explore how software that can understand and participate in human interactions could “magnify human cognition,” says Dario Gil, director for symbiotic cognitive systems at IBM research.
China’s government excluded Apple products such as iPads and iPad Minis from the list of products that can be bought with public money because of security concerns, according to government officials familiar with the matter. That means the business-software apps IBM is building for those tablets may face hurdles reaching the burgeoning Chinese corporate market.
The Chinese government has been excluding U.S. technology companies from publicly-funded purchases and reviewed reliance on foreign products as tensions escalate between the countries over claims of hacking and cyberspying. The move against Apple products could deter the potential corporate customers that IBM is counting on to expand its mobile business. ...
Lia Davis, a spokeswoman for Armonk, New York-based IBM, declined to comment on the Chinese government’s move. Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment. ...
China’s government reviewed whether Chinese banks’ reliance on high-end servers from IBM compromises the nation’s financial security, people familiar with the matter said in May. Government agencies, including the People’s Bank of China and the Ministry of Finance, are asking banks to remove the IBM servers and replace them with a local brand as part of a trial program, the people said.
U.S. District Judge Joan Ericksen ruled that Carlson wrongly terminated a 10-year, $646 million agreement with IBM to centralize IT and finance and accounting functions after just five years.
Ericksen, in a 54-page ruling, dismissed Carlson’s assertions that its contract with IBM was canceled for performance issues and noted that the Minnetonka-based company began experiencing financial and growth problems caused by recessionary pressures shortly after it entered into the IBM contract. ...
The judge said that IBM was not without fault in the contractual relationship with Carlson.
“Problems — perhaps inevitably — arose in its execution,” the judge said. “IBM bears responsibility for some of those problems, which were particularly evident early in the term of the contract as IBM took over the [IT and finance and accounting] functions from Carlson in a transition that was anything but smooth.”
Pros: Learning new skills that you can take to another company. Coworkers for the most part are great to work with.
Cons: If you are of a certain age you are treated like garbage. In Dubuque there is no way to grow your career. No raises, no bonuses, first line managers play favorites. You never know from one day to the next if you are going to have a job. The managers do not have managing experience. If you screw up you move up. No sense of following business conduct guidelines even though we are required to read them each January.
Advice to Senior Management: Open your eyes! Just because the young chicks bat their eyes at you doesn't mean they are good enough to be moved into a higher band then those who work their butts off every day. Show some appreciation for your employees.
Pros: Big company, lots of opportunities, some really good individuals who really carry the overall company much further than it deserves.
Cons: Reward and recognition is only for the golden few, the quarterly-driven Earnings Per Share focus drives stupid short term thinking.
Advice to Senior Management: For a services company you cannot keep hitting the majority of your employees with such an atrocious compensation policy—the good people leave and you're left with the rest! You under-resource every account and then drive your employee base to work ever—increasing unpaid hours to make up the difference, making client delivery almost impossible.
Staff turnover is really on the increase and you really need to see that its management policy which is causing this. Instead of creating more and more highly paid Partners and Associate Partners, most of whom deliver nothing, you really need to recognise and reward those below who are doing the real work and ensure they are rewarded too.
Wake up IBM—your short term, EPS-driven focus is driving this company into the ground.
Pros: There is opportunity in IBM for the properly motivated person to get exposure to areas they would seldom see elsewhere.
Cons: Though the company espouses work-life balance there is no getting away from work. There is plenty of vacation time, but few higher-level employees seldom take an actual non-working vacation. The entire company is so mired in process that it can often be impossible to get work done. The push to off shore, or move into low-end factory type support is over whelming. Training is almost non-existent.
Advice to Senior Management: It is not possible to replace quality, skilled employees with process documents.
Pros: Work at home widely accepted. Benefits are not horrible.
Advice to Senior Management: IBM has effectively done everything possible to devastate their employees. We have lost every competitive advantage we once had to attract and retain top talent. Start valuing your employees again and make IBM a place where people want to work by treating employees with respect, fairly compensating them, and not doing everything possible to save costs on their backs.
Pros: Once was a great company. Great benefits, good base salary—lousy commission structure for quota compared to similar companies.
Cons: Lack of leadership from director level through senior manager. Didn't provide the right resources for on boarding and learning the company environment. All system training was via WebEx (as everyone is remote) so no on-site training with peers and real world examples. Everyone has been there way too long and the culture of old - is still being disseminated. Hiring manager told me quota was x and second half it was 100% increase. That is one way to limit the income potential of a top seller at IBM. Raise the quota that wasn't to be raised by a ridiculous amount.
Advice to Senior Management: Stop shedding good people and go back to a time when it meant something to work at IBM. I hope Ginni reads this and understands. I don't believe this is the kind of company she envisioned.
Pros: Start out with 15 days of PTO, plus some number of "personal choice holidays", meaning you get about a month of vacation time. Insurance policies are fine too. As a company, telecommuting is widely regarded as an acceptable practice, so you can work from home if you need to. I also found I was consistently being recognized for excelling at my job, receiving two moderate pay raises and a bonus in under a year based on performance alone. Neither were life changing numbers, but were appreciated nonetheless. Overall I felt that I was treated extremely well. Even outside of my own division, I feel that there are plenty of opportunities for me within the company should I choose to go after them.
Cons: I would describe the pay as "moderate". Sometimes I feel like IBM is more concerned with developing their image than developing their products and services. My team's pleas for more software developers to handle the obscene workload thrust upon us has been dutifully ignored. Although I felt my job as a software developer was secure, I did not get the same feeling for all other positions, like Sales, Marketing, HR.
The biggest con is absurd amount of bureaucracy you have to deal with on a daily basis. Examples: Submitting tickets requesting an approval to someone who has to request approval to approve your request.
A support system that integrates with a support system that integrates with a support system that integrates with a support system - all of which track the SAME THING.
You're forced to used Lotus Notes for an email client. Anyone who tells you it isn't that bad is trying to make themselves feel better. We're talking about a program that comes with another program called Lotus Zap, which only has a single purpose: Killing Lotus Note's process when it freezes on you.
I know the above examples sound like jokes, but I'm not exaggerating here. The amount of time I have wasted on slow, bloated processes and confusing interfaces is appalling.
Pros: Pay is decent if you have a favorable comp plan, though that's out of your control in most years. Benefits are good, not great. Lots of smart, professional people.
Cons: There's essentially no career planning except for what you do on your own. Most managers take little or no interest in mentoring.
Advice to Senior Management: Morale suffers when quotas double or triple from one year to the next. People need a plan to advance. You lose a lot of good people because people have unreasonable quotas and/or don't feel like they have a fair opportunity to advance. You've made quotas unattainable and at the same time cut the upside for the few who do make it. You've also cut benefits and perks like club trips and stock options. All while IBM profitability is the envy of the industry. You could do better if you cared about holding on to good employees.
Pros: The range of technologies being used is vast, depending on the project. There is great opportunity to move internally also and find projects of interest The work life balance is great, and working from home is supported by the company. I work from home 2 to 3 days a week
Cons: In my particular role, I am dealing with a lot of new or emerging technologies so it can be hard to keep up all the time. The canteens on premises are pretty bad with a poor level of food. There can be a LOT of politics in IBM due to its size (approx 450,000 employees worldwide) and this can be quite frustrating at times. Very little company entertainment, i.e. crap Christmas party, no social occasions with a few pints.
Advice to Senior Management: A bit more social "payback" to the employees with a few free drinks / nights out would go a long way.
Pros: It's a brilliant opportunity to learn how multinationals might work. You will probably meet a lot of brilliant people here as well with great ideas. Management can sometimes be very engaging, and willing to put a lot of effort for getting things done. Very good access to lot of software technology, although sometimes a bit outdated.
Cons: This is a bit contradictory assessment as the learning opportunities are great, but still the learning is very hard to put in practice. Growing your portfolio of learning, or your CV is under the stone. Lot of waste because the management doesn't sometimes know what they are trying to gain, and most importantly how to get there. For a company famous for so much of automation, it sometimes hurts your soul to see where it is used. Some of the own software has terrible ways of working, and instead of improving them, they are enforced to be used for more, and more things.
Advice to Senior Management: Better resource management (human and technical) would be beneficial for the workers, the IBM community, and for internal and contractual targets. Sometimes it would be good to look in the mirror, and ask yourself am I really needed for this. Hopefully local branches will gain more autonomy in the future.
Advice to Senior Management: Re-set priorities to value happy clients and motivated employees.
Pros: Flexibility in few projects alone. Other than this no other "pros" here.
Cons: Everything. Leave policy; Utilization concept; Compensation and benefits; No career growth; No trainings; Overpriced cheap quality food in cafeteria; No perks. Managers can do anything if they wish and mostly they do absurd things thinking they are the gods of this company. Only the God can save IBM from these people!
Advice to Senior Management: IBM will not give decent compensation, so let us leave that. Apart from that :- First ask the people in management to follow your rules properly. Change almost everyone in your senior management and the HR department. Else IBM would pay a bigger price later. There are so many things that need to be changed here. But at least, please give us good food, beverages and chats etc. at cafeteria (after all it's not free. We are paying for that).
Yes, that's three lost decades.
Now, as you might expect, the middle class has been hit particularly hard by the Great Recession and the not-so-great recovery. It's all about stocks and houses. The middle class doesn't have much of the former, but it does have a lot of the latter. And that's bad news, because, even though the crash decimated both, real estate hasn't come back nearly as much as equities have. So the top 1 percent, who hold more of their wealth in stocks, have made up more of the ground they lost. But, as the Russell Sage Foundation points out, the slow housing recovery means that, in 2013, median households were still 36 percent poorer than they were a decade earlier. ...
Though, to put that in depressing perspective, it's still a heckuva lot better than households in the bottom 25 percent, whose wealth never grew during the good times, and then plunged 60 percent during the bad ones. That's because, for both the middle and working classes, real wages have been stagnant the past 30 years, and housing equity has taken a nosedive.
At this rate, it won't be long until the American Dream isn't even a memory for the middle class.
But do you really think each and every one of the 7,500 is sincerely excited about leaving IBM? Well, most probably are elated to get out of IBM, but do you think they did an employee survey to determine this stated consensus? What's most interesting is that no single person, like an Adalio Sanchez-level executive individually signed it. Maybe they don't want to be too accountable for this massive and historic loss for IBM, which is short changing its long-term future? Or, maybe they just don't have the authority, as it seems everything is spiraling further out of control? -eXer-
The rest are frustrated at their inability to find a job outside of IBM, and confused with the lack of direction for STG, and angry because the latest leadership changes in STG India only made things worse. The employee morale here is lower than a snake's belly.
With all this mess, I am not sure how IBM can produce any quality products going forward; looks like we are entering a vicious circle. There are fears that there might be more RAs in the making, given that Glo-Flo ditched us. I find this site a great place for IBMers across GEOs to know what is happening. Please share some updates from your Geo/Site. -STG-INDIA-
Alliance reply: If you choose to spend your money on an attorney to fight IBM, that is your choice. But know this: You are an "At Will Employee". That means that IBM can fire you for any reason or no reason. IBM makes their own rules concerning the PBC, their salary pay outs; even the way they decide to make changes to the 401(k) plans being paid at the end of the year, instead of bi-weekly like they used to do. IBM can break or revise ALL those rules whenever they choose. There is nothing illegal about it.
Any attorney worth their education should be able to confirm what Alliance@IBM is saying here. Until you have a written contract (whether it is an individual contract or a collectively bargained contract) signed by you (or your union representative) and the IBM company, that guarantees specifics of your performance plan, you have no standing or power to dispute the way that IBM does business with their employees—you.
Keep that in mind, when you decide to contact an attorney. It may save you a stack of money that you can use to support yourself and your family until you find another job. IBMers in the USA need to understand that Organizing to get a union contract is their ONLY option to level the "At Will Employee" playing field.
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.