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Thread: Is IBM in trouble? |
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Thread Status: Active Total posts in this thread: 5
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RicktheBrick
Senior Cruncher Joined: Sep 23, 2005 Post Count: 206 Status: Offline Project Badges: 
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Here is an interesting article about IBM. http://www.businessweek.com/articles/2014-05-...loud-computing-challenges. The main point of the article is that Amazon beat IBM in a bid for a contract with the CIA. The contract was for a cloud computing system. One would think that IBM would have an enormous advantage in getting this contract. IBM leads the world in how many patents they have so it would seem that with their huge lead in experience and number of software and hardware engineers they would lead everyone by a large margin. When I think of Amazon, I think of a competitor to Wal Mart for the retail business not a competitor of highly sophisticated computer systems. I think that WCG is almost the opposite of cloud computing since cloud computing is a centralized computer and WCG is a decentralized computers. The article stated that IBM was late in getting into cloud computing but I still do not know how Amazon could hire enough software and hardware engineers to compete with IBM. I hope that WCG was not a distraction for IBM.
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ryan222h
Senior Cruncher Joined: Sep 4, 2006 Post Count: 425 Status: Offline |
It's all about the money. I'm sure amazon undercut IBM's bid. Nevermind that they don't have the resources to deal with it, they will deal with that after they win the bid. And when they suffer another healthcare.gov fiasco the CIA will come crawling back to IBM surely.
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Sgt.Joe
Ace Cruncher USA Joined: Jul 4, 2006 Post Count: 7668 Status: Offline Project Badges: 
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I do not think IBM is "in trouble." The article makes some good points, but I think this is a case of"turning the Queen Mary."Big institutions do not pivot on a dime. Transitions take time and investment. Also, I do not think Amazon is profitable. They keep increasing revenues, but at what cost ? Amazon P/E is 489 vs. IBM 12.7. Amazon's net profit margin is .24% vs. IBM 10.6 %. I agree the IBM can not "cut" its way to future prosperity, only investment in R&D and executing on that investment will enhance the probability they will be successful in the future. Amazon can not afford to stumble, while IBM can sustain itself if it does stumble in some areas. IBM needs to be vigilant in pursuing areas which provide a better good or service at a better value than its competitors.
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Sgt. Joe
----------------------------------------*Minnesota Crunchers* [Edit 1 times, last edit by Sgt.Joe at May 24, 2014 8:56:56 PM] |
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twilyth
Master Cruncher US Joined: Mar 30, 2007 Post Count: 2130 Status: Offline Project Badges:
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IBM has always focused on high margin businesses. That's why they recently sold their server business to Lenovo.
----------------------------------------Cloud computing is destined to become a commodity business. Amazon excels at such businesses. It's not IBM's strong point. They have/will be investing $1B in Watson which has no real competition at the moment. Hundreds of businesses have signed up to partner with them on creating the Watson ecosystem and the uses Watson will be put to will completely revolutionize computing as we know it. So in the short run IBM may not be as profitable as they like, but I think their long term outlook is favorable.   |
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jonnieb-uk
Ace Cruncher England Joined: Nov 30, 2011 Post Count: 6105 Status: Offline Project Badges: 
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I'm with Sgt.Joe on this and as for "I hope that WCG was not a distraction for IBM" we delude ourselves if we think WCG is any more than a very minor sideshow for IBM. A team of less than a dozen people out of a total headcount of 431,212 and a resource allocation to match!
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