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Wednesday, September 15, 2010

Who Can you Trust?

I was just read a Wall Street Journal article by Spenser Ante titled "IBM's Chief Thumps H-P" describing how Sam Palmisano recently criticized HP and Mark Hurd. In this WSJ interview, Sam had the unmitigated gall to criticize HP for cutting its investment in development and growing through acquisition.

Well, Sam, when was the last time IBM introduced a new product into the market that they developed in house?  Seems to me that IBM is the number one company in terms of gobbling up anything that looks like a good target for acquisition.  IBM under Sam's leadership of course fumbles, hesitates, and loses the big valuable acquisitions like losing Sun to Oracle and shooting itself in the foot.

IBM software group hasn't developed anything unique or earth shattering in years.  IBM is quick to buy up companies who reach market saturation and hope that their software maintenance revenue will pay the acquisition cost.

IBM sold off the PC division primarily because they could not figure out how to make it profitable.  Lenvo in China doesn't seem to have a problem with that. Could it have been a management problem?  How about selling the Printer division to Hitachi because Sam couldn't make any money with it?  The Japanese could! 

Even in Services, Sam could not grow his own company profitably but had to grow via acquisition. 

IMHO IBM under Sam's and Lou Gerstner's leadership has declined from market leader to market follower and a company dedicated to preserving existing markets at all costs.

In the hardware arena, it has the Power Systems group which was the leader in Unix based machines (a declining market).  With Oracle's acquisition of Sun Microsystems, IBM will lose a huge market share of its Power Systems market to Oracle who will bundle its ERP, HR, and CRM software on Sun machines that used to be IBM machines.  Oracle was IBM's biggest business partner and is now its biggest competitor.  Mark Hurd will most definitely have the last laugh.

While Sam continues to invest in R&D he has his head in a cloud and IBM Research hasn't produced a viable money making product in years! 

Under Sam's and his predecessor, Lou Gerstner's leadership they have successfully turned a customer centric business solutions focused company into just another manufacturing company with services.  IBM no longer provides solutions, it just sells products. Hmmm?  Sounds like Nabisco... 

I'm also curious about why the media hasn't picked up on the outsourcing of over 85,000 jobs to China and India from the US alone, not to mention jobs lost in Canada and Europe. 

While Sam in his WSJ interview tells WSJ that he has no plans to retire, I sure hope for IBM's sake that his board of directors has other plans!  This man is a total and complete disaster!  Oh yeah, he does deliver short term golden ages each quarter, but he is most definitely killing the golden goose.

I often wondered if Sam P was a real person or just an avatar put out in public while some computer in Armonk actually ran the company.  I know that when I went to work for IBM, I interacted with a personal computer.  I was paid by computer, I got all my reviews by computer, in fact virtually every aspect of my job involved interacting with IBM management computer systems.

Is Sam real? 

Other than being an interesting story, the real issue is who can a business executive trust when it comes to IT products and strategy today?  I think it is perfectly clear that you can no longer trust your vendors.

There was a time not that long ago where your IBM account team (sales executive, systems engineers, and a raft of specialists for your industry) could hep you chart a path through technology and technical mumbo jumbo. 

NO LONGER!  Today, IBM Customers:  BUYER BEWARE!

Today IBM customers are on their own!  IBM will sell you anything you want to buy and can pay for. Your sales reps  are only concerned about making their numbers for the quarter and keeping their jobs for one more quarter.

They will sell you anything they can whether you need it or not. 

I would suggest that IBM is in a very precarious position today.  With Oracle's acquisition of Sun, IBM will lose a huge percentage of its Unix market share (Power Systems).  Companies are looking at the cost of the zSeries and many are moving to Intel Windows or Unix/Linux based systems and using products like MicroFocus COBOL to move legacy mainframe applications to less expensive platforms.

Companies today need to become platform neutral and vendor agnostic when it comes to computer technology.  You cannot and should not depend on any vendor today.

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