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Sunday, March 9, 2014

Big Changes in Computing

I've been following IBM's Q4 results along with its 2013 year end results and statements being made by Virginia Rometty, President and CEO about IBM's future.  It is clear that Cloud and Big Data are IBM's strategic direction.

In Rometty's letter to shareholders she was pretty clear about big changes in IBM's Power Systems division in light of its dismal 2013 performance.  She indicates a clear focus on Linux and participation in Cloud and Big Data.

See: Letter to Shareholders, 2013 Annual Report

It seems that Ms Rometty may have spoken to soon and too harshly in her letter above as a news release came out on Saturday, March 8, 2014 The Street published a letter from Rometty stating "We are not getting out of the hardware business"

We are we? Or are we not Mr Rometty?

This whole debacle is the result of IBM hardware sales being down by over 18% year to year and actually generating a substantial operating loss.  There is followed reports of over a 25% world wide reduction in staff for IBM STG (Systems & Technology Group -- responsible for computer hardware)  in all areas from sales to manufacturing and support.

So what does all this mean?

It means that Cloud computing is where IBM see's the future.  Instead of owning computers as in the past with all the technology challenges, security challenges, and risk, organizations like IBM, Google Amazon, and others will become utilities selling computer resources as a service and providing a vastly superior service than owning your own systems.

Just something to think about.

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